S-4

As filed with the Securities and Exchange Commission on June 4, 2004

File No. 333-            

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form S-4

REGISTRATION STATEMENT

UNDER THE SECURITIES ACT OF 1933

CNF Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware
(State or Other Jurisdiction of
Incorporation or Organization) 4213
(Primary Standard Industrial
Classification Code Number) 94-1444798
(I.R.S. Employer
Identification No.)

3240 Hillview Avenue

Palo Alto, California 94304

Telephone Number (415) 494-2900

(Address, including zip code, and telephone number,

including area code, of registrant’s principal executive offices)

Eberhard G. H. Schmoller

Senior Vice President and General Counsel

3240 Hillview Avenue

Palo Alto, California 94304

Telephone Number (415) 494-2900

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Gregg A. Noel, Esq.

Skadden, Arps, Slate, Meagher & Flom LLP

300 South Grand Avenue

Los Angeles, California 90071

(213) 687-5000

      Approximate date of commencement of proposed sale of the securities to the public: As soon as practicable after this registration statement becomes effective.

      If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.     o

      If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

      If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price	Aggregate Offering	Amount of
Securities to be Registered	Registered	Per Unit	Price(1)	Registration Fee
6.70% Senior Debentures due 2034	$300,000,000	100%	$300,000,000	$38,010

(1)  Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) promulgated under the Securities Act of 1933, as amended.

      The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to the said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JUNE 4, 2004.

PROSPECTUS

CNF Inc.

                Offer to exchange all outstanding 6.70% Series A Senior Debentures due 2034 for 6.70% Series B Senior Debentures due 2034 which have been registered under the Securities Act of 1933, as amended.

      The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2004, the 21st business day following the date of this prospectus, unless we extend the exchange offer in our sole and absolute discretion.

      The principal terms of the exchange offer are as follows:

•  We will exchange the new debentures for all outstanding old debentures that are validly tendered and not withdrawn pursuant to the exchange offer.

•  You may withdraw tenders of old debentures at any time prior to the expiration of the exchange offer.

•  The terms of the new debentures are substantially identical to those of the outstanding old debentures, except that the transfer restrictions and registration rights relating to the old debenture will not apply to the new debentures.

•  The exchange of old debentures for new debentures will not be a taxable transaction for U.S. federal income tax purposes, but you should see the discussion under the heading “Material United States Federal Income Tax Considerations” for more information.

•  We will not receive any cash proceeds from the exchange offer.

•  We issued the old debentures in a transaction not requiring registration under the Securities Act, and as a result, transfer of the old debentures is restricted. We are making the exchange offer to satisfy your registration rights, as a holder of the old debentures.

      There is no established trading market for the new debentures or the old debentures.

      Each broker-dealer that receives new debentures for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these new debentures. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new debentures received in exchange for old debentures where the old debentures were acquired as a result of market-making activities or other trading activities. We have agreed, that for a period of 120 days after the consummation of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale.

      None of the Securities and Exchange Commission or any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

The date of this prospectus is                     , 2004.

TABLE OF CONTENTS

Forward-Looking Statements	i
Summary	1
The Exchange Offer	8
Use of Proceeds	15
Ratio of Earnings to Fixed Charges	15
Selected Consolidated Financial Data	16
Description of New Debentures	19
Material United States Federal Income Tax Considerations	32
Plan of Distribution	33
Legal Matters	34
Experts	34
Available Information and Incorporation By Reference	35
EXHIBIT 1.1
EXHIBIT 4.2
EXHIBIT 4.4
EXHIBIT 5
EXHIBIT 12.A
EXHIBIT 12.B
EXHIBIT 23.1
EXHIBIT 25
EXHIBIT 99.4
EXHIBIT 99.5
EXHIBIT 99.6
EXHIBIT 99.7

      As used in this prospectus, the terms “CNF,” “the company,” “we,” “our” and “us” refer to CNF Inc. and its subsidiaries as a combined entity, except in the “Description of New Debentures” and in other places where it is clear that the terms mean only CNF Inc.

      This prospectus incorporates by reference important business and financial information about us that is not included in or delivered with this document. Copies of this information are available without charge to any person to whom this prospectus is delivered, upon written or oral request. Written requests should be sent to:

CNF Inc.

3240 Hillview Avenue

Palo Alto, California 94304

Attention: Investor Relations

      Oral requests should be made by telephoning (415) 494-2900.

      In order to obtain timely delivery, you must request the information no later than                     , 2004, which is five business days before the expiration date of the exchange offer.

      The “old debentures” consisting of the 6.70% Series A Senior Debentures due 2034 which were issued on April 30, 2004 and the “new debentures” consisting of the 6.70% Series B Senior Debentures due 2034 offered pursuant to this prospectus are sometimes collectively referred to in this prospectus as the “debentures.”

      You should rely only on the information contained in this prospectus. The company has not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The company is not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.

FORWARD-LOOKING STATEMENTS

      Statements included or incorporated by reference in this prospectus may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and are subject to a number of risks and uncertainties, and should not be relied upon as predictions of future events. All statements, other than statements of historical fact, are forward-looking statements, including any projections of earnings, revenues, weight, yield, volumes, income or other financial or operating items, any statements of the plans, strategies, expectations or objectives of CNF or its management for future operations or other future items, any statements concerning proposed new

i

products or services, any statements regarding CNF’s estimated future contributions to pension plans, any statements as to the adequacy of reserves, any statements regarding the outcome of any claims that may be brought against CNF by Consolidated Freightways Corporation’s multi-employer pension plans, any statements regarding future economic conditions or performance, any statements regarding the outcome of legal and other claims and proceedings against CNF, any statements of estimates or belief and any statements or assumptions underlying the foregoing.

      Certain such forward-looking statements can be identified by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates” or “anticipates” or the negative of those terms or other variations of those terms or comparable terminology or by discussions of strategy, plans or intentions. Such forward-looking statements are necessarily dependent on assumptions, data and methods that may be incorrect or imprecise and there can be no assurance that they will be realized. In that regard, the following factors, among others, the matters discussed elsewhere in this prospectus, and the matters discussed in the documents incorporated by reference, could cause actual results and other matters to differ materially from those discussed in such forward-looking statements:

•  changes in general business and economic conditions, including the global economy;

•  the creditworthiness of CNF’s customers and their ability to pay for services rendered;

•  increasing competition and pricing pressure;

•  changes in fuel prices;

•  the effects of the cessation of Emery Worldwide Airlines, Inc.’s air carrier operations; the possibility of additional unusual charges and other costs and expenses relating to Menlo Worldwide Forwarding’s operations;

•  the possibility that CNF may, from time to time, be required to record impairment charges for goodwill and other long-lived assets;

•  the possibility of defaults under CNF’s $385 million credit agreement and other debt instruments, including defaults resulting from additional unusual charges or from any costs or expenses that CNF may incur, and the possibility that CNF may be required to repay certain indebtedness in the event that the ratings assigned to its long-term senior debt by credit rating agencies are reduced;

•  labor matters, including the grievance by furloughed pilots and crew members, renegotiations of labor contracts, labor organizing activities, work stoppages or strikes; enforcement of and changes in governmental regulations, including the effects of new regulations issued by the Department of Homeland Security;

•  environmental and tax matters;

•  the February 2000 crash of an Emery Worldwide Airlines, Inc. aircraft and related litigation; and

•  matters relating to CNF’s 1996 spin-off of Consolidated Freightways Corporation, including the possibility that Consolidated Freightways Corporation’s multi-employer pension plans may assert claims against CNF, and that CNF may not prevail in those proceedings and may not have the financial resources necessary to satisfy amounts payable to those plans, and matters relating to CNF’s defined benefit pension plans.

      As a result of the foregoing, no assurance can be given as to our future financial condition, cash flows, or results of operations.

ii

SUMMARY

      The following summary highlights selected information contained or incorporated by reference in this prospectus and does not contain all of the information that may be important to you. You should carefully read this entire prospectus and the documents incorporated and deemed to be incorporated by reference in this prospectus, including the financial statements and related notes, before making a decision to invest in the new debentures.

CNF Inc.

      We are a management company with annual revenues of approximately $5.1 billion, for the year ended December 31, 2003, that provides supply chain management services for business-to-business shipments by land, air and sea throughout the world. We conduct our operations through the following five business segments:

•  Con-Way Transportation Services provides next-day, second-day and transcontinental freight trucking throughout the U.S., Canada, Puerto Rico, and Mexico, as well as expedited transportation, air freight forwarding, contract logistics and warehousing and truckload brokerage services.

•  Menlo Worldwide Forwarding provides time-definite domestic and international air freight and ocean forwarding services, customs brokerage, and other trade services.

•  Menlo Worldwide Logistics develops integrated contract logistics solutions, including the management of complex distribution networks and supply chain engineering and consulting.

•  Menlo Worldwide Other serves as the lead logistics manager for General Motors through a joint venture with GM, Vector SCM.

•  Our Other segment includes the operations of Road Systems, a trailer manufacturer, and certain corporate activities.

      We believe that the broad range of services that we offer, coupled with our domestic and international delivery infrastructure, provide us with a competitive advantage over companies with more limited capabilities. Increasingly, the world economy has become more integrated, “just-in-time” strategies have made highly reliable replenishment capabilities essential, and many major companies are outsourcing their distribution networks to specialists. We seek to position our operating units as leaders in their respective segments of the transportation industry by delivering reliable time-definite and day-definite delivery around the world and providing the information systems capabilities our customers need to enhance the efficiency of their entire supply chain, rather than merely reducing their transportation expenses.

      An important element of our strategy involves an effort to reduce the impact on our business of the historical cyclicality of the freight industry. We seek to achieve that result by:

•  operating in United States and international markets,

•  offering a variety of transportation modes, such as airfreight, trucking and ocean, and

•  participating in both asset-based businesses such as trucking and domestic airfreight and non-asset based businesses such as contract logistics, international freight forwarding and customs brokerage.

      Our principal executive offices are located at 3240 Hillview Avenue, Palo Alto, California 94304 and our telephone number is (650) 494-2900. Our website address is www.cnf.com.

1

The Exchange Offer

Old Debentures	6.70% Series A Senior Debentures due 2034, which we issued April 30, 2004.
New Debentures	6.70% Series B Senior Debentures due 2034, the issuance of which has been registered under the Securities Act. The form and the terms of the new debentures are identical in all material respects to those of the old debentures, except that the transfer restrictions and registration rights relating to the old debentures do not apply to the new debentures.
Exchange Offer	We are offering to issue up to $300.0 million aggregate principal amount of the new debentures in exchange for a like principal amount of the old debentures to satisfy our obligations under the registration rights agreement that we entered into when the old debentures were issued in transactions that were exempt from the registration requirements of the Securities Act.
Expiration Date; Tenders	The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2004, the 21st business day following the date of this prospectus, unless extended in our sole and absolute discretion. By tendering your old debentures, you represent to us that:
	• you are not our affiliate, as defined in Rule 405 under the Securities Act;
	• any new debentures you receive in the exchange offer are being acquired by you in the ordinary course of your business;
	• at the time of the commencement of the exchange offer, neither you nor, to your knowledge, anyone receiving new debentures from you, has any arrangement or understanding with any person to participate in the distribution, as defined in the Securities Act, of the new debentures in violation of the Securities Act;
	• if you are a broker-dealer, you will receive the new debentures for your own account in exchange for old debentures that were acquired by you as a result of your market making or other trading activities and that you will deliver a prospectus in connection with any resale of the new debentures you receive. For further information regarding resales of the new debentures by participating broker- dealers, see the discussion under the caption “Plan of Distribution”; and
	• if you are not a broker-dealer, you are not engaged in, and do not intend to engage in, the distribution of the new debentures, as defined in the Securities Act.
Withdrawal; Non-Acceptance	You may withdraw any old debentures tendered in the exchange offer at any time prior to 5:00 p.m., New York City time, on                     , 2004. To be effective, a written notice of withdrawal

2

	must be received by the exchange agent at one of the addresses set forth on page 13. The notice must specify:
	• the name of the person having tendered the old debentures to be withdrawn,
	• the old debentures to be withdrawn, including the principal amount of such old debentures, and
	• where certificates for old debentures have been transmitted, the name in which such old debentures are registered, if different from that of the withdrawing holder.
	If we decide for any reason not to accept any old debentures tendered for exchange, the old debentures will be returned to the registered holder at our expense promptly after the expiration or termination of the exchange offer. In the case of the old debentures tendered by book-entry transfer into the exchange agent’s account at The Depository Trust Company, which we sometimes refer to in this prospectus as DTC, any withdrawn or unaccepted old debentures will be credited to the tendering holders’ account at DTC. For further information regarding the withdrawal of the tendered old debentures, see “The Exchange Offer — Withdrawal Rights.”
Conditions to the Exchange Offer	The exchange offer is subject to customary conditions, which we may waive. See the discussion below under the caption “The Exchange Offer — Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer.
Procedures for Tendering Old Debentures	Unless you comply with the procedure described below under the caption “The Exchange Offer — Guaranteed Delivery Procedures,” you must do one of the following on or prior to the expiration or termination of the exchange offer to participate in the exchange offer:
	• tender your old debentures by sending the certificates for your old debentures, in proper form for transfer, a properly completed and duly executed letter of transmittal, with any required signature guarantees, and all other documents required by the letter of transmittal, to The Bank of New York, as exchange agent, at one of the addresses listed below under the caption “The Exchange Offer — Exchange Agent”; or
	• tender your old debentures by using the book-entry transfer procedures described below and transmitting a properly completed and duly executed letter of transmittal, with any required signature guarantees, or an agent’s message instead of the letter of transmittal, to the exchange agent. In order for a book-entry transfer to constitute a valid tender of your old debentures in the exchange offer, The Bank of New York, as exchange agent, must receive a confirmation of book-entry transfer of your old debentures into the exchange agent’s account at DTC prior to the expiration or termination of the

3

	exchange offer. For more information regarding the use of book-entry transfer procedures, including a description of the required agent’s message, see the discussion below under the caption “The Exchange Offer — Book-Entry Transfers.”
Guaranteed Delivery Procedures	If you are a registered holder of old debentures and wish to tender your old debentures in the exchange offer, but
	• the old debentures are not immediately available;
	• time will not permit your old debentures or other required documents to reach the exchange agent before the expiration or termination of the exchange offer; or
	• the procedure for book-entry transfer cannot be completed prior to the expiration or termination of the exchange offer;
	then you may tender old debentures by following the procedures described below under the caption “The Exchange Offer — Guaranteed Delivery Procedures.”
Special Procedures for Beneficial Owners	If you are a beneficial owner whose old debentures are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your old debentures in the exchange offer, you should promptly contact the person in whose name the old debentures are registered and instruct that person to tender them on your behalf. If you wish to tender in the exchange offer on your own behalf, prior to completing and executing the letter of transmittal and delivering your old debentures, you must either make appropriate arrangements to register ownership of the old debentures in your name, or obtain a properly completed bond power from the person in whose name the old debentures are registered.
Material United States Federal Income Tax Considerations	The exchange of the old debentures for new debentures in the exchange offer will not be a taxable transaction for United States federal income tax purposes. See the discussion below under the caption “Material United States Federal Income Tax Considerations,” for more information regarding the United States federal income tax consequences to you of the exchange offer.
Use of Proceeds	We will not receive any cash proceeds from the exchange offer.
Exchange Agent	The Bank of New York is the exchange agent for the exchange offer. You can find the address and telephone number of the exchange agent below under the caption, “The Exchange Offer — Exchange Agent.”
Resales	Based on interpretations by the staff of the SEC, as set forth in no-action letters issued to third parties, we believe that the new debentures you receive in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the

4

	Securities Act. However, you will not be able to freely transfer the new debentures if:
	• you are our “affiliate,” as defined in Rule 405 of the Securities Act;
	• you are not acquiring the new debentures in the exchange offer in the ordinary course of business;
	• you have an arrangement or understanding with any person to participate in the distribution, as defined in the Securities Act, of the new debentures, you will receive in the exchange offer;
	• you are holding old debentures that have or are reasonably likely to have the status of an unsold allotment in the initial offering; or
	• you are a broker-dealer that received new debentures for its own account in the exchange offer in exchange for old debentures that were acquired as a result of market-making or other trading activities.
	If you fall within one of the exceptions listed above, you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction involving the new debentures. See the discussion below under the caption “The Exchange Offer — Procedures for Tendering Old Debentures” for more information.
Broker-Dealers	Each broker-dealer that receives new debentures for its own account pursuant to the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of such new debentures. The letter of transmittal states that by so acknowledging and delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new debentures received in exchange for old debentures which were received by the broker-dealer as a result of market making or other trading activities. We have agreed that for a period of up to 120 days after the consummation of this exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” for more information.
Registration Rights Agreement	When we issued the old debentures in April 2004, we entered into a registration rights agreement with the initial purchasers of the old debentures. Under the terms of the registration rights agreement, we agreed to:
	• use our reasonable best efforts to have the exchange offer registration statement declared effective on or prior to 180 days after the closing date of the offering; and
	• use our reasonable best efforts to consummate the exchange offer within 30 business days after the date on

5

which the exchange offer registration statement is declared effective.

If we fail to meet our registration obligations, we will pay additional interest equal to 0.25% per annum to each holder of old debentures.

Under some circumstances set forth in the registration rights agreement, holders of old debentures, including holders who are not permitted to participate in the exchange offer or who may not freely sell new debentures received in the exchange offer, may require us to file and cause to become effective, a shelf registration statement covering resales of the old debentures by these holders.

A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part. See “Description of New Debentures — Registration Rights Agreement; Additional Interest.”

Consequences of Not Exchanging Your Old Debentures

      If you do not exchange your old debentures in the exchange offer, you will continue to be subject to the restrictions on transfer described in the legend on the certificate for your old debentures. In general, you may offer or sell your old debentures only:

•  if they are registered under the Securities Act and applicable state securities laws;

•  if they are offered or sold under an exemption from registration under the Securities Act and applicable state securities laws; or

•  if they are offered or sold in a transaction not subject to the Securities Act and applicable state securities laws.

      We do not intend to register the old debentures under the Securities Act. Under some circumstances set forth in the registration rights agreement, however, holders of the old debentures, including holders who are not permitted to participate in the exchange offer or who may not freely sell new debentures received in the exchange offer, may require us to file, and to cause to become effective, a shelf registration statement covering resales of the old debentures by these holders. For more information regarding the consequences of not tendering your old debentures and our obligations to file a shelf registration statement, see “The Exchange Offer — Consequences of Exchanging or Failing to Exchange Old Debentures” and “Description of New Debentures — Registration Rights Agreement; Additional Interest.”

6

Summary Description of the New Debentures

      The terms of the new debentures and those of the outstanding old debentures are substantially identical except that the transfer restrictions and registration rights relating to the old debentures do not apply to the new debentures. The summary below describes the principal terms of the new debentures. For a more complete description of the terms of the new debentures, see “Description of New Debentures” in this prospectus.

Issuer	CNF Inc.
Securities Offered	$300,000,000 aggregate principal amount of 6.70% Senior Debentures due 2034.
Maturity	May 1, 2034.
Interest	The new debentures will bear interest at the rate of 6.70% per year from and including the issue date, payable semi-annually, in arrears, on May 1 and November 1 of each year, commencing on November 1, 2004.
Optional Redemption	We may redeem the new debentures, in whole at any time or in part from time to time, at our option on not less than 30 nor more than 60 days’ notice, at a redemption price equal to the greater of:
	• the principal amount being redeemed or
	• the sum of the present values of the remaining scheduled payments of principal and interest on the debentures being redeemed, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below under “Description of New Debentures — Optional Redemption”) plus 35 basis points
	plus in either case, accrued and unpaid interest on the new debentures to the redemption date.
Ranking	The new debentures are our unsecured senior obligations and will rank equally with all of our existing and future unsecured and unsubordinated indebtedness.
Certain Covenants	The new debentures will be issued under an indenture containing covenants for your benefit. These covenants restrict our ability, with certain exceptions, to incur debt secured by liens. See “Description of New Debentures.”

7

THE EXCHANGE OFFER

Terms of the Exchange Offer; Period for Tendering Old Debentures

      Subject to terms and conditions detailed in this prospectus, we will accept for exchange old debentures that are properly tendered on or prior to the expiration date and not withdrawn as permitted below. The term “expiration date” means 5:00 p.m., New York City time,                     , 2004, the 21st business day following the date of this prospectus. We may, however, in our sole discretion, extend the period of time that the exchange offer is open. The term “expiration date” means the latest time and date to which the exchange offer is extended.

      As of the date of this prospectus, $300,000,000 principal amount of old debentures are outstanding. We are sending this prospectus, together with the letter of transmittal, to all holders of old debentures that we are aware of on the date hereof.

      We expressly reserve the right, at any time, to extend the period of time that the exchange offer is open, and delay acceptance for exchange of any old debentures, by giving oral or written notice of an extension to the holders of the old debentures as described below. During any extension, all old debentures previously tendered will remain subject to the exchange offer and may be accepted for exchange by us. Any old debentures not accepted for exchange for any reason will be returned without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

      Old debentures tendered in the exchange offer must be in denominations of principal amount of $1,000 and any integral multiple thereof.

      We expressly reserve the right to amend or terminate the exchange offer, and not to exchange any old debentures, upon the occurrence of any of the conditions of the exchange offer specified under “— Conditions to the Exchange Offer.” We will give oral or written notice of any extension, amendment, non-acceptance or termination to the holders of the old debentures as promptly as practicable. In the case of any extension, we will issue a notice by means of a press release or other public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date.

Procedures for Tendering Old Debentures

      Your tender to us of old debentures as set forth below and our acceptance of the old debentures will constitute a binding agreement between us and you upon the terms and subject to the conditions detailed in this prospectus and in the accompanying letter of transmittal. Except as set forth below, to tender old debentures for exchange in the exchange offer, you must transmit a properly completed and duly executed letter of transmittal, including all other documents required by the letter of transmittal or, in the case of a book-entry transfer, an agent’s message in place of the letter of transmittal, to The Bank of New York, as exchange agent, at the address set forth below under “— Exchange Agent” on or prior to the expiration date. In addition, either:

•  certificates for old debentures must be received by the exchange agent along with the letter of transmittal, or

•  a timely confirmation of a book-entry transfer, which we refer to in this prospectus as a book-entry confirmation, of old debentures, if this procedure is available, into the exchange agent’s account at DTC pursuant to the procedure for book-entry transfer described beginning on page 10 must be received by the exchange agent prior to the expiration date, with the letter of transmittal or an agent’s message in place of the letter of transmittal, or

•  the holder must comply with the guaranteed delivery procedures described below.

      The term “agent’s message” means a message, transmitted by DTC to and received by the exchange agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant stating that such participant has received and agrees to be

8

bound by the letter of transmittal and that we may enforce such letter of transmittal against such participant.

      The method of delivery of old debentures, letters of transmittal and all other required documents is at your election and risk. If such delivery is by mail, it is recommended that you use registered mail, properly insured, with return receipt requested. In all cases, you should allow sufficient time to assure timely delivery. No letter of transmittal or old debentures should be sent to us.

      Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed unless the old debentures surrendered for exchange are tendered:

•  by a holder of the old debentures who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal, or

•  for the account of an eligible institution (as defined below).

      In the event that signatures on a letter of transmittal or a notice of withdrawal are required to be guaranteed, such guarantees must be by a firm which is a member of the Securities Transfer Agent Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange Medallion Program (we refer to each such entity as an eligible institution in this prospectus). If old debentures are registered in the name of a person other than the signer of the letter of transmittal, the old debentures surrendered for exchange must be endorsed by, or be accompanied by a written instrument or instruments of transfer or exchange, in satisfactory form as we or the exchange agent determine in our sole discretion, duly executed by the registered holders with the signature thereon guaranteed by an eligible institution.

      We in our sole discretion will make a final and binding determination on all questions as to the validity, form, eligibility, including time of receipt, and acceptance of old debentures tendered for exchange. We reserve the absolute right to reject any and all tenders of any particular old debenture not properly tendered or to not accept any particular old debenture which acceptance might, in our judgment or our counsel’s, be unlawful. We also reserve the absolute right to waive any defects or irregularities or conditions of the exchange offer as to any particular old debenture either before or after the expiration date, including the right to waive the ineligibility of any holder who seeks to tender old debentures in the exchange offer. Our interpretation of the terms and conditions of the exchange offer as to any particular old debenture either before or after the expiration date, including the letter of transmittal and the instructions thereto, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old debentures for exchange must be cured within a reasonable period of time, as we determine. We are not, nor is the exchange agent or any other person, under any duty to notify you of any defect or irregularity with respect to your tender of old debentures for exchange, and no one will be liable for failing to provide such notification.

      If the letter of transmittal is signed by a person or persons other than the registered holder or holders of old debentures, such old debentures must be endorsed or accompanied by powers of attorney signed exactly as the name(s) of the registered holder(s) that appear on the old debentures.

      If the letter of transmittal or any old debentures or powers of attorneys are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing. Unless waived by us or the exchange agent, proper evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal.

      By tendering old debentures, you represent to us that, among other things:

•  the new debentures acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the person receiving such new debentures, whether or not such person is the holder; and

•  neither the holder nor such other person has any arrangement or understanding with any person, to participate in the distribution of the new debentures.

9

      In the case of a holder that is not a broker-dealer, that holder, by tendering, will also represent to us that the holder is not engaged in or does not intend to engage in a distribution of the new debentures.

      If you are our “affiliate,” as defined under Rule 405 under the Securities Act, or engage in or intend to engage in or have an arrangement or understanding with any person to participate in a distribution of such new debentures to be acquired pursuant to the exchange offer, you or any such other person:

•  could not rely on the applicable interpretations of the staff of the SEC; and

•  must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

      Each broker-dealer that receives new debentures for its own account in exchange for old debentures, where the old debentures were acquired by the broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such new debentures. See “Plan of Distribution.” The letter of transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

Acceptance of Old Debentures for Exchange; Delivery of New Debentures

      Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the expiration date, all old debentures properly tendered and will issue the new debentures promptly after acceptance of the old debentures. See “— Conditions to the Exchange Offer.” For purposes of the exchange offer, we will be deemed to have accepted properly tendered old debentures for exchange if and when we give oral, confirmed in writing, or written notice to the exchange agent.

      The holder of each old debenture accepted for exchange will receive a new debenture in the amount equal to the surrendered old debenture. Accordingly, registered holders of new debentures on the record date for the first interest payment date following the consummation of the exchange offer will received interest accruing from the most recent date that interest has been paid on the old debentures. Holders of new debentures will not receive any payment in respect of accrued interest on old debentures otherwise payable on any interest payment date, the record date for which occurs on or after the consummation of the exchange offer.

      In all cases, issuance of new debentures for old debentures that are accepted for exchange will only be made after timely receipt by the exchange agent of:

•  certificates for such old debentures or a timely book-entry confirmation of such old debentures into the exchange agent’s account at DTC,

•  a properly completed and duly executed letter of transmittal or an agent’s message in lieu thereof, and

•  all other required documents.

      If any tendered old debentures are not accepted for any reason set forth in the terms and conditions of the exchange offer or if old debentures are submitted for a greater principal amount than the holder desires to exchange, the unaccepted or non-exchanged old debentures will be returned without expense to the tendering holder or, in the case of old debentures tendered by book-entry transfer into the exchange agent’s account at DTC pursuant to the book-entry procedures described below, the non-exchanged old debentures will be credited to an account maintained with DTC, as promptly as practicable after the expiration or termination of the exchange offer.

Book-Entry Transfers

      For purposes of the exchange offer, the exchange agent will request that an account be established with respect to the old debentures at DTC within two business days after the date of this prospectus, unless the exchange agent already has established an account with DTC suitable for the exchange offer.

10

Any financial institution that is a participant in DTC may make book-entry delivery of old debentures by causing DTC to transfer such old debentures into the exchange agent’s account at DTC in accordance with DTC’s procedures for transfer. Although delivery of old debentures may be effected through book-entry transfer at DTC, the letter of transmittal or facsimile thereof or an agent’s message in lieu thereof, with any required signature guarantees and any other required documents, must, in any case, be transmitted to and received by the exchange agent at the address set forth under “— Exchange Agent” on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with.

Guaranteed Delivery Procedures

      If you desire to tender your old debentures and your old debentures are not immediately available, or time will not permit your old debentures or other required documents to reach the exchange agent before the expiration date, a tender may be effected if:

•  the tender is made through an eligible institution,

•  prior to the expiration date, the exchange agent received from such eligible institution a notice of guaranteed delivery, substantially in the form we provide, by facsimile transmission, mail or hand delivery, setting forth your name and address, the amount of old debentures tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old debentures, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed appropriate letter of transmittal or facsimile thereof or agent’s message in lieu thereof, with any required signature guarantees and any other documents required by the letter of transmittal will be deposited by such eligible institution with the exchange agent, and

•  the certificates for all physically tendered old debentures, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed appropriate letter of transmittal or facsimile thereof or agent’s message in lieu thereof, with any required signature guarantees and all other documents required by the letter of transmittal, are received by the exchange agent within three New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery.

Withdrawal Rights

      You may withdraw your tender of old debentures at any time prior to the expiration date. To be effective, a written notice of withdrawal must be received by the exchange agent at one of the addresses set forth under “— Exchange Agent.” This notice must specify:

•  the name of the person having tendered the old debentures to be withdrawn,

•  the old debentures to be withdrawn, including the principal amount of such old debentures, and

•  where certificates for old debentures have been transmitted, the name in which such old debentures are registered, if different from that of the withdrawing holder.

      If certificates for old debentures have been delivered or otherwise identified to the exchange agent, then, prior to the release of the certificates, the withdrawing holder must also submit the serial numbers of the particular certificates to be withdrawn and a signed notice of withdrawal with signatures guaranteed by an eligible institution, unless such holder is an eligible institution. If old debentures have been tendered pursuant to the procedure for book-entry transfer described above, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn old debentures and otherwise comply with the procedures of DTC.

      We will make a final and binding determination on all questions as to the validity, form and eligibility, including time of receipt, of such notices. Any old debentures so withdrawn will be deemed not

11

to have been validly tendered for exchange for purposes of the exchange offer. Any old debentures tendered for exchange but not exchanged for any reason will be returned to the holder without cost to the holder, or, in the case of old debentures tendered by book-entry transfer into the exchange agent’s account at DTC pursuant to the book-entry transfer procedures described above, the old debentures will be credited to an account maintained with DTC for the old debentures as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn old debentures may be re-tendered by following one of the procedures described under “— Procedures for Tendering Old Debentures” above at any time on or prior to the expiration date.

Conditions to the Exchange Offer

      Notwithstanding any other provision of the exchange offer, we are not required to accept for exchange, or to issue new debentures in exchange for, any old debentures and may terminate or amend the exchange offer, if any of the following events occur prior to acceptance of such old debentures:

      (a) the exchange offer violates any applicable law or applicable interpretation of the staff of the SEC; or

      (b) there is threatened, instituted or pending any action or proceeding before, or any injunction, order or decree has been issued by, any court or governmental agency or other governmental regulatory or administrative agency or commission,

      (1) seeking to restrain or prohibit the making or consummation of the exchange offer or any other transaction contemplated by the exchange offer, or assessing or seeking any damages as a result thereof, or

      (2) resulting in a material delay in our ability to accept for exchange or exchange some or all of the old debentures pursuant to the exchange offer;

or any statute, rule, regulation, order or injunction has been sought, proposed, introduced, enacted, promulgated or deemed applicable to the exchange offer or any of the transactions contemplated by the exchange offer by any government or governmental authority, domestic or foreign, or any action has been taken, proposed or threatened, by any government, governmental authority, agency or court, domestic or foreign, that in our sole judgment might, directly or indirectly, result in any of the consequences referred to in clauses (1) or (2) above or, in our reasonable judgment, might result in the holders of new debentures having obligations with respect to resales and transfers of new debentures which are greater than those described in the interpretation of the SEC referred to above, or would otherwise make it inadvisable to proceed with the exchange offer; or

      (c) there has occurred:

      (1) any general suspension of or general limitation on prices for, or trading in, securities on any national securities exchange or in the over-the-counter market,

      (2) any limitation by a governmental agency or authority which may adversely affect our ability to complete the transactions contemplated by the exchange offer,

      (3) a declaration of a banking moratorium or any suspension of payments in respect of banks in the United States or any limitation by any governmental agency or authority which adversely affects the extension of credit, or

      (4) a commencement of a war, armed hostilities or other similar international calamity directly or indirectly involving the United States, or, in the case of any of the foregoing existing at the time of the commencement of the exchange offer, a material acceleration or worsening thereof; or

      (d) any change (or any development involving a prospective change) has occurred or is threatened in our business, properties, assets, liabilities, financial condition, operations, results of

12

operations or prospects and our subsidiaries taken as a whole that, in our reasonable judgment, is or may be adverse to us, or we have become aware of facts that, in our reasonable judgment, have or may have adverse significance with respect to the value of the old debentures or the new debentures;

which in our reasonable judgment in any case, and regardless of the circumstances (including any action by us) giving rise to any such condition, makes it inadvisable to proceed with the exchange offer and/or with such acceptance for exchange or with such exchange.

      The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any condition or may be waived by us in whole or in part at any time in our reasonable discretion. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right and each such right will be deemed an ongoing right which may be asserted at any time.

      In addition, we will not accept for exchange any old debentures tendered, and we will not issue new debentures in exchange for any such old debentures, if at such time any stop order by the SEC is threatened or in effect with respect to the registration statement, of which this prospectus constitutes a part, or the qualification of the indenture under the Trust Indenture Act.

Exchange Agent

      The Bank of New York has been appointed as the exchange agent for the exchange offer. All executed letters of transmittal should be directed to the exchange agent at the address set forth below. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for notices of guaranteed delivery should be directed to the exchange agent addressed as follows:

THE BANK OF NEW YORK

By Facsimile:
(212) 298-1915
Attention:
Reorganization Unit
Confirm by Telephone:
(212) 815- By Registered or Certified Mail:
The Bank of New York
Corporate Trust Operation
Reorganization Unit
101 Barclay Street — 7 East
New York, NY 10286
Attention: By Hand or Overnight Delivery:
The Bank of New York Corporate Trust Operation Reorganization Unit
101 Barclay Street — 7 East
New York, NY 10286
Attention:

      Delivery of the letter of transmittal to an address other than as set forth above or transmission of such letter of transmittal via facsimile other than as set forth above does not constitute a valid delivery of the letter of transmittal.

Fees and Expenses

      We will pay the exchange agent customary fees for its services, reimburse the exchange agent for its reasonable out-of-pocket expenses incurred in connection with the provision of these services and pay other registration expenses, including fees and expenses of the trustee under the indenture relating to the new debentures, filing fees, blue sky fees and printing and distribution expenses. We will not make any payment to brokers, dealers or others soliciting acceptances of the exchange offer.

Accounting Treatment

      We will record the new debentures at the same carrying value as the old debentures, as reflected in our accounting records on the date of the exchange. Accordingly, we will not recognize any gain or loss for accounting purposes. The expenses of the exchange offer will be amortized over the term of the new debentures.

13

Transfer Taxes

      You will not be obligated to pay any transfer taxes in connection with the tender of old debentures in the exchange offer unless you instruct us to register new debentures in the name of, or request that old debentures not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder. In those cases, you will be responsible for the payment of any potentially applicable transfer tax.

Consequences of Exchanging or Failing to Exchange Old Debentures

      If you do not exchange your old debentures for new debentures in the exchange offer, your old debentures will continue to be subject to the provisions of the indenture relating to the debentures regarding transfer and exchange of the old debentures and the restrictions on transfer of the old debentures described in the legend on your certificates. These transfer restrictions are required because the old debentures were issued under an exemption from, or in transactions not subject to, the registration requirements of the Securities Act and applicable state securities laws. In general, the old debentures may not be offered or sold unless registered under the Securities Act, except under an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not plan to register the old debentures under the Securities Act.

      Based on interpretations by the staff of the SEC, as set forth in no-action letters issued to third parties, we believe that the new debentures you receive in the exchange offer may be offered for resale, resold or otherwise transferred without compliance with the registration and prospectus delivery provisions of the Securities Act. However, you will not be able to freely transfer the new debentures if:

•  you are our “affiliate,” as defined in Rule 405 under the Securities Act,

•  you are not acquiring the new debentures in the exchange offer in the ordinary course of your business,

•  you have an arrangement or understanding with any person to participate in the distribution, as defined in the Securities Act, of the new debentures you will receive in the exchange offer,

•  you are holding old debentures that have, or are reasonably likely to have, the status of an unsold allotment in the initial offering, or

•  you are a broker-dealer that received new debentures for its own account in the exchange offer in exchange for old debentures that were acquired as a result of market-making or other trading activities.

      We do not intend to request the SEC to consider this exchange offer. As a result, we cannot guarantee that the staff of the SEC would make a similar determination with respect to the exchange offer as in the circumstances described in the no action letters discussed above. Each holder, other than a broker-dealer, must acknowledge that it is not engaged in, and does not intend to engage in, a distribution of new debentures and has no arrangement or understanding to participate in a distribution of new debentures. If you are our affiliate, are engaged in or intend to engage in a distribution of the new debentures or have any arrangement or understanding with respect to the distribution of the new debentures you will receive in the exchange offer, you may not rely on the applicable interpretations of the staff of the SEC and you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction involving the new debentures. If you are a participating broker-dealer, you must acknowledge that you will deliver a prospectus in connection with any resale of the new debentures. In addition, to comply with state securities laws, you may not offer or sell the new debentures in any state unless they have been registered or qualified for sale in that state or an exemption from registration or qualification is available and is complied with. The offer and sale of the new debentures to “qualified institutional buyers” (as defined in Rule 144A of the Securities Act) is generally exempt from registration or qualification under state securities laws. We do not plan to register or

14

qualify the sale of the new debentures in any state where an exemption from registration or qualification is required and not available.

USE OF PROCEEDS

      We will not receive any cash proceeds from this exchange offer. Any old debentures that are properly tendered and exchanged pursuant to the exchange offer will be retired and cancelled.

RATIO OF EARNINGS TO FIXED CHARGES

      The following table sets forth the ratios of our earnings to fixed charges, on a consolidated basis, for the periods indicated:

	Three Months
	Ended
	March 31,						Year Ended December 31,
	2004			2003			2003			2002			2001			2000			1999
Ratio of earnings to fixed charges(1)		3.1	x		2.2	x		3.1	x		3.1	x		—	(2)		3.9	x		4.7	x

(1)

In calculating the ratio of earnings to fixed charges, earnings consist of income from continuing operations before income taxes and fixed charges (excluding capitalization interest and dividends on all preferred stock) and fixed charges consist of interest expense, capitalized interest, amortization of debt expense, dividends on shares of our Series B Preferred Stock used to pay debt service on notes issued by our Thrift and Stock Plan, and the interest component of rental expense which approximates the interest portion of lease payments.

(2)

For the year ended December 31, 2001, fixed charges exceeded earnings by approximately $698.0 million.

15

SELECTED CONSOLIDATED FINANCIAL DATA

      The following selected consolidated financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the audited consolidated financial statements and related notes, incorporated by reference in this prospectus. The selected consolidated financial data for the years ended December 31, 2003, 2002, 2001, 2000 and 1999 have been derived from our audited consolidated financial statements. The selected consolidated financial data for the three months ended March 31, 2004 and 2003 have been derived from our unaudited consolidated financial statements and are not necessarily indicative of the results to be expected for the full year. The unaudited interim selected consolidated financial data reflects all adjustments (consisting primarily of normal recurring adjustments except as described in the footnotes to the interim consolidated financial statements) which are, in the opinion of management, necessary to present fairly the financial data for the interim periods.

				Three Months Ended
				March 31,						Year Ended December 31,
(Dollars in thousands except per share
data)				2004			2003			2003			2002			2001			2000			1999
SUMMARY RESULTS OF OPERATIONS
	Revenues
		Con-Way Transportation Services		$	593,844		$	519,108		$	2,212,597		$	2,011,477		$	1,912,313		$	2,044,896		$	1,878,216
		Menlo Worldwide
			Forwarding		501,517			445,622			1,881,496			1,778,712			2,044,794			2,608,142			2,408,416
			Logistics		252,790			241,502			1,009,952			969,089			898,182			890,800			716,008
					754,307			687,124			2,891,448			2,747,801			2,942,976			3,498,942			3,124,424
		CNF Other			254			9			287			2,841			7,442			28,539			34,661
	Total Revenues			$	1,348,405		$	1,206,241		$	5,104,332		$	4,762,119		$	4,862,731		$	5,572,377		$	5,037,301
Operating Income (Loss)
		Con-Way Transportation Services		$	51,105		$	37,192		$	195,343		$	147,154	(a)	$	157,467		$	227,312		$	228,820
		Menlo Worldwide
			Forwarding		(6,409	)		(5,431	)		(47,579	)		(11,980	)		(790,345	)		28,365			75,514
			Logistics		6,506			6,036			25,312			31,827			(15,818	)		33,303			22,255
			Other		2,392			2,976			20,718			18,188			(9,415	)		(560	)		—
					2,489			3,581			(1,549	)		38,035			(815,578	)		61,108			97,769
		CNF Other			(852	)		275			(2,357	)		(3,369	)		(2,540	)		1,546			27,649	(c)
Total Operating Income (Loss)				$	52,742		$	41,048		$	191,437		$	181,820		$	(660,651	)	$	289,966		$	354,238
Depreciation and amortization				$	36,488		$	37,434		$	149,380		$	159,080		$	195,397		$	190,651		$	164,876
Interest expense					(9,040	)		(9,272	)		30,071			23,558			27,992			29,972			25,972
Income (Loss) from Continuing Operations Before Income Tax					43,326			29,435			156,016			146,244			(695,933	)		261,196			332,260	(d)
Income tax (provision) benefit					(16,897	)		(11,480	)		(63,992	)		(32,035	)(b)		262,367			(109,880	)		(144,752	)
Net Income (Loss) from Continuing Operations					26,429			17,955			83,785			105,959			(441,849	)		143,055			179,290
Gain (Loss) from discontinuance, net of tax					—			—			—			(12,398	)		38,975			(13,508	)		2,966
Cumulative effect of accounting change, net of tax					—			—			—			—			—			(2,744	)		—
		Net Income (Loss) Applicable to Common Shareholders		$	24,407		$	15,929		$	83,785		$	93,561		$	(402,874	)	$	126,803		$	182,256

16

			Three Months Ended
			March 31,						Year Ended December 31,
(Dollars in thousands except per share
data)			2004			2003			2003			2002			2001			2000			1999
EARNINGS (LOSS) PER COMMON SHARE
Basic
	Net Income (Loss) from Continuing Operations		$	0.49		$	0.32		$	1.69		$	2.16		$	(9.06	)	$	2.95		$	3.72
	Gain (Loss) from discontinuance, net of tax			—			—			—			(0.26	)		0.80			(0.28	)		0.06
	Cumulative effect of accounting change, net of tax			—			—			—			—			—			(0.06	)		—
		Net Income (Loss) Applicable to Common Shareholders	$	0.49		$	0.32		$	1.69		$	1.90		$	(8.26	)	$	2.61		$	3.78
Diluted
	Net Income (Loss) from Continuing Operations		$	0.45		$	0.30		$	1.57		$	1.96		$	(9.06	)	$	2.65		$	3.29
	Gain (Loss) from discontinuance, net of tax			—			—			—			(0.22	)		0.80			(0.24	)		0.06
	Cumulative effect of accounting change, net of tax			—			—			—			—			—			(0.05	)		—
		Net Income (Loss) Applicable to Common Shareholders	$	0.45		$	0.30		$	1.57		$	1.74		$	(8.26	)	$	2.36		$	3.35
Common dividends			$	0.10		$	0.10		$	0.40		$	0.40		$	0.40		$	0.40		$	0.40
Common shareholders’ equity			$	15.83		$	13.68		$	15.21		$	13.43		$	12.04		$	20.90		$	19.15
STATISTICS
Total assets			$	2,814,935		$	3,018,011		$	2,749,852		$	2,739,761		$	2,990,020		$	3,244,941		$	3,059,334
Long-term obligations(e)				651,272			677,338			536,314			557,610			565,815			534,649			433,446
Capital expenditures				12,895			44,866			137,378			84,838			192,125			235,221			324,604
Effective (tax) benefit rate				(39.00	)%		(39.00	)%		(41.02	)%		(21.9	)%(b)		37.7	%		(42.1	)%		(43.6	)%
Basic average shares				49,835,663			49,396,071			49,537,945			49,139,134			48,752,480			48,490,662			48,189,618
Market price range				$30.50-		$	29.19-		$	24.44-		$	27.36-		$	21.05-		$	20.25-		$	28.28-
				$35.84		$	34.70		$	35.77		$	38.28		$	39.88		$	34.75		$	45.52
Number of shareholders at December 31				—			—			8,006			8,131			8,561			8,802			9,520
Number of regular full-time employees				26,000			26,200			26,000			26,200			26,100			28,700			28,300

CNF’s results from continuing operations included various income or loss items that affected the year-to-year comparisons of the reported operating income (loss) of its reporting segments. These materially significant unusual or infrequently occurring items that affected operating income in the three years ended December 31, 2003 are summarized in CNF’s 2003 Annual Report on Form 10-K, Item 8, “Financial Statements and Supplementary Data,” under Notice 16, “Segment Reporting — Unusual or Infrequent Items,” incorporated by reference in this prospectus. Other materially significant items affecting the year-to-year comparisons of net income from continuing operations in the years reported above are described in the notes below and in CNF’s 2003 Annual Report on Form 10-K, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, incorporated by reference in this prospectus.

(a)  Includes an $8.7 million first-quarter net gain, $5.3 million after tax, ($0.09 per diluted share) from the sale of a property.

17

(b)	Includes a $25.0 million third-quarter ($0.44 per diluted share) reversal of accrued taxes related to the settlement with the IRS of aircraft maintenance issues.
(c)	Includes a $16.5 million first-quarter net gain, $9.3 million after tax, ($0.17 per diluted share) from a corporate legal settlement, and a $10.1 million second-quarter net gain, $5.7 million after tax, ($0.10 per diluted share) from the sale of the assets of CNF’s former wholesale parts and supplies distributor.
(d)	Includes a $9.6 million fourth-quarter net gain, $5.4 million after tax, ($0.10 per diluted share) from the sale of securities.
(e)	Reflects adoption of FASB Interpretation No. 46 (“FIN 46R”) effective in the first quarter of 2004, under which CNF deconsolidated a subsidiary trust holding Term Convertible Securities (“TECONS”). As a result, CNF’s TECONS are no longer reported as a mezzanine security while CNF’s convertible subordinated debentures held by the subsidiary trust are reported as long-term debt. The prior periods were restated.

18

DESCRIPTION OF NEW DEBENTURES

      The form and the terms of the new debentures and the old debentures are identical in all material respects, except that transfer restrictions and registration rights applicable to the old debentures do not apply to the new debentures. The new debentures will be issued pursuant to an indenture between us and The Bank of New York, as Trustee. The terms of the debentures include those stated in the indenture and those made part of the indenture by reference to the Trust Indenture Act of 1939, as amended. The debentures are subject to all such terms and holders of debentures are referred to the indenture and the Trust Indenture Act for a statement thereof. The following summary of the material provisions of the indenture does not purport to be complete and is qualified in its entirety by reference to the indenture, including the definitions therein of certain terms used below. We urge you to read the indenture and the Trust Indenture Act because they, and not this summary, define your rights as a holder of debentures. The definitions of certain terms used in the following summary are set forth under “— Certain Definitions.”

General Terms of the Debentures

      The new debentures will be issued under an indenture, dated as of March 8, 2000, between us and The Bank of New York (as successor to Bank One Trust Company, National Association), as trustee, as supplemented by supplemental indenture no. 1 thereto dated April 30, 2004 (which are referred to collectively as the “indenture”). The debentures will mature on May 1, 2034. Interest on the debentures will accrue from April 30, 2004 at the rate set forth on the cover of this prospectus. Interest on the debentures will be payable semi-annually in arrears on May 1 and November 1 of each year, beginning November 1, 2004, to the persons in whose names the debentures were registered at the close of business on the next preceding April 15 and October 15, respectively. Interest on the debentures will be computed on the basis of a 360-day year comprised of twelve 30-day months.

      The debentures will be our senior unsecured obligations and will rank on a parity with all our other senior unsecured and unsubordinated indebtedness. The debentures will be effectively subordinated to the indebtedness and claims of the creditors of our subsidiaries.

      At March 31, 2004, our consolidated subsidiaries had outstanding liabilities, excluding intercompany liabilities, aggregating approximately $1.16 billion and approximately $42.6 million of outstanding letters of credit, bank guarantees and overdraft facilities. At December 31, 2003, these subsidiaries were subject to long-term non-cancelable operating leases requiring future minimum lease payments of approximately $250.4 million through 2013. In addition, our material subsidiaries have guaranteed amounts due under our $385 million bank credit facility. At March 31, 2004, there were no borrowings outstanding and $249.0 million of letters of credit were outstanding under the $385 million credit facility.

      On April 30, 2004, we issued $300.0 million in aggregate principal amount of old debentures. We will issue up to an aggregate principal amount of $300.0 million of new debentures. The indenture does not limit the amount of notes, debentures or other evidences of indebtedness that we may issue thereunder and provides that notes, debentures or other evidences of indebtedness may be issued from time to time in one or more series. We may from time to time, without giving notice to or seeking the consent of the holders of the debentures, issue debentures having the same ranking and the same interest rate, maturity and other terms as the debentures issued in this offering. Any additional debentures having such similar terms, together with the applicable debentures, will constitute a single series of debentures under the indenture.

      We maintain an office or agency in The City of New York where debentures may be surrendered for payment, registration of transfer or exchange and where notices and demands in respect of the debentures and the indenture may be delivered to us. That office or agency will initially be the designated office of the trustee. However, so long as the debentures are in book-entry form, you will receive payments and may transfer debentures only through the facilities of the depositary and its direct and indirect participants. See “— Book-Entry; Delivery and Form.”

      Any payment otherwise required to be made in respect of debentures on a date that is not a business day for the debentures may be made on the next succeeding business day with the same force and effect

19

as if made on that date. No additional interest shall accrue as a result of a delayed payment. A business day is defined in the indenture as a day other than a Saturday, Sunday or other day on which banking institutions in The City of New York are authorized or required by law, regulation or executive order to close.

      The debentures will be issued only in fully registered form without coupons in denominations of $1,000 or any whole multiple of $1,000. No service charge will be made for any transfer or exchange of the debentures, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. The debentures will be issued in book-entry form and represented by one or more global debentures registered in the name of a nominee of The Depository Trust Company (“DTC”). Except as described under “— Book-Entry; Delivery and Form” below, the debentures will not be issuable in certificated form.

      We will initially appoint the trustee at its designated corporate trust office as a paying agent, transfer agent and registrar for the debentures. We will cause each transfer agent to act as a co-registrar and will cause to be kept at the office of the registrar a register in which, subject to such reasonable regulations as we may prescribe, we will provide for the registration of the debentures and registration of transfers of the debentures. We may vary or terminate the appointment of any paying agent or transfer agent, or appoint additional or other such agents or approve any change in the office through which any such agent acts.

      We will provide you with notice of any resignation, termination or appointment of the trustee or any paying agent or transfer agent, and of any change in the office through which any such agent will act.

Optional Redemption

      The debentures may be redeemed, in whole or in part, at our option at any time or from time to time.

      The redemption price for the debentures to be redeemed on any redemption date will be equal to the greater of the following amounts:

•  100% of the principal amount of the debentures being redeemed on the redemption date; or

•  the sum of the present values of the remaining scheduled payments of principal of and interest on the debentures being redeemed on that redemption date (not including any portion of any payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis at the Treasury Rate (as defined below), plus 35 basis points,

plus, in each case, accrued and unpaid interest on the principal amount being redeemed to the redemption date. Notwithstanding the foregoing, installments of interest on debentures that are due and payable on interest payment dates falling on or prior to the relevant redemption date will be payable on the interest payment date to the registered holders of these debentures as of the close of business on the relevant record date according to the terms and provisions of the debentures and the indenture. The redemption price will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

      We will mail notice of any redemption at least 30 days but not more than 60 days before the redemption date to each registered holder of the debentures to be redeemed. Once notice of redemption is mailed, the debentures called for redemption will become due and payable on the redemption date and at the applicable redemption price, plus accrued and unpaid interest to the redemption date.

      “Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the debentures to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the debentures.

      “Comparable Treasury Price” means, with respect to any redemption date for the debentures, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if fewer than three such Reference

20

Treasury Dealer Quotations are obtained, the average of all such Quotations, or (C) if only one Reference Treasury Dealer Quotation is received, such Quotation.

      “Quotation Agent” means a Reference Treasury Dealer appointed by us.

      “Reference Treasury Dealer” means each of (A) Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc of America Securities LLC, J.P. Morgan Securities Inc. and PNC Capital Markets, Inc. (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a “Primary Treasury Dealer”), we will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by us.

      “Reference Treasury Dealer Quotation” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by us, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to us by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding such redemption date.

      “Treasury Rate” means, with respect to any redemption date for the debentures, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

      On and after the redemption date, interest will cease to accrue on the debentures or any portion of the debentures called for redemption on such redemption date (unless we default in the payment of the redemption price). On or before the redemption date, we will deposit with a paying agent (or the trustee) money sufficient to pay the redemption price of and accrued interest on the debentures to be redeemed on that date. If less than all of the debentures are to be redeemed, the debentures to be redeemed shall be selected by DTC, in the case of debentures represented by a global security, or by the trustee by a method the trustee deems to be fair and appropriate, in the case of debentures that are not represented by a global security.

      The debentures will not be entitled to the benefit of any mandatory redemption or repurchase by us at the option of the holders or sinking fund.

Book-Entry; Delivery and Form

The Global Debentures

      The certificates representing the new debentures will be issued in fully registered form. Except as described below, the new debentures will be initially represented by one or more global debentures in fully registered form without interest coupons. The global debentures will be deposited with, or on behalf of The Depository Trust Company, or DTC, and registered in the name of Cede & Co., as nominee of DTC, or will remain in the custody of the Trustee pursuant to the FAST Balance Certificate Agreement between DTC and the Trustee.

      Ownership of beneficial interests in each global debenture will be limited to persons who have accounts with DTC, which we refer to as DTC participants, or persons who hold interests through DTC participants. We expect that the under the procedures established by DTC, ownership of beneficial interests in each global debenture will be shown on, and transfer of ownership of those interests will be effected only through, records maintained by DTC, with respect to interests of DTC participants, and the records of DTC participants, with respect to other owners of beneficial interests in the global debenture.

Certain Book-Entry Procedures for the Global Debentures

      The descriptions of the operations and procedures of DTC set forth below are provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to change by them from time to time. We do not take any

21

responsibility for these operations or procedures, and investors are urged to contact the relevant system or its participants directly to discuss these matters.

      DTC has advised us that it is (1) a limited-purpose trust company organized under the New York Banking Law, (2) a “banking organization” within the meaning of the New York Banking Law, (3) a member of the Federal Reserve System, (4) a “clearing corporation” within the meaning of the New York Uniform Commercial Code, as amended and (5) a “clearing agency” registered pursuant to Section 17A of the Securities Exchange Act of 1934. DTC was created to hold securities for its participants and facilitates the clearance and settlement of securities transactions between participants through electronic book-entry changes to the accounts of its participants, thereby eliminating the need for physical transfer and delivery of certificates. DTC’s participants include securities brokers and dealers, including certain of the initial purchasers, banks and trust companies, clearing corporations and certain other organizations. Indirect access to DTC’s system is also available to other entities such as banks, brokers and dealers and trust companies, referred to as “indirect participants,” that clear through or maintain a custodial relationship with a participant, either directly or indirectly. Investors who are not participants may beneficially own securities held by or on behalf of DTC only through participants or indirect participants.

      Pursuant to procedures established by DTC, upon deposit of each of the global debentures, DTC will credit the accounts of participants designated by the initial purchasers with an interest in the global debentures. Ownership of the debentures will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to the interests of participants, and the records of participants and the indirect participants, with respect to the interests of persons other than participants.

      The laws of some jurisdictions may require that some types of purchasers of debentures take physical delivery of the debentures in definitive form. Accordingly, the ability to transfer interests in the debentures represented by a global debenture to these persons may be limited. In addition, because DTC can act only on behalf of its participants, who in turn act on behalf of persons who hold interests through participants, the ability of a person having an interest in debentures represented by a global debenture to pledge or transfer the interest to persons or entities that do not participate in DTC’s system, or to otherwise take actions in respect of the interest, may be affected by the lack of a physical definitive debenture in respect of the interest.

      So long as DTC or its nominee is the registered owner of a global debenture, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the debentures represented by the global debenture for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global debenture will not be entitled to have debentures represented by the global debenture registered in their names, will not receive or be entitled to receive physical delivery of certificated debentures, and will not be considered the owners or holders thereof under the indenture for any purpose, including with respect to the giving of any direction, instruction or approval to the trustee under the indenture. Accordingly, each holder owning a beneficial interest in a global debenture must rely on the procedures of DTC and, if the holder is not a participant or an indirect participant, on the procedures of the participant through which the holder owns its interest, to exercise any rights of a holder of debentures under the indenture or the global debenture.

      We understand that under existing industry practice, in the event that we request any action of holders of debentures, or a holder that is an owner of a beneficial interest in a global debenture desires to take any action that DTC, as the holder of such global debenture, is entitled to take, DTC would authorize the participants to take the action and the participants would authorize holders owning through the participants to take the action or would otherwise act upon the instruction of the holders. Neither the trustee nor we will have any responsibility or liability for any aspect of the records relating to or payments made on account of debentures by DTC, or for maintaining, supervising or reviewing any records of DTC relating to the debentures.

22

      Payments with respect to the principal of, and premium, if any, liquidated damages, if any, and interest on, any debentures represented by a global debenture registered in the name of DTC or its nominee on the applicable record date will be payable by the trustee to or at the direction of DTC or its nominee in its capacity as the registered holder of the global debenture representing the debentures under the indenture. Under the terms of the indenture, we may treat, and the trustee may treat, the persons in whose names the debentures, including the global debentures, are registered as the owners of the debentures for the purpose of receiving payment on the debentures and for any and all other purposes whatsoever. Accordingly, neither we nor the trustee has or will have any responsibility or liability for the payment of these amounts to owners of beneficial interests in the global debenture, including principal, premium, if any, liquidated damages, if any, and interest. Payments by the participants and the indirect participants to the owners of beneficial interests in the global debentures will be governed by standing instructions and customary industry practice and will be the responsibility of the participants or the indirect participants and DTC. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

      Subject to compliance with the transfer restrictions applicable to the debentures, cross-market transfers between the participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules and on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in the system in accordance with the rules and procedures and within the established deadlines (Brussels time) of the system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant global debentures in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositaries for Euroclear or Clearstream. Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a global debenture from a participant in DTC will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day, which must be a business day for Euroclear and Clearstream, immediately following the settlement date of DTC. Cash received in Euroclear or Clearstream as a result of the sale of an interest in a global debenture by or through a Euroclear or Clearstream participant to a participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

      Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the global debentures among participants in DTC, Euroclear and Clearstream, each is under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither the trustee nor we will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Issuance of Certificated Debentures

      If (1) we notify the trustee in writing that DTC is no longer willing or able to act as a depositary or clearing system for the debentures or DTC ceases to be registered as a clearing agency under the Exchange Act, and a successor depositary or clearing system is not appointed within 90 days of this notice or cessation, (2) we, at our option, notify the trustee in writing that we elect to cause the issuance of debentures in definitive form under the indenture or (3) upon the occurrence and continuation of an Event of Default under the indenture, then, upon surrender by DTC of the global debentures, certificated debentures will be issued to each person that DTC identifies as the beneficial owner of the debentures represented by the global debentures. Upon any such issuance, the trustee is required to register the

23

certificated debentures in the name of the person or persons or the nominee of any of these persons and cause the same to be delivered to these persons.

      Neither we nor the trustee shall be liable for any delay by DTC or any participant or indirect participant in identifying the beneficial owners of the related debentures and each such person may conclusively rely on, and shall be protected in relying on, instructions from DTC for all purposes, including with respect to the registration and delivery, and the respective principal amounts, of the debentures to be issued.

Certain Covenants of the Company

      The indenture (a) does not contain any financial covenants other than those summarized below, (b) will not restrict us from paying dividends or incurring additional Debt and (c) does not protect holders of debentures in the event of a highly leveraged transaction or a change in control. Moreover, our subsidiaries are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due on the debentures or to make funds available to us to do so. The restrictive covenants summarized below will apply, unless the covenants are waived or amended, so long as any of the debentures are outstanding.

Limitations on Liens

      Subject to the exceptions described below, we will not, and will not permit any Restricted Subsidiary to, directly or indirectly, at any time create, incur, assume or guarantee any Indebtedness secured by any mortgage, pledge, lien or security interest (“Lien”) on any Principal Property owned by us or any Restricted Subsidiary or any shares of capital stock or Indebtedness of any Restricted Subsidiary, whether owned on the date of the indenture or thereafter acquired, without in any such case effectively providing, concurrently with or prior to the creation, incurrence, assumption or guarantee of such Indebtedness (the “Secured Indebtedness”), that the debentures then outstanding under the indenture (together with, if we shall so determine, any other Indebtedness or other liabilities or obligations created, incurred, assumed or guaranteed by us or any Subsidiary and then existing or thereafter created, incurred, assumed or guaranteed) shall be secured by such Lien equally and ratably with (or, at our option, prior to) such Secured Indebtedness, but only so long as such Secured Indebtedness shall be so secured and outstanding; provided, however, that the foregoing covenant shall not be applicable to Indebtedness secured by any of the following:

•  Liens on any property, shares of capital stock or Indebtedness acquired (whether by merger, consolidation, acquisition of assets or capital stock, or otherwise) after the date of the indenture by us or any Restricted Subsidiary or any property constructed or improved after the date of the indenture by us or any Restricted Subsidiary, to secure or provide for the payment of all or any part of the purchase price or cost thereof, or any Indebtedness created, incurred, assumed or guaranteed to finance all or any part of the purchase thereof or the cost of construction or cost of improvement of any such property and which was created, incurred, assumed or guaranteed or for which a bona fide firm commitment in writing was executed prior to, contemporaneously with or within 270 days after the acquisition of such property, shares of capital stock or Indebtedness or the latest to occur of the completion of construction or improvement or the commencement of full operations of such property, as the case may be; provided that such Liens shall not extend to any other property of ours or any Restricted Subsidiary;

•  Liens in favor of the United States of America or any state, territory or possession thereof or other area subject to its jurisdiction or the District of Columbia, or any department, agency or instrumentality or political subdivision of the United States of America or any state, territory or possession thereof or other area subject to its jurisdiction or the District of Columbia, or in favor of any other country, or any department, agency or instrumentality or political subdivision thereof or any other domestic or foreign government or governmental body, agency or authority, to secure partial, progress, advance or other payments pursuant to any contract, statute, law or regulation or

24

	to secure any Indebtedness created, incurred, assumed or guaranteed for the purpose of financing all or any part of the purchase price or the cost of construction or improvement of the property subject to such Liens (including, but not limited to, Liens incurred in connection with pollution control, industrial revenue bond, private activity bond or similar financings);
•	Liens existing on the date of the indenture;
•	Liens for or in connection with taxes, governmental assessments or similar governmental charges or levies or legal proceedings;
•	Liens in favor of us or a Subsidiary securing Indebtedness of us or a Subsidiary;
•	Liens on any property, shares of capital stock or Indebtedness existing at the time of acquisition thereof (whether by merger, consolidation, acquisition of assets or capital stock or otherwise); provided that such Liens were not created in contemplation of such acquisition;
•	Liens on any property, shares of capital stock or Indebtedness of a Person existing at the time such Person becomes a Subsidiary or is merged or consolidated with or into us or any Subsidiary; provided that such Liens were not created in contemplation of such transaction;
•	pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation and deposits securing liability to insurance carriers under insurance or self-insurance arrangements;
•	statutory and common law Liens and landlords’, carriers’, warehousemen’s, mechanics’, suppliers’, materialmen’s, bankers’, repairmen’s and other similar Liens arising in the ordinary course of business;
•	pledges or deposits to secure performance in connection with bids, tenders, contracts or leases or surety, stay, appeal, indemnity, customs or performance bonds;
•	Liens incurred in connection with any forward contract, futures contract, swap, option or other financial agreement or arrangement (including, without limitation, any cap, floor, collar, lock or similar agreement or arrangement) which was entered into for hedging purposes or to fix, or to protect against changes in, interest rates, currency exchange rates or commodity prices; or
•	any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any Lien referred to in any of the foregoing bullet points or in this bullet point (including, without limitation, in connection with any extension, renewal, replacement or refinancing, in whole or in part, of any Indebtedness secured thereby); provided that any Lien permitted under this bullet point is limited to all or any part of the same property, shares of capital stock and/or Indebtedness subject to the Lien so extended, renewed or replaced and secures no more Indebtedness than the Indebtedness secured by the Lien so extended, renewed or replaced plus any premiums, fees, costs or expenses payable in connection with the replacement, extension, renewal or refinancing of such Lien or the Indebtedness secured thereby.

      Notwithstanding the foregoing provisions of the indenture, we and any Restricted Subsidiary may at any time create, incur, assume or guarantee Secured Indebtedness which would otherwise be subject to the foregoing restrictions if, immediately after giving effect thereto, the aggregate principal amount of all Secured Indebtedness (not including Indebtedness permitted to be secured by Liens described in the bullet points above) does not exceed 15% of Consolidated Net Tangible Assets determined as of such time.

      The indenture does not limit the amount of indebtedness or other liabilities that may be incurred by us or our subsidiaries. The indenture does not contain provisions which would give the holders of debentures the right to require us to repurchase or repay the debentures in the event of a takeover, recapitalization or similar event affecting us, a decline in the credit rating on our securities, or otherwise. However, holders of the $62.0 million aggregate principal amount of Series B notes issued by our Thrift and Stock Plan (the “TASP”), which we have guaranteed, have the right to require that we repurchase

25

those notes if, among other things, both Moody’s and Standard & Poor’s have publicly rated our long-term senior debt at less than investment grade, unless, within 45 days:

•  we have obtained, through a guarantee, letter of credit, other permitted credit enhancement or otherwise, a credit rating for those notes of at least “A” from Moody’s, Standard & Poor’s or another nationally recognized rating agency selected by the holders of those notes, and

•  we maintain a rating on those notes of “A” or better thereafter.

      Our long-term senior debt is currently rated Baa3 by Moody’s and BBB- by Standard & Poor’s. Baa3 is the lowest investment grade rating from Moody’s and BBB- is the lowest investment grade rating from Standard & Poor’s. At December 31, 2003, $62.0 million aggregate principal amount of Series B notes was outstanding. In addition, our $385 million bank credit facility, which is guaranteed by our material subsidiaries, permit the lenders to require immediate repayment of all borrowings upon a change of control or similar event with respect to us.

      The occurrence of any event or condition requiring us to repurchase or repay any of the TASP notes or borrowings discussed above could have a material adverse effect on us. Moreover, there can be no assurance that we would have sufficient funds to repurchase or repay those notes or borrowings in the event that we were required to do so or that we would be able to arrange financing for that purpose.

Certain Definitions

      “Consolidated Assets” means, as of any particular time, the amount that would be shown as total assets on the most recent consolidated balance sheet of the Company and its consolidated subsidiaries prepared in accordance with GAAP as of the end of a fiscal quarter.

      “Consolidated Net Tangible Assets” means, as of any particular time, the amount of Consolidated Assets after deducting therefrom (a) all current liabilities (excluding current liabilities which are by their terms extendible or renewable at the option of the obligor to a time more than 365 days after the time of determination and excluding current maturities of long-term debt and current maturities of capitalized lease obligations), and (b) all goodwill, tradenames, trademarks, patents, debt discount and expense and other intangibles in each case in this clause (b) net of applicable amortization, all as shown on the most recent consolidated financial statements of the Company and its consolidated subsidiaries prepared in accordance with GAAP as of the end of a fiscal quarter.

      “Indebtedness” means indebtedness for borrowed money.

      “Principal Property” means any manufacturing, distribution or warehousing facility owned by us or any Subsidiary (including any of the foregoing acquired after the date of the indenture) and located within the United States of America (including the states thereof and the District of Columbia but excluding its territories, its possessions and other areas subject to its jurisdiction), the gross book value of which exceeds 1% of our Consolidated Net Tangible Assets at the date of determination, in each case other than any of the foregoing which is determined by our board of directors not to be a Principal Property because, in the opinion of our board of directors, such facility is not of material importance to the total business conducted by us and our subsidiaries taken as a whole.

      “Restricted Subsidiary” means any Subsidiary of ours (i) substantially all of the operating assets of which are located and the principal business of which is carried on within the United States of America (including the states thereof and the District of Columbia but excluding its territories, its possessions and other areas subject to its jurisdiction); (ii) which was in existence on the date of the indenture or thereafter becomes a Subsidiary of ours; and (iii) which owns a Principal Property.

      “Subsidiary” means a corporation or other entity (i) more than 50% of the outstanding voting stock (or equivalent equity interest having voting power in the case of an entity other than a corporation) of which is owned, directly or indirectly, by us and/or one or more other Subsidiaries and (ii) if such entity is a partnership, joint venture, limited liability company or similar entity, we or another Subsidiary are the managing general partner or managing member of or otherwise controls such entity. For the purposes of

26

this definition, “voting stock (or equivalent equity interest having voting power in the case of an entity other than a corporation)” means capital stock or equity interest, as the case may be, which ordinarily has voting power for the election of directors (or equivalent persons, in the case of an entity other than a corporation), whether at all times or only so long as no senior class of stock has such voting power by reason of any contingency, and “control” means, with respect to any entity, the possession of the power to direct or cause the direction of the management and policies of such entity.

Consolidation, Merger, Sale or Conveyance

      We may consolidate with, or sell, convey or lease our properties and assets substantially as an entirety to, or merge with or into, any other corporation, if

•  either we are the continuing corporation, or the successor corporation is a domestic corporation and expressly assumes the due and punctual payment of the principal of and interest on all the debentures and the due and punctual performance and observance of all the covenants and conditions of the indenture to be performed or observed by us; and

•  immediately after the merger or consolidation, or sale, conveyance or lease, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing.

Events of Default

      An Event of Default with respect to the debentures is defined as:

•  default in the payment of any interest on any of the debentures when due and payable, and continuance of such default for a period of 30 days;

•  default in the payment of any principal of or premium on any of the debentures when due and payable either at maturity, upon any redemption, or otherwise;

•  default by us in the performance, or breach, of any other covenant or warranty contained in the debentures or in the indenture and continuance of that default or breach which shall not have been remedied for a period of 90 days after notice to us by the trustee or by the holders of at least 25% in aggregate principal amount of the outstanding debentures;

•  acceleration of the maturity of any single outstanding issue of Indebtedness of ours with an outstanding aggregate principal amount in excess of $35,000,000, as a result of an event of default thereunder, which acceleration is not annulled or which Indebtedness is not discharged within 30 days thereafter or such longer period during which we are contesting in good faith such acceleration; and

•  certain events of bankruptcy, insolvency or reorganization.

      The trustee will notify the holders of debentures of any continuing default known to the trustee which has occurred with respect to the debentures within 90 days after the occurrence of the default. Notwithstanding the foregoing, except in the case of default in the payment of the principal of or interest on any of the debentures, the trustee may withhold notice if the trustee in good faith determines that the withholding of notice is in the interests of the holders of the debentures.

      If an Event of Default (other than with respect to certain events of bankruptcy, insolvency or reorganization) with respect to any of the debentures has occurred and is continuing, either the trustee or the holders of at least 25% in principal amount of the debentures then outstanding may declare the principal amount of all the debentures to be due and payable immediately, but upon certain conditions such declaration and its consequences may be rescinded and annulled by the holders of a majority in principal amount of the debentures then outstanding. If any Event of Default with respect to certain events of bankruptcy, insolvency or reorganization relating to the Company occurs, all the principal of and

27

accrued and unpaid interest on the debentures then outstanding shall become automatically due and payable without any declaration or other act on the part of the trustee or any holder of debentures.

      Subject to the provisions of Trust Indenture Act requiring the trustee, during the continuance of an Event of Default, to act with the requisite standard of care, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders of the debentures unless such holders have offered such trustee reasonable indemnity. Subject to the foregoing, holders of a majority in principal amount of the then outstanding debentures shall have the right, subject to certain limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the trustee under the indenture. We are required to make an annual filing with the trustee of a certificate as to whether or not we are in default under the terms of the indenture.

      Notwithstanding any other provision of the indenture, the holder of a debenture shall have the right, which is absolute and unconditional, to receive payment of the principal of and premium, if any, and interest, if any, on such debenture on the respective due dates therefor (as the same may be extended, if applicable, in accordance with the terms of the debentures) and to institute suit for enforcement of any such payment, and such right shall not be impaired without the consent of such holder.

Satisfaction and Discharge of Indenture

      The indenture, except for certain specified surviving obligations, will be discharged and canceled upon the satisfaction of certain conditions, including the payment of all the debentures or the deposit with the trustee of cash or appropriate government obligations or a combination of the two sufficient for the payment or redemption in accordance with the indenture and the terms of the debentures.

Modification of the Indenture

      The indenture contains provisions permitting us and the trustee to execute certain supplemental indentures adding, changing or eliminating any provisions to the indenture or any supplemental indenture with respect to the debentures or modifying in any manner the rights of the holders of the debentures. However, no supplemental indenture may, among other things, (a) change the final maturity of any security, or reduce the rate or extend the time of payment of any interest on the security, or reduce the principal amount of any security, premium on any security, or reduce any amount payable upon any redemption of any security, without the consent of the holder of each security so affected, or (b) reduce the percentage of debentures that is required to approve a supplemental indenture or reduce the requirements for a quorum or voting at a meeting of holders of the debentures, without the consent of the holders of all debentures then outstanding.

Governing Law

      The indenture will provide that it and the debentures will be governed by, and construed in accordance with, the laws of the State of New York.

Concerning the Trustee

      We maintain customary banking relationships with affiliates of The Bank of New York, the trustee under the indenture, and its affiliates.

28

Registration Rights; Additional Interest

Exchange Offer

      When we issued the old debentures, we entered into an exchange and registration rights agreement with Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the several initial purchasers. Pursuant to the registration rights agreement, we agreed to:

•  file a registration statement relating to a registered exchange offer for the old debentures with the SEC on or prior to the 90th day after the date that the old debentures were first issued;

•  use our reasonable best efforts to cause the SEC to declare the registration statement effective under the Securities Act no later than the 180th day after the old debentures were first issued; and

•  use our reasonable best efforts to complete the exchange offer no later than 30 business days after the registration statement is declared effective.

      During the exchange offer, we will offer, to all holders of debentures who are legally eligible to participate in the exchange offer, the opportunity to exchange their old debentures for new debentures. We will keep the exchange offer open for at least 20 business days (or longer, if required by applicable law or otherwise extended by us, at our option) after the date notice of the exchange offer is mailed to the holders of the old debentures. For each old debenture surrendered pursuant to the exchange offer and not withdrawn by the holder, the holder of the old debenture will receive a new debenture having a principal amount equal to that of the surrendered debenture. Interest on each new debenture will accrue from the last date on which interest was paid on the debenture surrendered in exchange or, if no interest has been paid, from the original issue date of the old debenture.

      Under existing interpretations of the Securities Act by the SEC’s staff contained in several no-action letters to third parties, and subject to the immediately following sentence, we believe that the new debentures would generally be freely transferable by holders after the exchange offer without further registration under the Securities Act, subject to certain representations required to be made by each holder of old debentures, as set forth below. However, any holder of old debentures who is one of our “affiliates” (as defined in Rule 405 under the Securities Act) or who intends to participate in the exchange offer for the purpose of distributing the new debentures:

•  will not be able to rely on the interpretation of the SEC’s staff; and

•  must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

      We do not intend to seek our own interpretation regarding the exchange offer and there can be no assurance that the SEC’s staff would make a similar determination with respect to the new debentures as it has in other interpretations to other parties, although we have no reason to believe otherwise. If you wish to exchange old debentures for new debentures in the exchange offer, you will be required to make certain representations.

Shelf Registration

      We may also be required to file a shelf registration statement to permit holders of the old debentures who were not eligible to participate in the exchange offer to resell the debentures periodically without being limited by the transfer restrictions. We will only be required to file a shelf registration statement if:

•  after the date the old debentures are issued, there is a change in law or applicable interpretations of the law by the staff of the SEC, and as a result we are not permitted to complete the exchange offer as contemplated by the registration rights agreement;

•  any holder of the old debentures is not eligible to participate in the exchange offer according to SEC interpretations;

29

•  any holder of the debentures, according to SEC interpretations, does not receive freely tradeable new debentures;

•  the exchange offer registration statement is not declared effective within 180 days of the date the old debentures were first issued or the exchange offer is not consummated within 30 business days after the exchange offer registration statement is declared effective, but we may terminate such shelf registration statement at any time, without penalty, if the exchange offer registration statement is declared effective or the exchange offer is consummated; or

•  upon the request of any initial purchaser made within 90 days after the consummation of the exchange offer with respect to securities not eligible to be exchanged in the exchange offer and held by it following the consummation of the exchange offer or if the initial purchasers do not receive freely tradeable exchange securities in the exchange offer.

      The shelf registration statement will permit only holders that comply with specified requirements to resell their debentures from time to time. In particular, such holders must:

•  provide specific information in connection with the shelf registration statement within 20 days of the date that we mail the request for such information (such request for information referred to as, a notice and questionnaire); and

•  agree in writing to be bound by all provisions of the registration rights agreement, including the indemnification obligations.

      We will, in the event of the filing of a shelf registration statement, provide to each holder of debentures that are covered by the shelf registration statement copies of the prospectus which is a part of the shelf registration statement and notify each such holder when the shelf registration statement has become effective. A holder who sells debentures pursuant to the shelf registration statement will be required to be named as a selling security holder in the prospectus and to deliver a copy of the prospectus to purchasers. Such holder will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales, and will be bound by the provisions of the registration rights agreement which are applicable to such a holder, including the indemnification obligations.

      If a shelf registration statement is required, we will:

•  file the shelf registration statement with the SEC no later than 30 days after so required or requested pursuant to the registration rights agreement;

•  use our reasonable best efforts to cause the shelf registration statement to be declared effective upon the later of 90 days after the date on which the Company is required to file the shelf registration statement and 180 days after the old debentures are first issued; and

•  use our reasonable best efforts to keep the shelf registration statement effective for a period of two years after the date the old debentures are first issued, or if earlier until all of the debentures covered by the shelf registration statement are sold thereunder or become freely tradable.

Suspension of Registration Statement

      During any 365-day period, we will have the ability to suspend the availability of the shelf registration statement or, with respect to the use in any resales by a holder of new debentures that is a broker-dealer, the exchange offer registration statement for up to four periods of up to 45 consecutive days (except for the consecutive 45-day period immediately prior to the maturity of the debentures), but no more than an aggregate of 90 days during any 365-day period, if our board of directors determines in good faith that there is a valid business reason for the suspension.

30

Restrictive Legend

      Each debenture will contain a legend to the effect that the holder of the debenture, by its acceptance thereof, agrees to be bound by the provisions of the registration rights agreement. In that regard, if a holder receives notice from us of any event which:

•  makes any statement in the prospectus which is part of the shelf registration statement (or, in the case of participating broker/ dealers, the prospectus which is part of the exchange offer registration statement) untrue in any material respect;

•  requires the making of any changes in the prospectus to make the statement therein not misleading; or

•  is specified in the registration rights agreement, the holder (or participating broker/ dealer, as the case may be) will suspend the sale of debentures pursuant to that prospectus until we have either:

•  amended or supplemented the prospectus to correct the misstatement or omission; and

•  furnished copies of the amended or supplemented prospectus to the holder (or participating broker/dealer, as the case may be); or

•  given notice that the sale of the debentures may be resumed.

Additional Interest

      If a Registration Default occurs (as defined below), then we will be required to pay additional interest to each holder of the old debentures. If a Registration Default occurs, we will pay additional interest equal to 0.25% per annum until all Registration Defaults have been cured. However, in no event will the rate of additional interest exceed 0.25% per annum. Such additional interest will accrue only for those days that a Registration Default occurs and is continuing. All accrued additional interest will be paid to the holders of such debentures in the same manner as interest payments on the debentures, with payment being made on the interest payment date for the debentures. Following the cure of all Registration Defaults, no more additional interest will accrue. You will not be entitled to receive any additional interest if you were eligible to exchange your debentures for exchange debentures in the exchange offer and you did not validly tender your debentures. Any holder of debentures that has been sent a notice and questionnaire who does not return a completed and signed notice and questionnaire to us within 20 days of our mailing such notice and questionnaire, will not be entitled to receive additional interest on the holder’s debentures in connection with a Registration Default until we receive the completed and signed notice and questionnaire.

      A “Registration Default” includes any of the following:

•  we fail to file any of the registration statements required by the registration rights agreement on or before the date specified for such filing;

•  any of such registration statements is not declared effective by the SEC on or prior to the date specified for such effectiveness;

•  we fail to complete the exchange offer on or prior to the date specified for such completion; or

•  the shelf registration statement or the exchange offer registration statement is declared effective but thereafter ceases to be effective or usable in connection with resales of the debentures during the period specified in the registration rights agreement, subject to certain exceptions for limited periods of time with respect to the shelf registration statement or the exchange offer registration statement, as the case may be, as set forth above under the heading “— Suspension of Registration Statement.”

31

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

      The following is a summary of the anticipated material United States federal income tax consequences to a holder of old debentures relating to the exchange of old debentures for new debentures. This summary is based upon existing United States federal income tax law, which is subject to change, possibly with retroactive effect. This summary does not discuss all aspects of United States federal income taxation which may be important to particular investors in light of their individual investment circumstances, such as debentures held by investors subject to special tax rules (e.g., financial institutions, insurance companies, broker-dealers, and foreign or domestic tax-exempt organizations (including private foundations)), or to persons that hold the old debentures as part of a straddle, hedge, conversion, constructive sale, or other integrated security transaction for United States federal income tax purposes or that have a functional currency other than the United States dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this summary does not address any state, local, or non-United States tax considerations. Each prospective investor is urged to consult his tax advisor regarding the United States federal, state, local, and non-United States income and other tax considerations of the acquisition, ownership, and disposition of the new debentures.

Exchange of Old Debentures for New Debentures

      An exchange of old debentures for new debentures pursuant to the exchange offer will be ignored for United States federal income tax purposes. Consequently, a holder of old debentures will not recognize gain or loss, for United States federal income tax purposes, as a result of exchanging old debentures for new debentures pursuant to the exchange offer. The holding period of the new debentures will be the same as the holding period of the old debentures and the tax basis in the new debentures will be the same as the adjusted tax basis in the old debentures as determined immediately before the exchange.

32

PLAN OF DISTRIBUTION

      Each broker-dealer that receives new debentures for its own account in the exchange offer must acknowledge that it will deliver a prospectus in connection with any resale of these new debentures. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of new debentures received in exchange for old debentures where the old debentures were acquired as a result of market-making activities or other trading activities. We have agreed, that for a period of 120 days after the consummation of the exchange offer, we will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any resale.

      We will not receive any proceeds from any sale of new debentures by broker-dealers. New debentures received by broker-dealers for their own account in the exchange offer may be sold from time to time in one or more transactions:

•  in the over-the-counter market,

•  in negotiated transactions,

•  through the writing of options on the new debentures, or

•  a combination of methods of resale, at market prices prevailing at the time of resale, at prices related to the prevailing market prices or at negotiated prices.

      Any resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any broker-dealer or the purchasers of any new debentures. Any broker-dealer that resells new debentures that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of new debentures may be considered an underwriter within the meaning of the Securities Act and any profit of any resale of new debentures and any commissions or concessions received by any person may be deemed to be underwriting compensation under the Securities Act. Any broker-dealer that resells new debentures that were received by it for its own account in the exchange offer and any broker-dealer that participates in a distribution of those new debentures may be considered an underwriter within the meaning of the Securities Act and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction, including the delivery of a prospectus that contains information with respect to any selling holder required by the Securities Act in connection with any resale of the new debentures. The letter of transmittal states that, by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the Securities Act.

      Furthermore, any broker-dealer that acquired any of the old debentures directly from us:

•  may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan, Stanley Co. Inc., SEC no-action letter (June 5, 1991) and Shearman Sterling, SEC no-action letter (July 2, 1993); and

•  must also be named as a selling holder of debentures in connection with the registration and prospectus and delivery requirements of the Securities Act relating to any resale transaction.

      For a period of 120 days after the consummation of the exchange offer, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests these documents in the letter of transmittal. We have agreed to pay all expenses incident to the exchange offer other than commissions or concessions of any broker-dealer and will indemnify the holders of the old debentures (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

33

LEGAL MATTERS

      Certain legal matters regarding the new debentures will be passed upon for us by Skadden, Arps, Slate, Meagher & Flom LLP, Los Angeles, California.

EXPERTS

      Our audited consolidated financial statements and schedule as of December 31, 2003 and 2002, and for each of the years in the two-year period ended December 31, 2003, have been incorporated by reference herein in reliance of reports of KPMG LLP, independent registered public accounting firm, incorporated herein, and upon the authority of said firm as experts in accounting and auditing. The audit report refers to the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, as well as the adjustments that were applied to restate the disclosures of reportable segments reflected in the 2001 consolidated financial statements to conform to the 2003 and 2002 composition of reportable segments. However, they were not engaged to audit, review, or apply any procedures to the 2001 consolidated financial statements other than with respect to such revisions and adjustments.

      Our audited consolidated financial statements and schedule as of and for the years ended December 31, 2001 incorporated by reference in this prospectus have been audited by Arthur Andersen LLP, independent public accountants. On May 30, 2002, we dismissed Arthur Andersen LLP as our independent auditors. As representatives of Arthur Andersen LLP were not available, we were unable to obtain Arthur Andersen LLP’s written consent to the inclusion of Arthur Andersen LLP’s audit report with respect to our financial statements for the year ended December 31, 2001 in our Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

      Under these circumstances, we have dispensed with the requirement under Section 7 of the Securities Act, to file Arthur Andersen LLP’s consent as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2003, in reliance on Rule 437a under the Securities Act. Because we were unable to obtain the consent of Arthur Andersen to the inclusion of their audit report, Arthur Andersen LLP will not have any liability under Section 11(a) of the Securities Act in the event that the above-mentioned financial statements contain any untrue statements of a material fact or omit to state a material fact required to be stated therein, in each case by virtue of their inclusion in this prospectus. Accordingly, you would be unable to assert a claim against Arthur Andersen LLP under Section 11(a) of the Securities Act.

34

AVAILABLE INFORMATION AND INCORPORATION BY REFERENCE

      We are a reporting company under the Exchange Act, and file annual reports, quarterly reports and other documents with the SEC. The public may read and copy any of our filings at the SEC’s Public Reference Room at 450 Fifth Street NW, Washington D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Because we make filings with the SEC electronically, access to the information is available at the SEC’s Internet website at www.sec.gov. This site contains reports and other information regarding issuers that file electronically with the SEC. We are a publicly held corporation and our common stock is traded on the New York Stock Exchange under the symbol “CNF.” Reports and other information regarding issuers filed with the SEC can also be inspected at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York, 10005. We also make available free of charge upon request our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC.

      In this prospectus we have incorporated by reference certain reports and other information we have filed, or will file, with the SEC. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. Any statement contained in any document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus, to the extent that a statement contained in or omitted from this prospectus, or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus. We are incorporating by reference:

•  our Annual Report on Form 10-K for the fiscal year ended December 31, 2003, which was filed on March 11, 2004;

•  our Definitive Proxy Statement on Form 14A, which we filed with the Commission on March 16, 2004; and

•  our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2004, which we filed with the Commission on May 7, 2004.

      All documents that we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 prior to the termination of this exchange offer will be deemed to be incorporated by reference into this prospectus from the date of filing such documents. These documents are or will be available for inspection or copying of the locations identified above.

      We will provide a copy of the information we incorporate by reference, at no cost, to each person to whom this prospectus is delivered. To request a copy of any or all of this information, you should write or telephone us at the following address and telephone number:

CNF Inc.

Office of the Corporate Secretary

3240 Hillview Avenue

Palo Alto, California 94304

Telephone: (650) 494-2900

      In order to obtain timely delivery, you must request the information no later than five business days before you must make your investment decision.

35

$300,000,000

CNF Inc.

6.70% Senior Debentures due 2034

PROSPECTUS

                    , 2004

Until                     , 2004, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 20. Indemnification of Directors and Officers

      As authorized by Section 145 of the Delaware General Corporation Law, each director and officer of the registrant may be indemnified by the registrant against expenses (including attorney’s fees, judgments, fines and amounts paid in settlement) actually or reasonably incurred in connection with the defense or settlement of any threatened, pending or completed legal proceedings in which he is involved by reason of the fact that he is or was a director or officer of the registrant if he acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interest of the registrant and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe that his conduct was unlawful. If the legal proceeding, however, is by or in the right of the registrant, the director or officer may not be indemnified in respect of any claim, issue or matter as to which he shall have been adjusted to be liable for negligence or misconduct in the performance of his duty to the registrant unless a court determines otherwise. The registrant’s certificate of incorporation and by-laws, which are filed as an exhibit to this registration statement, contains provisions authorizing indemnification to the fullest extent permitted by Delaware Law.

      The Company has obtained insurance policies under which the Company’s directors and officers are insured, within the limits and subject to the limitations of the policies, against certain expenses in connection with the defense of certain actions, suits or proceedings, and certain liabilities which might be imposed as a result of certain actions, suits or proceedings, to which they are parties by reason of being or having been such directors or officers.

      Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Item 21. Exhibits and Financial Statement Schedules

      (a) Exhibits

Exhibit No.		Exhibit
	1.1	Purchase Agreement, dated as of April 27, 2004, among CNF Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the initial purchasers named therein
	4.1	Form of Indenture between CNF Transportation Inc. and Bank One Trust Company, National Association (Exhibit 4(d)(i) to CNF’s Form 8-K dated March 3, 2000*).
	4.2	Supplemental Indenture No. 1, dated as of April 30, 2004, by and between CNF Inc. and The Bank of New York
	4.3	Form of Global 6.70% Senior Debentures due 2034 (included in Exhibit 4.2)
	4.4	Exchange and Registration Rights Agreement, dated as of April 30, 2004, by and among CNF Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the initial purchasers named therein
	4.5	Certificate of Designations of the Series B Cumulative Convertible Preferred Stock. (Exhibit 4.1 as filed on Form SE dated May 25, 1989*)
	4.6	Indenture between the Registrant and Bank One, Columbus, NA, as successor trustee, with respect to 9 1/8% Notes Due 1999, Medium-Term Notes, Series A and 7.35% Notes due 2005. (Exhibit 4.1 as filed on Form SE dated March 20, 1990*)
	4.7	Indenture between the Registrant and The First National Bank of Chicago Bank, trustee, with respect to debt securities. (Exhibit 4(d) as filed on Form S-3 dated June 27, 1995*)

II-1

Exhibit No.		Exhibit
	4.8	Indenture between the Registrant and Bank One, Columbus, NA, trustee, with respect to subordinated debt securities. (Exhibit 4(e) as filed on Form S-3 dated June 27, 1995*)
	4.9	Form of Security for 7.35% Notes due 2005 issued by Consolidated Freightways, Inc. (Exhibit 4.4 as filed on Form S-4 dated June 27, 1995*)
	4.10	Declaration of Trust of the Trust (Exhibit 4(k) to CNF’s Amendment 1 to Form S-3 dated May 30, 1997*)
	4.11	Form of Amended and Restated Declaration of Trust of the Trust, including form of Trust Preferred Security. (Exhibit 4(l) to CNF’s Amendment 1 to Form S-3 dated May 9, 1997*)
	4.12	Form of Guarantee Agreement with respect to Trust Preferred Securities. (Exhibit 4(m) to CNF’s Amendment 1 to Form S-3 dated May 30, 1997*)
	4.13	Form of Security for 8 7/8% Notes due 2010 issued by CNF Transportation Inc. (Exhibit 4(i) to CNF’s Form 8-K dated March 3, 2000*).
	4.14	$350 million Amended and Restated Credit Agreement dated July 3, 2001 among CNF Inc. and various financial institutions. (Exhibit 4.11 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.15	Security Agreement for the $350 million Credit Agreement dated December 21, 2001. (Exhibit 4.12 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.16	Amendment No. 1 dated December 21, 2001 to the $350 Million Credit Agreement. (Exhibit 4.13 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.17	Amendment No. 2 dated February 22, 2002 to the $350 Million Credit Agreement. (Exhibit 4.14 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.18	Amendment No. 3 dated August 1, 2003 to the $350 Million Credit Agreement. (Exhibit 4.15 to CNF’s Form 10-Q for the quarter ended June 30, 2003*)
	4.19	Amendment dated August 8, 2003 to 6.00% Senior CNF Plan Guaranteed Notes. (Exhibit 4.16 to CNF’s Form 10-Q for the quarter ended June 30, 2003*)
	4.20	Amendment No. 4 dated January 23, 2004 to the $350 Million Credit Agreement. (Exhibit 4.17 to CNF’s Form 10-K for the year ended December 31, 2003.*)
	5	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to the new notes.
	12.a	Computation of ratios of earnings to fixed charges.
	12.b	Computation of ratios of earnings to combined fixed charges and preferred stock dividends.
	23.1	Consent of Independent Registered Public Accounting Firm.
	23.2	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).
	25	Statement of Eligibility of Trustee
	99.1	Note Agreement dated as of July 17, 1989, between the ESOP, Consolidated Freightways, Inc. and the Note Purchasers named therein. (Exhibit 28.1 as filed on Form SE dated July 21, 1989*)
	99.2	Guarantee and Agreement dated as of July 17, 1989, delivered by Consolidated Freightways, Inc. (Exhibit 28.2 as filed on Form SE dated July 21, 1989*).
	99.3	Form of Restructured Note Agreement between Consolidated Freightways, Inc., Thrift and Stock Ownership Trust as Issuer and various financial institutions as Purchasers named therein, dated as of November 3, 1992. (Exhibit 28.4 to CNF’s Form 10-K for the year ended December 31, 1992*).
	99.4	Form of Letter of Transmittal
	99.5	Form of Notice of Guaranteed Delivery.
	99.6	Form of Letter to Clients.
	99.7	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

II-2

*  Previously filed with the Securities and Exchange Commission and incorporated herein by reference.

**	Incorporated by reference to indicated reports filed under the Securities Act of 1934, as amended, by Emery Air Freight Corporation File No. 1-3893.
#	Designates a contract or compensation plan for Management or Directors.

Item 22. Undertakings

      The undersigned registrant hereby undertakes:

      (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement;

      (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

      (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the ’Calculation of Registration Fee’ table in the effective registration statement;

      (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by these paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities and Exchange Act of 1934 that are incorporated by reference in the registration statement.

      (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference to the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in

II-3

connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

      The undersigned registrants hereby undertake (i) to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means; and (ii) to arrange or provide for a facility in the U.S. for the purpose of responding to such requests. The undertaking in subparagraph (i) above includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request.

      The undersigned registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

II-4

SIGNATURES

      Pursuant to the requirements of the Securities Act, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Palo Alto, State of California, on June 4, 2004.

CNF INC.

By:  /s/ EBERHARD G.H. SCHMOLLER

Name:        Eberhard G.H. Schmoller

Title: Senior Vice President, General Counsel and Secretary

      Each person whose signature appears below hereby constitutes and appoints Sanchayan Ratnathicam and Eberhard G.H. Schmoller, and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any and all (1) amendments (including post-effective amendments) and additions to this registration statement and (2) registration statements, and any and all amendments thereto (including post-effective amendments), relating to the offering contemplated pursuant to Rule 462 under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ GREGORY L. QUESNEL Gregory L. Quesnel	President and Chief Executive Officer	June 4, 2004
/s/ SANCHAYAN RATNATHICAM Sanchayan Ratnathicam	Senior Vice President and Chief Financial Officer	June 4, 2004
/s/ KEVIN S. COEL Kevin S. Coel	Vice President and Controller	June 4, 2004
/s/ W. KEITH KENNEDY, JR. W. Keith Kennedy, Jr.	Chairman of the Board	June 4, 2004

II-5

Signature	Title	Date
/s/ JOHN C. POPE John C. Pope	Director	June 4, 2004
/s/ PETER W. STOTT Peter W. Stott	Director	June 4, 2004
/s/ MICHAEL J. MURRAY Michael J. Murray	Director	June 4, 2004
/s/ ROBERT D. ROGERS Robert D. Rogers	Director	June 4, 2004
/s/ WILLIAM J. SCHROEDER William J. Schroeder	Director	June 4, 2004
/s/ CHELSEA C. WHITE III Chelsea C. White III	Director	June 4, 2004

II-6

EXHIBIT INDEX

Exhibit No.		Exhibit
	1.1	Purchase Agreement, dated as of April 27, 2004, among CNF Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the initial purchasers named therein
	4.1	Form of Indenture between CNF Transportation Inc. and Bank One Trust Company, National Association (Exhibit 4(d)(i) to CNF’s Form 8-K dated March 3, 2000*).
	4.2	Supplemental Indenture No. 1, dated as of April 30, 2004, by and between CNF Inc. and The Bank of New York
	4.3	Form of Global 6.70% Senior Debentures due 2034 (included in Exhibit 4.2)
	4.4	Exchange and Registration Rights Agreement, dated as of April 30, 2004, by and among CNF Inc., Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the initial purchasers named therein
	4.5	Certificate of Designations of the Series B Cumulative Convertible Preferred Stock. (Exhibit 4.1 as filed on Form SE dated May 25, 1989*)
	4.6	Indenture between the Registrant and Bank One, Columbus, NA, as successor trustee, with respect to 9 1/8% Notes Due 1999, Medium-Term Notes, Series A and 7.35% Notes due 2005. (Exhibit 4.1 as filed on Form SE dated March 20, 1990*)
	4.7	Indenture between the Registrant and The First National Bank of Chicago Bank, trustee, with respect to debt securities. (Exhibit 4(d) as filed on Form S-3 dated June 27, 1995*)
	4.8	Indenture between the Registrant and Bank One, Columbus, NA, trustee, with respect to subordinated debt securities. (Exhibit 4(e) as filed on Form S-3 dated June 27, 1995*)
	4.9	Form of Security for 7.35% Notes due 2005 issued by Consolidated Freightways, Inc. (Exhibit 4.4 as filed on Form S-4 dated June 27, 1995*)
	4.10	Declaration of Trust of the Trust (Exhibit 4(k) to CNF’s Amendment 1 to Form S-3 dated May 30, 1997*)
	4.11	Form of Amended and Restated Declaration of Trust of the Trust, including form of Trust Preferred Security. (Exhibit 4(l) to CNF’s Amendment 1 to Form S-3 dated May 9, 1997*)
	4.12	Form of Guarantee Agreement with respect to Trust Preferred Securities. (Exhibit 4(m) to CNF’s Amendment 1 to Form S-3 dated May 30, 1997*)
	4.13	Form of Security for 8 7/8% Notes due 2010 issued by CNF Transportation Inc. (Exhibit 4(i) to CNF’s Form 8-K dated March 3, 2000*).
	4.14	$350 million Amended and Restated Credit Agreement dated July 3, 2001 among CNF Inc. and various financial institutions. (Exhibit 4.11 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.15	Security Agreement for the $350 million Credit Agreement dated December 21, 2001. (Exhibit 4.12 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.16	Amendment No. 1 dated December 21, 2001 to the $350 Million Credit Agreement. (Exhibit 4.13 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.17	Amendment No. 2 dated February 22, 2002 to the $350 Million Credit Agreement. (Exhibit 4.14 to CNF’s Form 10-K for the year ended December 31, 2002*)
	4.18	Amendment No. 3 dated August 1, 2003 to the $350 Million Credit Agreement. (Exhibit 4.15 to CNF’s Form 10-Q for the quarter ended June 30, 2003*)
	4.19	Amendment dated August 8, 2003 to 6.00% Senior CNF Plan Guaranteed Notes. (Exhibit 4.16 to CNF’s Form 10-Q for the quarter ended June 30, 2003*)
	4.20	Amendment No. 4 dated January 23, 2004 to the $350 Million Credit Agreement.(Exhibit 4.17 to CNF’s Form 10-K for the year ended December 31, 2003.*)
	5	Opinion of Skadden, Arps, Slate, Meagher & Flom LLP with respect to the new notes.
	12.a	Computation of ratios of earnings to fixed charges.
	12.b	Computation of ratios of earnings to combined fixed charges and preferred stock dividends.
	23.1	Consent of Independent Registered Public Accounting Firm.

Exhibit No.		Exhibit
	23.2	Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5).
	25	Statement of Eligibility of Trustee
	99.1	Note Agreement dated as of July 17, 1989, between the ESOP, Consolidated Freightways, Inc. and the Note Purchasers named therein. (Exhibit 28.1 as filed on Form SE dated July 21, 1989*)
	99.2	Guarantee and Agreement dated as of July 17, 1989, delivered by Consolidated Freightways, Inc. (Exhibit 28.2 as filed on Form SE dated July 21, 1989*).
	99.3	Form of Restructured Note Agreement between Consolidated Freightways, Inc., Thrift and Stock Ownership Trust as Issuer and various financial institutions as Purchasers named therein, dated as of November 3, 1992. (Exhibit 28.4 to CNF’s Form 10-K for the year ended December 31, 1992*).
	99.4	Form of Letter of Transmittal
	99.5	Form of Notice of Guaranteed Delivery.
	99.6	Form of Letter to Clients.
	99.7	Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.

*  Previously filed with the Securities and Exchange Commission and incorporated herein by reference.

**	Incorporated by reference to indicated reports filed under the Securities Act of 1934, as amended, by Emery Air Freight Corporation File No. 1-3893.
#	Designates a contract or compensation plan for Management or Directors.

EX-1.1 2 a98854exv1w1.txt EXHIBIT 1.1 EXHIBIT 1.1 $300,000,000 CNF INC. 6.70% SENIOR DEBENTURES DUE 2034 PURCHASE AGREEMENT April 27, 2004 Citigroup Global Markets Inc. Morgan Stanley & Co. Incorporated, As representatives of the Initial Purchasers named in Schedule I hereto, c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: CNF Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the several parties named in Schedule I hereto (the "Initial Purchasers"), for whom you (the "Representatives") are acting as representatives, an aggregate of $300,000,000 principal amount of the Senior Debentures specified above (the "Securities"). 1. The Company represents and warrants to, and agrees with, each of the Initial Purchasers that: (a) A preliminary offering memorandum, dated April 26, 2004 (the "Preliminary Offering Memorandum") and an offering memorandum, dated April 27, 2004 (the "Offering Memorandum"), have been prepared in connection with the offering of the Securities. Any reference to the Preliminary Offering Memorandum or the Offering Memorandum shall also be deemed to refer to, and include, all documents filed with the United States Securities and Exchange Commission (the "Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act"), on or prior to the date of the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, that are incorporated by reference therein; and any reference to the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, as amended or supplemented, as of any specified date, shall be deemed to include any documents filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, and prior to such specified date that are incorporated by reference therein, provided that in any such case is prior to the completion of the distribution of the Securities. All documents filed under the Exchange Act and incorporated by reference in the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be, or any amendment or supplement thereto are hereinafter called the "Exchange Act Reports." The Preliminary Offering Memorandum, on the date thereof, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. On the date hereof and at the Time of Delivery (as defined in Section 4(a) hereof), the Offering Memorandum did not, and will not (and any amendment or supplement thereto, at the date thereof and at the Time of Delivery, will not) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the foregoing representations and warranties shall not apply to statements or omissions in the Preliminary Offering Memorandum or the Offering Memorandum or any amendment or supplement thereto made in reliance upon and in conformity with information furnished to the Company in writing by any Initial Purchaser through either of the Representatives expressly for use therein. (b) The Exchange Act Reports, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further Exchange Act Reports incorporated by reference in the Offering Memorandum, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act, and will not contain an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (c) The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware with corporate power and corporate authority under such laws to own, lease and operate its properties and conduct its business as described in the Offering Memorandum; and the Company is duly qualified to transact business as a foreign corporation and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (d) Each of Con-Way Transportation Services, Inc., Menlo Worldwide, LLC, Menlo Logistics, Inc., and Menlo Worldwide Forwarding, Inc. and (each individually, a "Significant Subsidiary" and collectively, the "Significant Subsidiaries") is a corporation or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with power and authority under such laws to own, lease and operate its properties and conduct its business as described in the Offering Memorandum; and each Significant Subsidiary is duly qualified to transact business as a foreign corporation or limited liability company, as the case may be, and is in good standing in each other jurisdiction in which it owns or leases property of a nature, or transacts business of a type, that would make such 2 qualification necessary, except to the extent that the failure to so qualify or be in good standing would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. All of the outstanding shares of capital stock or other equity interests, as the case may be, of each Significant Subsidiary have been duly authorized and validly issued and are fully paid and, with respect to each Significant Subsidiary that is a corporation, non-assessable and are owned by the Company (except for directors' qualifying shares) or, in the case of Menlo Logistics, Inc. and Menlo Worldwide Forwarding, Inc., by Menlo Worldwide, LLC, free and clear of any pledge, lien, security interest, charge, claim, equity, encumbrance or adverse interest of any kind (except for restrictions on transfer arising under federal or state securities or blue sky laws). (e) None of the subsidiaries of the Company, other than Con-Way Transportation Services, Inc. and Menlo Worldwide, LLC, is a "significant subsidiary," as such term is defined in Rule 1-02(w) of Regulation S-X of the Securities Act. (f) The Securities have been duly authorized and, when issued and delivered pursuant to this Purchase Agreement and authenticated in the manner provided in the Indenture dated as of March 8, 2000 (the "Base Indenture") between the Company and The Bank of New York, as successor in interest to Bank One Trust Company, National Association, as trustee (the "Trustee"), as supplemented by Supplemental Indenture No. 1 to be dated as of the Time of Delivery (the "Supplemental Indenture" and, together with the Base Indenture, the "Indenture"), will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture, under which they are to be issued, enforeceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws relating or affecting creditors' rights generally or by general equitable principals. The Exchange Securities (as defined in paragraph (j) of this Section 1) have been duly authorized for issuance by the Company, and when issued and authenticated in accordance with the terms of the Indenture and the Exchange Offer (defined below) will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company, entitled to the benefits provided by the Indenture, enforceable against the Company in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws relating or affecting creditors' rights generally or by general equitable principals. (g) The Base Indenture has been duly authorized, executed and delivered and constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws relating or affecting creditors' rights generally or by general equitable principals and except as rights to indemnification and contribution may be limited by applicable law or public policy. (h) The Supplemental Indenture has been duly authorized and, when executed and delivered by the Company at the Time of Delivery (assuming the due authorization, 3 execution and delivery thereof by the Trustee), the Supplemental Indenture will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws relating or affecting creditors' rights generally or by general equitable principals and except as rights to indemnification and contribution may be limited by applicable law or public policy. (i) This Agreement has been duly authorized, executed and delivered by the Company. (j) The exchange and registration rights agreement, to be dated as of April 30, 2004 (the "Registration Rights Agreement"), between the Company and the Initial Purchasers, has been duly authorized and, when executed and delivered by the Company (assuming the due authorization, execution and delivery thereof by the Initial Purchasers), the Registration Rights Agreement will constitute a valid and legally binding obligation of the Company, enforceable in accordance with its terms, except to the extent enforceability may be limited by subject to applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, fraudulent transfer or other similar laws relating or affecting creditors' rights generally or by general equitable principals and except as rights to indemnification and contribution under the Registration Rights Agreement may be limited by applicable law or public policy. The Registration Rights Agreement will conform in all material respects to the description thereof contained in the Offering Memorandum and will be in substantially the form previously delivered to you. Pursuant to the Registration Rights Agreement, the Company will agree to file with the Commission, under the circumstances set forth therein, (i) a registration statement under the Securities Act relating to another series of debt securities of the Company with terms substantially identical to the Securities (the "Exchange Securities") to be offered in exchange for the Securities (the "Exchange Offer") and (ii) to the extent required by the Registration Rights Agreement, a shelf registration statement pursuant to Rule 415 of the Securities Act relating to the resale by certain holders of the Securities, and in each case, to use its reasonable best efforts to cause such registration statements to be declared effective. (k) The Securities and the Indenture conform, and the Exchange Securities will conform, as to legal matters in all material respects to the descriptions thereof contained in the Offering Memorandum. (l) The Company had at the date indicated in the Offering Memorandum a duly authorized, issued and outstanding capitalization as set forth in the Offering Memorandum under the caption "Capitalization." All of the outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. (m) The Company is not in violation of its charter or by-laws, and none of the Significant Subsidiaries is in violation of its charter (or, in the case of Menlo Worldwide LLC, limited liability company agreement) or by-laws, except, in each case, for any such violations which, individually and in the aggregate, would not have a material adverse 4 effect on the Company and its subsidiaries, considered as one enterprise, and except as otherwise set forth in the Offering Memorandum, none of the Company or any of the Significant Subsidiaries is in default in the performance or observance of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which it is a party or by which it is bound or to which any of its properties is subject, except for such defaults that would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. The issue and sale of the Securities and the Exchange Securities, the execution, delivery and performance by the Company of this Purchase Agreement, the Securities, the Exchange Securities, the Indenture and the Registration Rights Agreement and the compliance by the Company with all of its obligations under this Purchase Agreement, the Securities, the Exchange Securities, the Indenture and the Registration Rights Agreement and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and do not and will not result in any violation of the charter or by-laws of the Company or any Significant Subsidiary, and do not and will not violate or conflict with, or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of the Significant Subsidiaries under any contract, indenture, mortgage, loan agreement, note, lease or other agreement or instrument to which the Company or any of the Significant Subsidiaries is a party or by which it is bound or to which any of their respective properties are subject or any existing applicable law, rule, regulation, judgment, order or decree of any government, governmental instrumentality or court, domestic or foreign, having jurisdiction over the Company or any of the Significant Subsidiaries or any of their respective properties (except for such violations, conflicts, breaches or defaults or liens, charges or encumbrances that would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise). (n) No authorization, approval, consent or license of any government, governmental instrumentality or court, domestic or foreign (other than under the Securities Act of 1933, as amended (the "Securities Act"), the Exchange Act, the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the securities or blue sky laws of the various states and of foreign jurisdictions) is required for the valid authorization, issuance, sale and delivery of the Securities and the Exchange Securities, for the execution, delivery or performance by the Company of this Purchase Agreement, the Registration Rights Agreement, the Indenture and the Securities and the Exchange Securities or for the consummation by the Company of the transactions contemplated hereby or thereby, except such of the foregoing as will be obtained prior to the Time of Delivery. (o) Except as disclosed in the Offering Memorandum, there is no action, suit or proceeding before or by any government, governmental instrumentality or court, domestic or foreign, now pending or, to the knowledge of the Company, threatened against or affecting, the Company or any of the Significant Subsidiaries or any of their respective officers, as applicable, in their capacity as such, in which there is a reasonable possibility of an adverse decision that would (i) result in any material adverse change in 5 the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, (ii) materially and adversely affect the properties or assets of the Company and its subsidiaries, considered as one enterprise, or (iii) materially and adversely affect the consummation of the transactions contemplated in this Purchase Agreement or the Registration Rights Agreement; the aggregate of all pending legal or governmental proceedings that are not described in the Offering Memorandum to which the Company or any of the Significant Subsidiaries is a party or which affect any of their respective properties and in which there is a reasonable possibility of an adverse decision, including ordinary routine litigation incidental to the business of, the Company or any of its subsidiaries, would not have a material adverse effect on the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise; and there are no contracts or other documents that would be required to be described in a prospectus to a registration statement under the Securities Act that are not described in the Offering Memorandum. (p) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") that is maintained, administered or contributed to by the Company or any of its subsidiaries for employees or former employees of the Company or its subsidiaries has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended, ("Code"), except where the failure to comply would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. No prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption, except where such prohibited transaction would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. For each such plan which is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA no "accumulated funding deficiency" as defined in Section 412 of the Code has been incurred, except where the "accumulated funding deficiency" has been waived by the Internal Revenue Service, and the deficiency would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. There is no reasonable likelihood that the Company or any of its subsidiaries could incur liability under Title IV of ERISA or suffer the imposition of one or more liens under ERISA or the Code with respect to any such plan or other employee benefit plan, except as otherwise disclosed in or contemplated by the Offering Memorandum or except for such liability or lien which would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. With respect to any employee benefit plan that is a multiemployer plan as defined in Section 3(37) of ERISA, or another plan not sponsored by the Company, the representations in this paragraph (n) of Section 1 are made to the best knowledge and belief of the Company. (q) The Company has no knowledge of any actionable violation by the Company or any of its subsidiaries of any federal, state or local law relating to employment and employment practices, discrimination in the hiring, promotion or pay of employees, or any applicable wage or hour laws, which, individually or in the aggregate, 6 would result in a material adverse effect on the Company and its subsidiaries, considered as one enterprise. There is (i) no material unfair labor practice complaint pending or, to the knowledge of the Company, threatened against the Company before the National Labor Relations Board or any state or local labor relations board, nor are any material grievance or arbitration proceedings arising under any collective bargaining agreement pending or, to the knowledge of the Company, threatened against the Company, (ii) no labor strike, dispute, slowdown or stoppage ("Labor Dispute") in which the Company is involved, nor, to the knowledge of the Company, is any Labor Dispute imminent, other than routine disciplinary and grievance matters, and (iii) except as disclosed in or contemplated by the Offering Memorandum, no question concerning union representation within the meaning of the National Labor Relations Act existing with respect to the employees of the Company and, to the knowledge of the Company, no union organizing activities are taking place by employees of the Company or any of its subsidiaries, which, with respect to any matter specified in clauses (i), (ii) or (iii) above, whether considered singly or in the aggregate, would have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (r) KPMG LLP, who reported upon the audited financial statements and related notes included or incorporated by reference in the Offering Memorandum, is an independent public accountant with respect to the Company in accordance with the provisions of the Securities Act and the rules and regulations of the Commission thereunder. (s) The financial statements, together with the related notes and schedules thereto, included or incorporated by reference in the Offering Memorandum present fairly in all material respects the consolidated financial position, results of operations and cash flow of the Company and its subsidiaries at the respective dates and for the respective periods to which they apply; such statements and related notes and schedules thereto have been prepared in accordance with U.S. generally accepted accounting principles consistently applied throughout the periods involved, except as disclosed therein; and the other financial and statistical information and data set forth in the Offering Memorandum in all material respects, present fairly the information purported to be shown thereby at the respective dates or for the respective periods to which they apply and, to the extent that such information is set forth in or has been derived from the financial statements and accounting books and records of the Company, have been prepared on a basis consistent with such financial statements and the books and records of the Company. (t) Since the respective dates as of which information is given in the Offering Memorandum, except as otherwise stated therein or contemplated thereby, there has not been (i) any material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), earnings, business affairs or business prospects of the Company and its subsidiaries, considered as one enterprise, whether or not arising in the ordinary course of business, (ii) any transaction or agreement entered into by the Company, whether or not arising in the ordinary course of business, that is material to the Company and its subsidiaries, considered as one enterprise, (iii) any dividend or distribution of any kind declared, paid or made by the Company on its capital stock, except for regular periodic dividends on its capital stock or 7 on the preferred securities of its subsidiary trust, or (iv) any change in the capital stock or long-term debt of the Company or any of its subsidiaries, except for the issuance of the Company's common stock upon the conversion of the Company's Series B Cumulative Convertible Preferred Stock or upon conversion of the preferred securities of the Company's subsidiary trust, or the issuance of capital stock, options and other securities under existing officer, director or employee benefit plans or upon the exercise of options issued under existing or prior officer, director or employee benefit plans, or the purchase by the Company or any of its subsidiaries of the Company's common stock in connection with its Thrift and Stock Plan in accordance with past practice, and except for changes in long-term debt in the ordinary course of business. (u) The Company and the Significant Subsidiaries each owns, possesses or has obtained all governmental licenses, permits, certificates, consents, orders, approvals and other authorizations necessary to own or lease, as the case may be, and to operate its properties and to carry on its business as presently conducted, and the Company has not received any notice of proceedings relating to revocation or modification of any such licenses, permits, certificates, consents, orders, approvals or authorizations, except in each case for such licenses, permits, certificates, consents, orders, approvals and other authorizations or revocations or modifications thereof which would not have a material adverse effect on the Company and its subsidiaries considered as one enterprise. Each of the Company and the Significant Subsidiaries is in compliance with all laws and regulations relating to the conduct of its business as conducted as of the date of the Offering Memorandum, except where the failure to be in compliance would not have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. (v) The Company is not and, after giving effect to the offering and the sale of the Securities, will not be an "investment company" or a company controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended. (w) Except as would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, considered as one enterprise, and except as otherwise set forth in or contemplated by the Offering Memorandum, (i) none of the Company or any of its subsidiaries is in violation of any federal, state or local laws and regulations relating to pollution or protection of human health or the environment, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of toxic or hazardous substances, materials or wastes, or petroleum and petroleum products ("Materials of Environmental Concern"), or otherwise relating to the protection of human health and safety, or the use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern (collectively, "Environmental Laws"), which violation includes, but is not limited to, noncompliance with, or lack of, any permits or other environmental authorizations, and (ii) (A) none of the Company or any of its subsidiaries has received any communication (written or oral), whether from a governmental authority or otherwise, alleging any such violation or noncompliance, and there are no circumstances, either past, present or that are reasonably foreseeable, that could reasonably be expected to lead to any such violation in the future, (B) there is no pending or, to the knowledge of the Company, threatened claim, action, 8 investigation or notice (written or oral) by any person or entity alleging potential liability for investigatory, cleanup, or governmental response costs, or natural resources or property damages, or personal injuries, attorney's fees or penalties relating to (x) the presence, or release into the environment, of any Materials of Environmental Concern at any location owned or operated by the Company or any of its subsidiaries now or in the past, or (y) circumstances forming the basis of any violation or potential violation, of any Environmental Law (collectively, "Environmental Claims"), and (C) there are no past or present actions, activities, circumstances, conditions, events or incidents that could form the basis of any Environmental Claim against the Company or any of its subsidiaries or against any person or entity for whose acts or omissions the Company or any of its subsidiaries is or may reasonably be expected to be liable, either contractually or by operation of law. In the ordinary course of business, the Company and/or certain of its subsidiaries, as appropriate, have conducted environmental investigations of, and have reviewed reasonably available information regarding, the business, properties and operations of the Company and its subsidiaries, and of other properties within the vicinity of their business, properties and operations, as appropriate for the circumstances of each such property and operation; on the basis of such reviews and investigations, the Company has reasonably concluded that, except as disclosed or contemplated by the Offering Memorandum, any costs and liabilities associated with such matters would not have, singly or in the aggregate, a material adverse effect on the Company and its subsidiaries, considered as one enterprise, or otherwise require disclosure in the Offering Memorandum. (x) No person has the right to require the Company to register any securities for offering and sale under the Securities Act by reason of the issue and sale of the Securities or the filing of a registration statement in connection with the Exchange Offer. (y) The Company and each of the Significant Subsidiaries have timely filed (or have had timely filed on their behalf) all material Tax returns required by applicable law to be filed by them prior to the date hereof (taking into account any properly granted extensions of time to file any Tax returns), and all such Tax returns are true, complete, and correct in all material respects. Except as otherwise stated or described in the Offering Memorandum, the Company and each of the Significant Subsidiaries have paid (or have had paid on their behalf) all material Taxes (as defined below) due or claimed to be due from the Company, other than those (i) currently payable without penalty or interest or (ii) being contested in good faith and by appropriate proceedings. Other than Tax items relating to proposed assessments or Audits (as defined below) which have been disclosed to counsel for the Initial Purchasers or which are set forth or described in the Offering Memorandum, there are no other Tax items that are currently under examination by any Tax Authority (as defined below) or, to the best knowledge of the Company, that could result in a proposed deficiency if examined by a Tax Authority in respect of which there is a reasonable possibility of a determination that would be adverse to the Company and that would have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. For purposes of this paragraph (w) of Section 1: 9 "Taxes" shall mean all federal, state, local and foreign taxes, and other assessments of a similar nature, whether imposed directly or through withholding, including any interest, additions to tax or penalties applicable thereto. "Audit" shall mean any audit, assessment of Taxes, other examination by any tax authority, proceeding or appeal of such proceeding relating to Taxes. "Tax Authority" means the Internal Revenue Service and any other domestic or foreign governmental authority responsible for the administration of any Taxes. (z) None of the Company or any of the Significant Subsidiaries has taken or will take, directly or indirectly, any action designed to, or that might be reasonably expected to, cause or result in stabilization or manipulation of the price of the Securities. (aa) Any certificate signed by any officer of the Company and delivered to you or your counsel on or after the date of this Purchase Agreement shall be deemed a representation and warranty by the Company to you as to the matters covered thereby. (bb) When the Securities are issued and delivered pursuant to this Purchase Agreement, the Securities will not be of the same class (within the meaning of Rule 144A under the Securities Act) as securities which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system. (cc) The Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act. (dd) It is not necessary, in connection with the offer, sale and delivery of the Securities to the Initial Purchasers under this Purchase Agreement or in connection with the offer, initial resale and delivery of the Securities by the Initial Purchasers in the manner contemplated by this Purchase Agreement and the Offering Memorandum, to register the Securities under the Securities Act or to qualify the Indenture under the Trust Indenture Act, assuming that the Initial Purchasers have not and will not breach Section 3 of this Purchase Agreement. (ee) Assuming compliance with the representations made by the Initial Purchasers in Section 3 hereof, (i) neither the Company nor any person acting on its behalf has offered or sold the Securities by means of any general solicitation or general advertising within the meaning of Rule 502(c) under the Securities Act or, with respect to Securities sold outside the United States to non-U.S. persons (as defined in Rule 902 under the Securities Act), by means of any directed selling efforts within the meaning of Rule 902 under the Securities Act and (ii) the Company, any affiliate of the Company and any person acting on its or their behalf has complied with and will implement the "offering restriction" within the meaning of such Rule 902. 10 (ff) Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has offered or sold to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities offered or sold to the Initial Purchasers hereunder. The Company will take reasonable precautions designed to insure that any offer or sale, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Securities Act) of any Securities or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to the Company by the Representatives), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Purchase Agreement as transactions exempt from the registration provisions of the Securities Act. (gg) There is and has been no failure on the part of the Company or, to the knowledge of the Company, and any of the Company's directors or officers, in their capacities as such, to comply with any applicable provision of the Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the "Sarbanes Oxley Act") that are currently effective, including Section 402 related to loans and Sections 302 and 906 related to certifications, other than any such failure that would not reasonably be expected to have a material adverse effect on the Company and its subsidiaries, considered as one enterprise. 2. Subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Initial Purchasers, and each of the Initial Purchasers agrees, severally and not jointly, to purchase from the Company, at a purchase price of 96.654% of the principal amount thereof, plus accrued interest, if any, from April 30, 2004 to the Time of Delivery hereunder, the principal amount of Securities set forth opposite the name of such Initial Purchaser in Schedule I hereto. 3. Upon the authorization by you of the release of the Securities, the several Initial Purchasers propose to offer the Securities for sale upon the terms and conditions set forth in this Purchase Agreement and the Offering Memorandum and each Initial Purchaser hereby represents and warrants to, and agrees with the Company that: (a) It will offer and sell the Securities only to: (i) persons who it reasonably believes are "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the Securities Act in transactions meeting the requirements of Rule 144A; or (ii) in the case of offers or sales outside the United States, to persons other than U.S. persons ("Non-U.S. Persons," which term shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for foreign beneficial owners (other than an estate or trust)) in reliance on Regulation S; (b) It is an "Accredited Investor" of the sort specified in clauses (1), (2), (3) or (7) in Rule 501 (a) of Regulation D under the Securities Act; 11 (c) It will not offer or sell the Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Securities Act; (d) Each Initial Purchaser understands that the Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Securities Act or pursuant to an exemption from the registration requirements of the Securities Act. Each Initial Purchaser severally represents and agrees that, except as permitted by Section 4(a) above, it has offered and sold the Securities and will offer and sell the Securities (i) as part of its distribution at any time and (ii) otherwise until forty days after the later of the date upon which the offering of the Securities commences and the Time of Delivery, only in accordance with Rule 903 of Regulation S. Accordingly, neither the Initial Purchasers, their affiliates nor any persons acting on their behalf have engaged or will engage in any directed selling efforts with respect to Securities sold hereunder pursuant to Regulation S, and the Initial Purchasers, their affiliates and any person acting on their behalf have complied and will comply with the offering restriction requirements of Regulation S. Each Initial Purchaser severally agrees that, at or prior to confirmation of a sale of Securities pursuant to Regulation S it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases such Securities from it during the restricted period a confirmation or notice to substantially the following effect: "The securities covered hereby have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the final closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meaning given to them by Regulation S." (e) It has not offered or sold and, prior to the expiry of a period of six months from the Time of Delivery, will not offer or sell any Securities included in this offering to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (f) It has only communicated and caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of any 12 Securities included in this offering in circumstances in which section 21(1) of the FSMA does not apply to us; and (g) It has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities included in this offering in, from or otherwise involving the United Kingdom. 4. (a) The Securities to be purchased by each Initial Purchaser hereunder will be represented by one or more definitive global Securities in book-entry form which will be deposited by or on behalf of the Company with The Depository Trust Company ("DTC") or its designated custodian. The Company will deliver the Securities to the Representatives. for the account of each Initial Purchaser, against payment by or on behalf of such Initial Purchaser of the purchase price therefor by wire transfer in Federal (same day) funds, by causing DTC to credit the Securities to the account of the Representatives. at DTC. The Company will cause the certificates representing the Securities to be made available to the Representatives for checking at least twenty-four hours prior to the Time of Delivery (as defined below) at the office of DTC or its designated custodian (the "Designated Office"). The time and date of such delivery and payment shall be 9:30 a.m., New York City time, on April 30, 2004 or such other time and date as the Representatives and the Company may agree upon in writing. Such time and date are herein called the "Time of Delivery". (b) The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross-receipt for the Securities and any additional documents requested by the Initial Purchasers pursuant to Section 7 hereof, will be delivered at such time and date at the offices of Mayer, Brown, Rowe & Maw LLP, 190 South LaSalle Street, Chicago, Illinois 60603 (the "Closing Location"), and the Securities will be delivered at the Designated Office, all at the Time of Delivery. A meeting will be held at the Closing Location on the New York Business Day next preceding the Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close. 5. The Company agrees with each of the Initial Purchasers: (a) The Company will not amend or supplement the Offering Memorandum without the prior written consent of the Representatives, which consent shall not be unreasonably withheld; (b) The Company will cooperate with the Initial Purchasers in endeavoring to qualify the Securities for sale under the securities laws of such jurisdictions as the Initial Purchasers may reasonably have designated in writing and will make such applications, file such documents and furnish such information as may be reasonably required for that purpose; provided that the Company shall not be required to qualify as a foreign 13 corporation or to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent. The Company will, from time to time, prepare and file such statements, reports and other documents, as are or may be required to continue such qualifications in effect for so long a period as the Representatives may reasonably request for distribution of the Securities; (c) To furnish the Initial Purchasers with copies of the Offering Memorandum and each amendment or supplement thereto and additional written and electronic copies thereof in such quantities as you may from time to time reasonably request. If at any time prior to the date on which all of the Securities shall have been sold by the Initial Purchasers, any event shall occur as a result of which, in the judgment of the Company or in the reasonable opinion of counsel to the Representatives, it becomes necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or, if it is necessary at any time to amend or supplement the Offering Memorandum to comply with applicable law, the Company promptly will prepare an appropriate amendment or supplement to the Offering Memorandum so that the Offering Memorandum as so amended or supplemented will not contain statements that, in light of the circumstances under which they were made, are misleading, or so that the Offering Memorandum will comply with applicable law. We will prepare and furnish without charge to each Initial Purchaser and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Offering Memorandum or a supplement to the Offering Memorandum which will correct such statement or omission or affect such compliance; (d) During the period beginning from the date hereof and continuing until the date six months after the Time of Delivery, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder and the Registration Rights Agreement, any securities of the Company that are substantially similar to the Securities; (e) Not to be or become, at any time prior to the expiration of three years after the Time of Delivery, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act; (f) At any time when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of securities information (the "Additional Issuer Information") satisfying the requirements of subsection (d)(4) of Rule 144A under the Securities Act; (g) If not otherwise available on the Commission's Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system, to furnish to the holders of the Securities as soon as practicable after the end of each fiscal year an annual report (including a balance sheet and statements of income, stockholders' equity and cash flows of the Company and its consolidated subsidiaries certified by independent public accountants) and, as soon as practicable after the end of each of the first three quarters of each fiscal year (beginning 14 with the fiscal quarter ending after the date of the Offering Memorandum), to make available consolidated summary financial information of the Company and its subsidiaries for such quarter in reasonable detail; (h) During a period of one year from the date of the Offering Memorandum, to furnish to you, if not available on EDGAR or the Company's website, copies of all reports or other communications (financial or other) furnished to stockholders of the Company, and to deliver to you as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any securities exchange on which the Securities or any class of securities of the Company is listed; and to the extent consistent with Regulation FD under the Securities Act and to the extent that such additional information has been made available to the stockholders of the Company, such additional information concerning the business and financial condition of the Company as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its stockholders generally or to the Commission); (i) During the period of two years after the Time of Delivery, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144 under the Securities Act) to, resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them; (j) The Company will cooperate with the Representatives and use its reasonable best efforts to permit the Securities to be eligible for clearance and settlement through The Depository Trust Company and, if necessary, Euroclear and Clearstream Banking and Euroclear Bank S.A./N.V.; (k) To use the net proceeds received by it from the sale of the Securities pursuant to this Purchase Agreement in the manner specified in the Offering Memorandum under the caption "Use of Proceeds". 6. The Company covenants and agrees with the several Initial Purchasers that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the issue of the Securities and all other expenses in connection with the preparation, printing and filing of the Preliminary Offering Memorandum and the Offering Memorandum and any amendments and supplements thereto and the mailing and delivering of copies thereof to the Initial Purchasers and dealers; (ii) the cost of printing or producing any agreement among the Initial Purchasers, this Purchase Agreement, the Indenture, the Registration Rights Agreement, the blue sky and legal investment memoranda, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities and the Exchange Securities for offering and sale under state securities laws as provided in Section 5(b) hereof, including the reasonable fees and disbursements of counsel for the Initial Purchasers in connection with such qualification and in connection with the blue sky and legal investment surveys; (iv) any fees charged by securities rating services for rating the Securities and the Exchange Securities; (v) the cost of preparing the Securities and the Exchange Securities; (vi) the fees and expenses of the Trustee and any agent 15 of the Trustee and the reasonable fees and disbursements of counsel for the Trustee in connection with the Indenture, the Securities and the Exchange Securities; (vii) any cost incurred in connection with the designation of the Securities for trading in PORTAL; and (viii) all other reasonable costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 8 and 11 hereof, the Initial Purchasers will pay all of their own costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the Securities by them, and any advertising expenses connected with any offers they may make. 7. The obligations of the Initial Purchasers hereunder shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of the Time of Delivery, true and correct in all material respects, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed in all material respects, and the following additional conditions: (a) Mayer, Brown, Rowe & Maw LLP, counsel for the Initial Purchasers, shall have furnished to you such opinion or opinions, dated the Time of Delivery, in form and substance reasonably satisfactory to the Initial Purchasers, with respect to the issuance and sale of the Securities, the Indenture, the Registration Rights Agreement, the Offering Memorandum and other related matters as the Initial Purchasers may reasonably require, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (b) Skadden, Arps, Slate, Meager & Flow LLP, counsel for the Company, shall have furnished to you their written opinion, dated the Time of Delivery, in form and substance satisfactory to you and in substantially the form attached hereto as Annex A, and the Company's General Counsel shall have furnished to you his written opinion, dated the Time of Delivery, in form and substance satisfactory to you and in substantially the form attached hereto as Annex B; (c) On the date of the Offering Memorandum prior to the execution of this Purchase Agreement and also at the Time of Delivery, KPMG LLP shall have furnished to you letters, dated the respective dates of delivery thereof, in form and substance reasonably satisfactory to the Representatives of the type described in AICPA Statement on Auditing Standards No. 72; (d) (i) Since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, except as otherwise set forth in or contemplated by the Offering Memorandum, there shall not have been any material adverse change, or any development involving a prospective material adverse change, in or affecting the condition, financial or otherwise, or in the earnings, affairs or business prospects, whether or not arising in the ordinary course of business, of the Company and its subsidiaries, taken as a whole, from that described in the Offering Memorandum, (ii) since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum and except as contemplated therein there shall not have been any material adverse change, or any development involving a prospective material adverse change, in the capital stock or the long-term debt of the Company from 16 that set forth in the Offering Memorandum, (iii) the Company shall have no liability or obligation, direct or contingent, which is material to the Company and its subsidiaries, taken as a whole, other than those reflected in or contemplated by the Offering Memorandum and (iv) since the date of the latest audited financial statements included or incorporated by reference in the Offering Memorandum, the Company has not sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Offering Memorandum, the effect of which, in any such case described in clause (i), (ii), (iii) or (iv), is in the judgment of the Representatives so material and adverse as to make it impracticable or in inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in this Purchase Agreement and in the Offering Memorandum; (e) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company's debt securities by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities; (f) At the Time of Delivery, the Securities shall have a rating of at least Baa3 from Moody's Investors Service, Inc. and at least BBB- from Standard & Poor's Corporation as evidenced in writing from such rating agencies or by other evidence reasonably satisfactory to the Representatives; and (g) The Company shall have furnished or caused to be furnished to you at the Time of Delivery certificates of officers of the Company reasonably satisfactory to you as to the accuracy in all material respects of the representations and warranties of the Company herein at and as of such Time of Delivery, as to the performance by the Company in all material respects of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (d) and (e) of this Section and as to such other matters as you may reasonably request. If any of the conditions specified in this Section 7 shall not have been fulfilled in all material respects when and as provided in this Purchase Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Purchase Agreement shall not be in all material respects reasonably satisfactory in form and substance to the Initial Purchasers and counsel for the Initial Purchasers, this Purchase Agreement and all obligations of the Initial Purchasers hereunder may be cancelled at, or at any time prior to, the Time of Delivery by the Initial Purchasers. Notice of such cancellation shall be given to the Company in writing or by telephone or facsimile confirmed in writing. 8. (a) The Company will indemnify and hold harmless each Initial Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Initial Purchaser may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any 17 Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and will reimburse each Initial Purchaser for any legal or other expenses reasonably incurred by such Initial Purchaser in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any Preliminary Offering Memorandum or the Offering Memorandum or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by any Initial Purchaser through either of the Representatives expressly for use therein. (b) Each Initial Purchaser will, severally and not jointly, indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Offering Memorandum or the Offering Memorandum, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Offering Memorandum or the Offering Memorandum or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company by such Initial Purchaser through the Representatives expressly for use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof. No indemnification provided for in Section 8(a) or (b) shall be available to any party who shall fail to give notice as provided in this Section 8(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which it or they may have to the indemnified party for contribution or otherwise than on account of the provisions of Section 8(a) or (b). In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, 18 except with the written consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Initial Purchasers on the other from the offering of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Initial Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Initial Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Initial Purchasers, in each case as set forth in the Offering Memorandum. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Initial Purchasers on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Initial Purchasers agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Initial Purchasers were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in 19 connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Initial Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to investors were offered to investors exceeds the amount of any damages which such Initial Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Initial Purchasers' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) The obligations of the Company under this Section 8 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Initial Purchaser within the meaning of the Securities Act; and the obligations of the Initial Purchasers under this Section 8 shall be in addition to any liability which the respective Initial Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company and to each person, if any, who controls the Company within the meaning of the Securities Act. 9. (a) If any Purchaser shall default in its obligation to purchase the Securities which it has agreed to purchase hereunder, you may in your discretion arrange for you or another party or other parties to purchase such Securities on the terms contained herein. If within thirty-six hours after such default by any Purchaser you do not arrange for the purchase of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to you to purchase such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Securities, or the Company notifies you that it has so arranged for the purchase of such Securities, you or the Company shall have the right to postpone the Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Offering Memorandum, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments to the Offering Memorandum which may thereby be made necessary. The term "Purchaser" as used in this Purchase Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Purchase Agreement with respect to such Securities. (b) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unpurchased does not exceed one-eleventh of the aggregate principal amount of all the Securities, then the Company shall have the right to require each non-defaulting Purchaser to purchase the principal amount of Securities which such Purchaser agreed to purchase hereunder and, in addition, to require each non-defaulting Purchaser to purchase its pro rata share (based on the principal amount of Securities which such Purchaser agreed to purchase hereunder) of the Securities of such defaulting Purchaser or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default. 20 (c) If, after giving effect to any arrangements for the purchase of the Securities of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of Securities which remains unpurchased exceeds one-eleventh of the aggregate principal amount of all the Securities, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Purchasers to purchase Securities of a defaulting Purchaser or Purchasers, then this Purchase Agreement shall thereupon terminate, without liability on the part of any non-defaulting Purchaser or the Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser from liability for its default. 10. This Agreement may be terminated at, or at any time prior to, the Time of Delivery by the Representatives with written notice to the Company, if any of the following has occurred: (a) a suspension or material limitation in trading in securities generally on the New York Stock Exchange; (b) a suspension or material limitation in trading in the Company's securities on the New York Stock Exchange; (c) a general moratorium on commercial banking activities declared by either Federal or New York State authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States; (d) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war or other crisis or calamity, if the effect of any such event specified in this clause (d) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Offering Memorandum; or (e) the occurrence of any material adverse change in the existing, financial, political or economic conditions in the United States or elsewhere which, in the judgment of the Representatives, would materially and adversely affect the financial markets or the markets for the Securities and other debt securities. 11. The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Initial Purchasers, as set forth in this Purchase Agreement or made by or on behalf of them, respectively, pursuant to this Purchase Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Initial Purchaser or any controlling person of any Initial Purchaser, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Securities. 12. If this Purchase Agreement shall be terminated pursuant to Section 9 or Section 10(a), (c), (d) or (e) hereof, the Company shall not then be under any liability to any Purchaser except as provided in Sections 6 and 8 hereof; but, if for any other reason, the Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Purchasers through you for all out-of-pocket expenses approved in writing by you, including the reasonable fees and disbursements of counsel, reasonably incurred by the Purchasers in making preparations for the purchase, sale and delivery of the Securities, but the Company shall then be under no further liability to any Purchaser except as provided in Sections 6 and 8 hereof. 13. In all dealings hereunder, you shall act on behalf of each of the Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or 21 agreement on behalf of any Purchaser made or given by you jointly or by either Citigroup Global Markets Inc. or Morgan Stanley & Co. Incorporated. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Initial Purchasers shall be delivered or sent by mail, telex or facsimile transmission to you as the Representatives in care of both Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013, Attention: Registration Department, and Morgan Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10005, Attention: General Counsel; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Offering Memorandum, Attention: Assistant Secretary, with a copy to the General Counsel at the same address. 14. This Purchase Agreement shall be binding upon, and inure solely to the benefit of, the Initial Purchasers, the Company and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and each person who controls the Company or any Initial Purchaser, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Purchase Agreement. No purchaser of any of the Securities from any Initial Purchaser shall be deemed a successor or assign by reason merely of such purchase. 15. Time shall be of the essence of this Purchase Agreement. 16. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State of New York. 17. This Purchase Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 18. The Company is authorized, subject to applicable law, to disclose any and all aspects of this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transaction, without the Purchasers imposing any limitation of any kind. 22 If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between each of the Initial Purchasers and the Company. It is understood that your acceptance of this letter on behalf of each of the Initial Purchasers is pursuant to the authority set forth in a form of Agreement among Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof (other than yourselves). Very truly yours, CNF INC. By:___________________________________ Name: Mark C. Thickpenny Title: Vice President and Treasurer Accepted as of the date hereof: CITIGROUP GLOBAL MARKETS INC. MORGAN STANLEY & CO. INCORPORATED BY: CITIGROUP GLOBAL MARKETS INC. By:________________________ Name: Stephen H. Woo Title: Vice President SCHEDULE I

Principal Amount of Firm Initial Purchasers Securities to be Purchased ------------------ -------------------------- Citigroup Capital Markets Inc...................... US $ 135,000,000 Morgan Stanley & Co. Incorporated.................. $ 135,000,000 ABN AMRO Incorporated.............................. $ 7,500,000 Banc of America Securities LLC..................... $ 7,500,000 J.P. Morgan Securities Inc......................... $ 7,500,000 PNC Capital Markets, Inc........................... $ 7,500,000 Total.................................... U.S. $ 300,000,000 ==============

EX-4.2 3 a98854exv4w2.txt EXHIBIT 4.2 EXHIBIT 4.2 CNF INC. SUPPLEMENTAL INDENTURE NO. 1 $300,000,000 6.70% Senior Debentures due 2034 THIS SUPPLEMENTAL INDENTURE NO. 1, dated as of April 30, 2004 (the "Supplemental Indenture"), between CNF INC. (formerly known as CNF Transportation Inc.), a Delaware corporation (the "Company"), and The Bank of New York, a New York banking corporation, as successor to Bank One Trust Company, National Association, as trustee (the "Trustee"). RECITALS OF THE COMPANY: WHEREAS, the Company has heretofore executed and delivered to the Trustee an Indenture, dated as of March 8, 2000 (the "Base Indenture" and, as supplemented by this Supplemental Indenture, the "Indenture"), providing for the issuance from time to time of one or more series of Securities; WHEREAS, Section 901(4) of the Indenture provides that the Company and the Trustee may enter into an indenture supplemental to the Indenture to establish the form or terms of Securities of any series as permitted by Sections 201 and 301 of the Indenture; and WHEREAS, all the conditions and requirements necessary to make this Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed, have been performed and fulfilled. NOW THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: For and in consideration of the premises and the issuance of the series of Securities provided for herein, the Company and the Trustee mutually covenant and agree for the equal and proportionate benefit of the Holders of the Securities of such series as follows: ARTICLE One RELATION TO INDENTURE; DEFINITIONS; RULES OF CONSTRUCTION SECTION 1.1 Relation to Indenture. This Supplemental Indenture constitutes an integral part of the Indenture. This Supplemental Indenture shall only apply to the series of Securities issued pursuant hereto and shall not apply to any other series of securities issued pursuant to the Base Indenture. SECTION 1.2 Definitions. For all purposes of this Supplemental Indenture, the following terms shall have the respective meanings set forth in this Section. "Additional Interest" has the meaning set forth in Section 2(c) of the Registration Agreement. "Additional Securities" has the meaning set forth in Section 2.1(b) hereof. "Applicable Procedures" means, with respect to any transfer or transaction involving a Regulation S Global Security or beneficial interest therein, the rules and procedures of the Depositary for such Regulation S Global Security, to the extent applicable to such transaction and as in effect from time to time. "Clearstream" means Clearstream Banking, societe anonyme, Luxembourg, or its successors, as operator of the Clearstream System. "Definitive Security" means a certificated Security that does not include the Global Securities Legend. "Depositary" means The Depository Trust Company, its nominees and their respective successors. "Euroclear" means Euroclear Bank S.A./N.V., or its successors, as operator of the Euroclear System. "Exchange Securities" means the 6.70% Series B Senior Debentures due May 1, 2034, identical in all respects to the Initial Securities, except for references to series and not containing the Restricted Securities Legend. "Global Securities" has the meaning set forth in Section 2.2(b) hereof. "Global Securities Legend" means the legend set forth under that caption in Exhibit A to this Supplemental Indenture. "IAI" means an institutional "accredited investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is not a QIB. "IAI Global Securities" has the meaning set forth in Section 2.2(b). "IAI Securities" means all Initial Securities held by an IAI. "Initial Purchasers" means Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc of America Securities LLC, J.P. Morgan Securities Inc. and PNC Capital Markets, Inc. "Initial Securities" means the 6.70% Series A Senior Debentures due May 1, 2034, issued under the Indenture, that contain the Restricted Securities Legend. "Original Issue Date" of any Security (or portion thereof) means the date of first issuance of such Security under the Indenture. -2- "Participant" means members of, or participants in, the Depositary, Euroclear, Clearstream, as applicable, and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream. "Private Exchange" means an offer by the Company, pursuant to the Registration Agreement, to issue and deliver to certain purchasers, in exchange for the Initial Securities held by such purchasers as part of their initial distribution, a like aggregate principal amount of Private Exchange Securities. "Private Exchange Securities" means the 6.70% Series C Senior Debentures due May 1, 2034, identical in all respects to the Initial Securities, except for references to series, issued in exchange for Initial Securities pursuant to the Indenture in connection with the Private Exchange pursuant to the Registration Agreement. "Purchase Agreement" means the Purchase Agreement dated April 27, 2004, between the Company and the Initial Purchasers. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registered Exchange Offer" means the offer by the Company, pursuant to the Registration Agreement, to certain Holders of Initial Securities, to issue and deliver to such Holders, in exchange for their Initial Securities, a like aggregate principal amount of Exchange Securities registered under the Securities Act. "Registration Agreement" means the Exchange and Registration Rights Agreement, dated April 30, 2004, between the Company and the Initial Purchasers. "Registration Default" has the meaning set forth in Section 2(c) of the Registration Agreement. "Regulation S" means Regulation S under the Securities Act. "Regulation S Global Security" has the meaning set forth in Section 2.2(b) hereof. "Regulation S Securities" means all Initial Securities offered and sold outside the United States in reliance on Regulation S. "Restricted Period" with respect to any Securities means the period of 40 consecutive days beginning on and including the later of (i) the day on which such Securities are first offered to persons other than distributors (as defined in Regulation S under the Securities Act) in reliance on Regulation S and (ii) the Original Issue Date with respect to such Securities. "Restricted Securities Legend" means the legend set forth in Section 2.3(e)(i) hereof. "Rule 144A" means Rule 144A under the Securities Act. -3- "Rule 144A Global Security" has the meaning set forth in Section 2.2(b) hereof. "Rule 144A Securities" means all Initial Securities offered and sold to QIBs in reliance on Rule 144A. "Securities Act" means the Securities Act of 1933, as amended. "Securities" means the Initial Securities, the Exchange Securities, the Additional Securities and the Private Exchange Securities; provided, however, that the Initial Securities, the Exchange Securities, the Additional Securities, if any, and the Private Exchange Securities, if any, shall be treated as one series for all purposes under the Indenture. "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depositary) or any successor person thereto, who initially will be the Trustee. "Shelf Registration Statement" means a registration statement filed by the Company in connection with the offer and sale of the Initial Securities or Private Exchange Securities pursuant to Section 2(b) of the Registration Agreement. "Transfer Restricted Securities" means any Definitive Securities and any other Securities that bear or are required to bear the Restricted Securities Legend. SECTION 1.3 Rules of Construction. For all purposes of this Supplemental Indenture: (a) capitalized terms used herein without definition shall have the meanings specified in the Base Indenture; (b) all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of this Supplemental Indenture; (c) the terms "herein," "hereof,' "hereunder" and other words of similar import refer to this Supplemental Indenture; and (d) in the event of a conflict with the terms or definitions in the Base Indenture, the terms and definitions in this Supplemental Indenture shall control. ARTICLE TWO TERMS OF THE SECURITIES SECTION 2.1 Establishment of Terms of the Securities. There is hereby established a series of Securities of the Company for issuance under the Indenture. The Securities shall have the terms set forth in the Base Indenture, as modified by the terms set forth in this Article Two of this Supplemental Indenture. (a) Title of the series of Securities: 6.70% Senior Debentures due May 1, 2034. -4- (b) The Securities will be initially issued in an aggregate principal amount of $300,000,000 (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities pursuant to Sections 304, 305, 306 and 905 of the Base Indenture and Section 2.3 hereof of the Supplemental Indenture or pursuant to and in accordance with the terms of the Registration Agreement); provided, that the Company may, without the consent of holders of the then outstanding Securities, issue additional Securities having the same ranking and the same interest rate, maturity and other terms as the Securities, which additional Securities will constitute a single series of Securities under the Indenture (any such Securities, the "Additional Securities"). (c) The Securities shall be issued only as Registered Securities. (d) The Securities shall be issued only in global form, except as otherwise expressly provided in the Indenture. (e) The Securities are not subject to any mandatory redemption or repurchase by the Company or any sinking fund. (f) The Securities are redeemable at the option of the Company in the manner and on the terms set forth in the Indenture and Sections 2 and 3 of the Securities. (g) The Securities are not convertible into or exchangeable for common stock or other securities of the Company. (h) The amount of payments or principal of or premium, if any, with respect to the Securities shall not be determined with reference to an index, formula or other method. (i) The Company will not pay Additional Amounts on the Securities. SECTION 2.2 Form and Dating of the Securities. (a) General. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Securities may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Security shall be dated the date of its authentication. The terms and provisions contained in the Securities set forth in Exhibit A shall constitute, and are hereby expressly made, a part of this Supplemental Indenture, and the Company and the Trustee, by their execution and delivery of this Supplemental Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Security conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Initial Securities issued on the date hereof will be (i) offered and sold by the Company pursuant to the Purchase Agreement and (ii) resold by the Initial Purchasers initially only to (A) QIBs in reliance on Rule 144A and (B) Persons other than U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such Initial Securities may thereafter be -5- transferred to, among others, QIBs, purchasers in reliance on Regulation S and, except as set forth below, IAIs in accordance with Rule 501. The Company hereby designates The Depository Trust Company as the initial Depositary for the Global Securities. (b) Global Securities with Restricted Securities Legend. The Rule 144A Securities shall be issued initially in the form of one or more permanent global Securities in definitive, fully registered form (collectively, the "Rule 144A Global Security") and the Regulation S Securities shall be issued initially in the form of one or more global Securities (collectively, the "Regulation S Global Security"), in each case without interest coupons and bearing the Global Securities Legend and the Restricted Securities Legend, which shall be deposited on behalf of the purchasers of the Securities represented thereby with the Securities Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in the Indenture. One or more global securities in definitive, fully registered form without interest coupons and bearing the Global Securities Legend and the Restricted Securities Legend (collectively, the "IAI Global Security") shall also be issued on the date of this Supplemental Indenture, deposited with the Securities Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as provided in the Indenture to accommodate transfers of beneficial interests in the Securities to IAIs subsequent to the initial distribution. Beneficial ownership interests in the Regulation S Global Security shall not be exchangeable for interests in the Rule 144A Global Security, the IAI Global Security or any other Security without a Restricted Securities Legend until the expiration of the Restricted Period. The Rule 144A Global Security, the IAI Global Security and the Regulation S Global Security are each referred to herein as a "Global Security" and are collectively referred to herein as "Global Securities." The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided. (c) Book-Entry Provisions for Securities with Restricted Securities Legend. This Section 2.2(c) shall apply only to a Global Security deposited with or on behalf of the Depositary. The Company shall execute and the Trustee shall, in accordance with this Section 2.2(c) and pursuant to an order of the Company, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of the Depositary for such Global Security or Global Securities or the nominee of such Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions or held by the Securities Custodian. Participants shall have no rights under the Indenture with respect to any Global Security held on their behalf by the Depositary or by the Securities Custodian or under such Global Security, and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Participants, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security. (d) Definitive Securities with Restricted Securities Legend. Except as provided in Section 2.4, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of Definitive Securities. SECTION 2.3 Transfer and Exchange. The provisions of this Section 2.3 shall apply only to transfer restricted Securities. All other transfers and exchanges shall be governed by Section 305 of the Base Indenture. (a) Transfer and Exchange of Definitive Securities. When Definitive Securities with Restricted Securities Legend are presented to the Registrar with a request: (i) to register the transfer of such Definitive Securities; or (ii) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Securities surrendered for transfer or exchange: (A) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and (B) are accompanied by the following additional information and documents, as applicable: (1) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Initial Security); or (2) if such Definitive Securities are being transferred to the Company, a certification to that effect (in the form set forth on the reverse side of the Initial Security); and (C) if such Definitive Securities are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect (in the form set forth on the reverse side of the Security) and (ii) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 2.3(e)(i). (b) Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security. A Definitive Security with a Restricted Securities Legend may not be -7- exchanged for a beneficial interest in a Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, together with: (i) certification (in the form set forth on the reverse side of the Initial Security) that such Definitive Security is being transferred (A) to a QIB in accordance with Rule 144A, (B) to an IAI that has furnished to the Trustee a signed letter substantially in the form of Exhibit B, (C) outside the United States in an offshore transaction within the meaning of Regulation S and in compliance with Rule 904 under the Securities Act or (D) pursuant to registration under the Securities Act; and (ii) written instructions directing the Trustee to make, or to direct the Securities Custodian to make, an adjustment on its books and records with respect to such Global Security to reflect an increase in the aggregate principal amount of the Securities represented by the Global Security, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the Securities Custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the Securities Custodian, the aggregate principal amount of Securities represented by the Global Security to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Security equal to the principal amount of the Definitive Security so canceled. If no Global Securities are then outstanding and the Global Security has not been previously exchanged for certificated securities pursuant to Section 2.4, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate, a new Global Security in the appropriate principal amount. (c) Transfer and Exchange of Global Securities. (i) The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depositary, in accordance with the Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depositary's procedures containing information regarding the Participant account of the Depositary to be credited with a beneficial interest in such Global Security or another Global Security and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Security and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred. Transfers by an owner of a beneficial interest in a Rule 144A Global Security or an IAI Global Security to a transferee who takes delivery of such interest through a Regulation S Global Security, whether before or after the expiration of the Restricted Period, shall be made only upon receipt by the Trustee of a certification from the transferor to the effect that such transfer is being made in accordance with Regulation S or (if available) Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of -8- the Restricted Period, the interest transferred shall be held immediately thereafter through Euroclear or Clearstream. In the case of a transfer of a beneficial interest in either a Regulation S Global Security or a Rule 144A Global Security for an interest in an IAI Global Security, the transferee must furnish a signed letter substantially in the form of Exhibit B to the Trustee. (ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Security from which such interest is being transferred. (iii) Notwithstanding any other provisions of this Supplemental Indenture (other than the provisions set forth in Section 2.4), a Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. (iv) In the event that a Global Security is exchanged for Definitive Securities pursuant to Section 2.4 prior to the consummation of the Registered Exchange Offer or the effectiveness of the Shelf Registration Statement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Securities intended to ensure that such transfers comply with Rule 144A, Regulation S or such other applicable exemption from registration under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Company. (d) Restrictions on Transfer of Regulation S Global Security. (i) Prior to the expiration of the Restricted Period, interests in a Regulation S Global Security may only be held through Euroclear or Clearstream. During the Restricted Period, beneficial ownership interests in a Regulation S Global Security may only be sold, pledged or transferred through Euroclear or Clearstream in accordance with the Applicable Procedures and only (A) to the Company, (B) so long as such security is eligible for resale pursuant to Rule 144A, to a person whom the selling holder reasonably believes is a QIB that purchases for its own account or for the account of a QIB to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A, (C) in an offshore transaction in accordance with Regulation S, (D) pursuant to an exemption from registration under the Securities Act provided by Rule 144 (if applicable) under the Securities Act, (E) to an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of Securities of $250,000 or (F) pursuant to an effective registration statement under the Securities Act, in each case in accordance with any applicable securities laws of any state of the United States. Prior to the -9- expiration of the Restricted Period, transfers by an owner of a beneficial interest in a Regulation S Global Security to a transferee who takes delivery of such interest through a Rule 144A Global Security or a IAI Global Security shall be made only in accordance with the Applicable Procedures and upon receipt by the Trustee of a written certification from the transferor of the beneficial interest in the form provided on the reverse of the Initial Security to the effect that such transfer is being made to (i) a person whom the transferor reasonably believes is a QIB within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A or (ii) an IAI purchasing for its own account, or for the account of such an IAI, in a minimum principal amount of the Securities of $250,000. Such written certification shall no longer be required after the expiration of the Restricted Period. In the case of a transfer of a beneficial interest in a Regulation S Global Security for an interest in a IAI Global Security, the transferee must furnish a signed letter substantially in the form of Exhibit B to the Trustee. (ii) Upon the expiration of the Restricted Period, beneficial ownership interests in a Regulation S Global Security shall be transferable in accordance with applicable law and the other terms of the Indenture. (e) Legends for Securities (i) Except as permitted by the following paragraphs (ii), (iii), (iv) or (vi), each Security certificate evidencing the Global Securities and the Definitive Securities (and all Securities issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form (each defined term in the legend being defined as such for purposes of the legend only): THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH EITHER THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG -10- AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE COMPANY AND THE TRUSTEE PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE. Each Security evidencing a Global Security offered and sold to QIBs pursuant to Rule 144A shall bear a legend in substantially the following form: EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. Each Definitive Security shall bear the following additional legend: IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS. (ii) Upon any sale or transfer of a Transfer Restricted Security that is a Definitive Security, the Registrar shall permit the Holder thereof to exchange such Transfer Restricted Security for a Definitive Security that does not bear the legends set forth above and rescind any restriction on the transfer of such Transfer Restricted Security if the Holder certifies in writing to the Registrar that its request for such exchange was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Initial Security). -11- (iii) After a transfer of any Initial Securities or Private Exchange Securities during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Securities or Private Exchange Securities, as the case may be, all requirements pertaining to the Restricted Securities Legend on such Initial Securities or such Private Exchange Securities shall cease to apply; provided, however, that the requirements that any such Initial Securities or such Private Exchange Securities be issued in global form shall continue to apply. (iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Exchange Securities in exchange for their Initial Securities, all requirements pertaining to Initial Securities that Initial Securities be issued in global form shall continue to apply, and Exchange Securities in global form without the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Registered Exchange Offer. (v) Upon the consummation of a Private Exchange with respect to the Initial Securities pursuant to which Holders of such Initial Securities are offered Private Exchange Securities in exchange for their Initial Securities, all requirements pertaining to such Initial Securities that Initial Securities be issued in global form shall continue to apply, and Private Exchange Securities in global form with the Restricted Securities Legend shall be available to Holders that exchange such Initial Securities in such Private Exchange. (vi) Upon a sale or transfer after the expiration of the Restricted Period of any Initial Security acquired pursuant to Regulation S, all requirements that such Initial Security bear the Restricted Securities Legend shall cease to apply and the requirements requiring any such Initial Security be issued in global form shall continue to apply. (f) Cancellation or Adjustment of Global Security. At such time as all beneficial interests in a Global Security have either been exchanged for Definitive Securities, transferred, redeemed, repurchased or canceled, such Global Security shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Security is exchanged for Definitive Securities, transferred in exchange for an interest in another Global Security, redeemed, repurchased or canceled, the principal amount of Securities represented by such Global Security shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Securities Custodian for such Global Security) with respect to such Global Security, by the Trustee or the Securities Custodian, to reflect such reduction. (g) Obligations with Respect to Transfers and Exchanges of Securities. (i) To permit registrations of transfers and exchanges in accordance with the terms of the Indenture, the Company shall execute and the Trustee shall authenticate, Definitive Securities and Global Securities at the Registrar's request. -12- (ii) All Securities issued upon any transfer or exchange pursuant to the terms of the Indenture shall evidence the same debt and shall be entitled to the same benefits under the Indenture as the Securities surrendered upon such transfer or exchange. (h) No Obligation of the Trustee. (i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Security, a member of, or a Participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any Participant or member thereof, with respect to any ownership interest in the Securities or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of redemption or repurchase) or the payment of any amount, under or with respect to such Securities. All notices and communications to be given to the Holders and all payments to be made to Holders under the Securities shall be given or made only to the registered Holders (which shall be the Depositary or its nominee in the case of a Global Security). The rights of beneficial owners in any Global Security shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners. (ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of any interest in any Security (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof. SECTION 2.4 Definitive Securities. (a) A Global Security deposited with the Depositary or with the Trustee as Securities Custodian pursuant to Section 2.2 shall be transferred to the beneficial owners thereof in the form of Definitive Securities in an aggregate principal amount equal to the principal amount of such Global Security, in exchange for such Global Security, only if such transfer complies with Section 2.3 and (i) the Company notifies the Trustee that the Depositary is no longer willing or able to act as a depositary or clearing system for the Securities or the Depositary ceases to be a "clearing agency" registered under the Exchange Act, and a successor depositary or clearing system is not appointed by the Company within 90 days of such notice or cessation, (ii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Securities under the Indenture, or (iii) upon the occurrence and continuation of an Event of Default. (b) Any Global Security that is transferable to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, -13- upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Definitive Securities of authorized denominations. Any portion of a Global Security transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 of principal amount and any integral multiple thereof and registered in such names as the Depositary shall direct. Any certificated Initial Security in the form of a Definitive Security delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.3, bear the Restricted Securities Legend. (c) The registered Holder of a Global Security may grant proxies and otherwise authorize any Person, including Participants and Persons that may hold interests through Participants, to take any action which a Holder is entitled to take under the Indenture or the Securities. (d) In the event of the occurrence of any of the events specified in Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to the Trustee a reasonable supply of Definitive Securities in fully registered form without interest coupons. SECTION 2.5 Certain Events of Default. If any Event of Default with respect to the Company specified in clauses (6) and (7) of Section 501 of the Indenture occurs, all the principal of and accrued and unpaid interest on the Securities then outstanding shall become automatically due and payable without any declaration or other act on the part of the Trustee or any Holder of Securities. ARTICLE THREE MISCELLANEOUS PROVISIONS SECTION 3.1 Ratification. The Base Indenture, as supplemented by this Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed. SECTION 3.2 Counterparts. This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed an original, and all such counterparts shall together constitute but one and the same instrument. SECTION 3.3 Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SECTION 3.4 Trustee. The Trustee shall not be responsible for or in respect of the validity or sufficiency of this Supplemental Indenture, except with respect to the execution hereof, nor shall the Trustee be responsible for or in respect of the recitals contained herein. [signature page follows] -14- IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture No. 1 to be duly executed as of the day and year first above written. CNF INC. By:____________________________________ Name: Title: THE BANK OF NEW YORK, as Trustee By:____________________________________ Name: Title: -15- EXHIBIT A -- Form of Debenture CNF INC. 6.70% [Series A] [Series B] [Series C] Senior Debenture due 2034 [global securities legend, as applicable] Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Company (as defined below) or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. No. [____] U.S.$[_________] CUSIP No.: [______] ISIN No.:[______] CNF Inc., a corporation duly organized and existing under the laws of Delaware (herein called the "Company," which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum set forth above or such other principal sum on the Schedule attached hereto (which shall not exceed U.S.$300,000,000) on May 1, 2034, and to pay interest thereon from April 30, 2004 or from the most recent interest payment date to which interest has been paid or duly provided for, semiannually on May 1 and November 1 in each year, commencing November 1, 2004, at the rate of 6.70% per annum, until the principal hereof is paid or made available for payment; provided, however, that Additional Interest shall accrue on the Securities as provided in the Registration Agreement if there is a Registration Default (as defined in the Registration Agreement). The Company shall notify the Trustee within three Business Days after the occurrence of a Registration Default, and Additional Interest shall be paid by depositing with the Trustee, in trust for the benefit of the Holders entitled to receive the Additional Interest, on or before the applicable semiannual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date to the record Holder entitled to receive the interest payment to be paid on such date as set forth in the Indenture. The interest (and Additional Interest, if any) so payable, and punctually paid or duly provided for, on any interest payment date will, as provided in the Indenture, be paid to the Person in whose name this Security (or any predecessor thereto) is registered at the close of business on the regular record date for such interest, which shall be the April 15 or October 15 A-1 (whether or not a Business Day), as the case may be, next preceding such interest payment date. Any such interest (and Additional Interest, if any) not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such regular record date and may either be paid to the Person in whose name this Security (or any predecessor thereto) is registered at the close of business on a special record date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such special record date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Payment of the principal of (and premium, if any) and interest (and Additional Interest, if any) on this Security will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan, The City of New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts; provided, however, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or by wire transfer to an account maintained by the Person entitled thereto as specified in the Security Register, provided that such Person shall have given the Trustee written wire instructions at least five Business Days prior to the applicable Interest Payment Date. Any payment required to be made in respect of the Securities on a date that is not a Business Day may be made on the next succeeding Business Day with the same force and effect as if made on that date. No additional interest shall accrue as a result of a delayed payment. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. [Signatures appear on next page] A-2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. CNF INC. By:____________________________________ Name: Title: By:____________________________________ Name: Title: TRUSTEE'S CERTIFICATE OF AUTHENTICATION This is one of the Securities of the series designated herein and referred to in the within-mentioned Indenture. Dated: April __, 2004 THE BANK OF NEW YORK, as Trustee By:____________________________________ Authorized Signatory A-3 [FORM OF REVERSE SIDE OF SECURITY] 6.70% Senior Debenture due 2034 Section 1. Indenture The Company issued the Securities under an Indenture, dated as of March 8, 2000, between the Company and The Bank of New York (as successor to Bank One Trust Company, National Association), as the Trustee, and Supplemental Indenture No. 1 thereto, dated as of April 30, 2004 (collectively, the "Indenture"). The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), as in effect on the date of the Indenture. Terms defined in the Indenture and not defined herein have the meanings ascribed thereto in the Indenture. The Securities are subject to all terms and provisions of the Indenture, and Securityholders are referred to the Indenture and the Trust Indenture Act for a statement of such terms and provisions. The Securities are unsecured obligations of the Company initially limited to $300,000,000 aggregate principal amount at any one time outstanding. This Security is one of the Initial Securities referred to in the Indenture. The Securities include the Initial Securities and any Exchange Securities and Private Exchange Securities issued in exchange for Initial Securities. The Initial Securities, the Exchange Securities and the Private Exchange Securities are treated as a single class of securities under the Indenture. Section 2. Optional Redemption The Securities may be redeemed at the option of the Company, in whole or in part, at any time or from time to time. The redemption price for the Securities to be redeemed on any redemption date will be equal to the greater of: (i) 100% of the principal amount of the Securities being redeemed on the redemption date; or (ii) the sum of the present values of the remaining scheduled payments of principal of and interest on the Securities being redeemed on that redemption date (not including any portion of any payments of interest accrued to the redemption date) discounted to the redemption date on a semiannual basis at the Treasury Rate, plus 35 basis points, as determined by the Quotation Agent, plus, in either case, accrued and unpaid interest on the principal amount of the Securities being redeemed to the redemption date. Notwithstanding the foregoing, installments of interest on Securities that are due and payable on interest payment dates falling on or prior to the relevant redemption date will be payable on the interest payment date to the registered Holders as of the close of business on the relevant record date according to the terms and provisions of the Securities and the Indenture. The redemption price will be calculated on the basis of a 360-day year consisting of twelve 30-day months. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Securities to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Securities. A-4 "Comparable Treasury Price" means, with respect to any redemption date for the Securities, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if fewer than three such Reference Treasury Dealer Quotations are obtained, the average of all such Quotations, or (C) if only one Reference Treasury Dealer Quotation is received, such Quotation. "Quotation Agent" means a Reference Treasury Dealer appointed by the Company. "Reference Treasury Dealer" means (A) Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc of America Securities LLC, J.P. Morgan Securities Inc. and PNC Capital Markets, Inc. (or their respective affiliates which are Primary Treasury Dealers), and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer in New York City (a "Primary Treasury Dealer"), the Company will substitute therefor another Primary Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the Company. "Reference Treasury Dealer Quotation" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. (New York City time) on the third business day preceding such redemption date. "Treasury Rate" means, with respect to any redemption date for the Securities, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. Section 3. Notice of Redemption Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Securities to be redeemed at his or her registered address. Once notice of redemption is mailed, the Securities called for redemption will become due and payable on the redemption date and at the applicable redemption price, plus accrued interest to the redemption date. Securities in denominations larger than $1,000 of principal amount may be redeemed in part but only in whole multiples of $1,000 of principal amount. If money sufficient to pay the redemption price of and accrued and unpaid interest accrued through the redemption date and liquidated damages, if any, on all Securities (or portions thereof) to be redeemed on the redemption date is deposited with the Paying Agent on or before the redemption date and certain other conditions as specified in the Indenture are satisfied, on and after such date interest shall cease to accrue on such Securities (or such portions thereof) called for redemption. Section 4. Sinking Fund The Securities are not subject to any sinking fund. Section 5. Denominations; Transfer; Exchange A-5 The Securities are in registered form without coupons in denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. Upon any transfer or exchange, the securities registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes required by law or permitted by the Indenture. The securities registrar need not register the transfer of or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or to transfer or exchange any Securities for a period of 15 days prior to the mailing of a notice of redemption of Securities to be redeemed. Section 6. Persons Deemed Owners The registered Holder of this Security may be treated as the owner of it for all purposes. Section 7. Unclaimed Money If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its written request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment. Section 8. Discharge and Defeasance Subject to certain conditions, the Company at any time may terminate some of or all its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of and interest on the Securities to redemption or maturity, as the case may be. Section 9. Trustee Dealings with the Company Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee. Section 10. No Recourse Against Others A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. Section 11. Authentication A-6 This Security shall not be valid until an authorized signatory of the Trustee (or an authenticating agent) manually signs the certificate of authentication on the other side of this Security. Section 12. Governing Law THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 13. CUSIP Numbers Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Securities and has directed the Trustee to use CUSIP numbers in notices of redemption as a convenience to Securityholders. No representation is made as to the accuracy of such numbers either as printed on the Securities or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. Section 14. Defined Terms. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. All terms used in this Security which are defined in the Registration Agreement shall have the meanings assigned to them in the Registration Agreement. Section 15. Holders' Compliance with Registration Agreement Each Holder of a Security, by acceptance hereof, acknowledges and agrees to the provisions of the Registration Agreement, including, without limitation, the obligations of the Holders with respect to a registration and the indemnification of the Company to the extent provided therein. In the event of a conflict between the terms of this Security and the Registration Agreement, the terms of the Registration Agreement shall control. The Company will furnish to any Holder of Securities upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Security. A-7 CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF TRANSFER OF SECURITIES This Certificate relates to $_____________ principal amount of Securities held in (check applicable space) ___ book-entry or ___ definitive form by _________________________ (the "Transferor"). The Transferor (check one box below): [ ] has requested the Trustee by written order to deliver in exchange for its beneficial interest in the Global Security held by the Depositary a Security or Securities in definitive, registered form of authorized denominations in an aggregate principal amount equal to its beneficial interest in such Global Security (or the portion thereof indicated above); or [ ] has requested the Trustee by written order to exchange or register the transfer of a Security or Securities. In connection with any transfer of any of the Securities evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act"), the undersigned confirms that such Securities are being transferred in accordance with its terms: CHECK ONE BOX BELOW (1) [ ] to the Company; or (2) [ ] pursuant to an effective registration statement under the Securities Act; or (3) [ ] inside the United States to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act; or (4) [ ] outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act; or (5) [ ] to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that has furnished to the Trustee a signed letter containing certain representations and agreements; or (6) [ ] pursuant to another available exemption from registration provided by Rule 144 under the Securities Act. Prior to the expiration of the period referred to in Rule 144(k), unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in A-8 the name of any Person other than the registered holder thereof; provided, however, that if box (4), (5) or (6) is checked, the Trustee may require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information satisfactory to the Company and the Trustee to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. [INSERT NAME OF TRANSFEROR] Dated:__________________________________ By:_____________________________________ A-9 SCHEDULE OF EXCHANGES The following exchanges of a part of this Book-Entry Security have been made:

Principal Amount of this Signature of Date of Amount of decrease in Amount of increase in Book-Entry Security authorized signatory Exchange Principal Amount of Principal Amount of following such decrease of Trustee or this Book-Entry Security this Book-Entry Security (or increase) Security Custodian

A-10 ASSIGNMENT FORM To assign this Security, fill in the form below: I or we assign and transfer this Security to ________________________________________________________________________________ (Print or type assignee's name, address and zip code) ________________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. No.) and irrevocably appoint _____________________________________agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Date: ______________________ Your Signature: ___________________________________ ________________________________________________________________________________ Sign exactly as your name appears on the other side of this Security. Signature Guaranteed ______________________________________ Participant in a Recognized Signature Guarantee Medallion Program By:___________________________________ Authorized Signatory A-11 EXHIBIT B FORM OF TRANSFEREE LETTER OF REPRESENTATIONS CNF Inc. In care of 101 Barclay Street, Floor 21 West New York, New York 10286 Attn: Corporate Trust Administration Ladies and Gentlemen: This certificate is delivered to request a transfer of $_________ principal amount of the 6.70% Senior Debentures due 2034 (the "Securities") of CNF Inc. (the "Company"). Upon transfer, the Securities would be registered in the name of the new beneficial owner as follows: Name:________________________ Address:_____________________ Taxpayer ID Number:__________ The undersigned represents and warrants to you that: 1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities Act")), purchasing for our own account or for the account of such an institutional "accredited investor" at least $250,000 principal amount of the Securities, and we are acquiring the Securities not with a view to, or for offer or sale in connection with, any distribution in violation of the Securities Act. We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Securities, and we invest in or purchase securities similar to the Securities in the normal course of our business. We, and any accounts for which we are acting, are each able to bear the economic risk of our or its investment. 2. We understand that the Securities have not been registered under the Securities Act and, unless so registered, may not be sold except as permitted in the following sentence. We agree on our own behalf and on behalf of any investor account for which we are purchasing the Securities to offer, sell or otherwise transfer such Securities prior to the date that is two years after the later of the date of original issue and the last date on which the Company or any affiliate of the Company was the owner of such Securities (or any predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to a registration statement that has been declared effective under the Securities Act, (c) in a transaction complying with the requirements of Rule 144A under the Securities Act ("Rule 144A"), to a person we reasonably believe is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing for its own account or for the account of a QIB and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) in an offshore transaction within the meaning of, and in B-1 compliance with, Regulation S under the Securities Act, (e) to an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is purchasing for its own account or for the account of such an institutional "accredited investor", in each case in a minimum principal amount of Securities of $250,000, or (f) pursuant to any other available exemption from the registration requirements of the Securities Act, subject in each of the foregoing cases to any requirement of law that the disposition of our property or the property of such investor account or accounts be at all times within our or their control and in compliance with any applicable state securities laws. The foregoing restrictions on resale will not apply subsequent to the Resale Restriction Termination Date. If any resale or other transfer of the Securities is proposed to be made pursuant to clause (e) above prior to the Resale Restriction Termination Date, the transferor shall deliver a letter from the transferee substantially in the form of this letter to the Company and the Trustee, which shall provide, among other things, that the transferee is an institutional "accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (f) under the Securities Act and that it is acquiring such Securities for investment purposes and not for distribution in violation of the Securities Act. Each purchaser acknowledges that the Company and the Trustee reserve the right prior to the offer, sale or other transfer prior to the Resale Restriction Termination Date of the Securities pursuant to clause (d), (e) or (f) above to require the delivery of an opinion of counsel, certifications or other information satisfactory to the Company and the Trustee. TRANSFEREE:___________________ By:___________________________ B-2 EX-4.4 4 a98854exv4w4.txt EXHIBIT 4.4 EXHIBIT 4.4 CNF INC. 6.70% SENIOR DEBENTURES DUE 2034 EXCHANGE AND REGISTRATION RIGHTS AGREEMENT April 30, 2004 Citigroup Global Markets Inc. Morgan Stanley & Co. Incorporated, As representatives of the Initial Purchasers c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013 Ladies and Gentlemen: CNF Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the Initial Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its 6.70% Senior Debentures due 2034. As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company agrees with the Initial Purchasers for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 1. Certain Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings: "Additional Interest" shall have the meaning assigned thereto in Section 2(c) hereof. "Affiliate" shall have the meaning specified in Rule 405 under the Securities Act and the terms "controlling" and "controlled" shall have meanings correlative thereto. "Agreement" shall mean this Exchange and Registration Rights Agreement, as may be amended from time to time. "Base Interest" shall mean the interest that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement. The term "broker-dealer" shall mean any broker or dealer registered with the Commission under the Exchange Act. "Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City. "Closing Date" shall mean the date on which the Securities are initially issued. "Commission" shall mean the U.S. Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "Effective Time," in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective, and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective. "Electing Holder" shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof. "Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time. "Exchange Offer" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Registration" shall have the meaning assigned thereto in Section 3(c) hereof. "Exchange Registration Statement" shall have the meaning assigned thereto in Section 2(a) hereof. "Exchange Securities" shall have the meaning assigned thereto in Section 2(a) hereof. "holder" shall mean each of the Initial Purchasers and other persons who acquire Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities. "Indenture" shall mean the Indenture, dated as of March 8, 2000, between the Company and the Trustee, and supplemented by Supplemental Indenture No. 1 dated April 30, 2004, as the same shall be amended from time to time. "Initial Purchasers" shall mean the Initial Purchasers named in Schedule I to the Purchase Agreement. 2 "Losses" shall mean losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending any loss, claim, liability, damage or action). "New Securities" shall mean debt securities of the Company identical in all material respects to the Securities (except that the transfer restrictions shall be modified or eliminated, as appropriate). "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto. "person" shall mean a corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency. "Purchase Agreement" shall mean the Purchase Agreement, dated as of April 27, 2004, between the Initial Purchasers and the Company relating to the Securities. "Registrable Securities" shall mean the Securities; provided, however, that a Security shall cease to be a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) hereof (provided that any Exchange Security held by a broker-dealer participating in the Exchange Offer that, pursuant to the last two sentences of Section 2(a), is included in a prospectus for use in connection with resales by such broker-dealer shall be deemed to be a Registrable Security with respect to Sections 5 and 8 until resale of such Registrable Security has been effected within the 120-day period referred to in Section 2(a)); (ii) in the circumstances contemplated by Section 2(b) hereof, a Shelf Registration Statement registering such Security under the Securities Act has been declared or becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to be outstanding. "Registration Default" shall have the meaning assigned thereto in Section 2(c) hereof. "Registration Expenses" shall have the meaning assigned thereto in Section 4 hereof. "Resale Period" shall have the meaning assigned thereto in Section 2(a) hereof. 3 "Restricted Holder" shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder's business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company. "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same may be amended from time to time. "Securities" shall mean, collectively, the 6.70% Senior Debentures due May 1, 2034 of the Company to be issued and sold to the Initial Purchasers, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture. "Securities Act" shall mean the Securities Act of 1933, as amended, or any successor thereto, as the same may be amended from time to time. "Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof. "Shelf Registration Statement" shall have the meaning assigned thereto in Section 2(b) hereof. "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same may be amended from time to time. "Trustee" shall mean The Bank of New York, as successor to Bank One Trust Company, National Association, or any successor thereof. "Underwritten Offering" shall mean a firm commitment offering of Securities by holders through an identified underwriter reasonably acceptable to the Company pursuant to a Shelf Registration Statement with respect to at least $20 million aggregate principal amount of Securities. Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. 2. Registration Under the Securities Act. (a) Except as set forth in Section 2(b) below, the Company agrees to file under the Securities Act, as soon as practicable, but no later than 90 days after the Closing Date, a registration statement relating to an offer to exchange (such registration 4 statement, the "Exchange Registration Statement," and such offer, the "Exchange Offer") any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company, which debt securities are substantially identical to the Securities (and are entitled to the benefits of a trust indenture which is substantially identical to the Indenture or is the Indenture and which has been qualified under the Trust Indenture Act), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the Additional Interest contemplated in Section 2(c) below (such new debt securities hereinafter called "Exchange Securities"). The Company agrees to use its reasonable best efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 180 days after the Closing Date. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply in all material respects with all applicable tender offer rules and regulations under the Exchange Act. The Company further agrees to use its reasonable best efforts to commence and complete the Exchange Offer promptly after the Effective Time and shall hold the Exchange Offer open for not less than 20 Business Days and not more than 30 Business Days (unless otherwise required by applicable law) and exchange Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer. The Exchange Offer will be deemed to have been "completed" only if the debt securities received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of a substantial majority of the States of the United States of America. The Exchange Offer shall be deemed to have been completed upon the earlier to occur of (i) the Company having exchanged the Exchange Securities for all outstanding Registrable Securities pursuant to the Exchange Offer and (ii) the Company having exchanged, pursuant to the Exchange Offer, Exchange Securities for all Registrable Securities that have been properly tendered and not withdrawn before the expiration of the Exchange Offer, which shall be on a date that is not less than 20 Business Days and not more than 30 Business Days following the commencement of the Exchange Offer. The Company agrees (x) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of Exchange Securities that is a broker-dealer and (y) to keep such Exchange Registration Statement effective for a period (the "Resale Period") beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 120th day after the Exchange Offer has been completed or such time as such broker-dealers no longer own any Registrable Securities. With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Sections 5(a), (c), (d) and (e) hereof. The Company agrees, if requested by the Commission, that, prior to effectiveness of the Exchange Registration Statement, it will provide a supplemental letter to the Commission (A) stating that the Company is conducting the Exchange Offer in reliance 5 on the position of the Commission in Exxon Capital Holdings Corporation (pub. avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5, 1991); and (B) including a representation that the Company has not entered into any arrangement or understanding with any person to distribute the New Securities to be received in the Exchange Offer and that, to the Company's knowledge, each holder participating in the Exchange Offer is acquiring the New Securities in the ordinary course of business and has no arrangement or understanding with any person to participate in the distribution of the New Securities. (b) If (i) on or prior to the time the Exchange Offer is completed there is any change in law or to existing Commission interpretations such that the Company is not permitted to effect the Exchange Offer as contemplated by Section 2(a) hereof, (ii) for any other reason the Exchange Registration Statement is not declared effective within 180 calendar days following the Closing Date or the Exchange Offer is not consummated within 30 Business Days after the Exchange Registration Statement is declared effective (provided that, if the Exchange Registration Statement shall be declared effective after such 180-day period or if the Exchange Offer shall be consummated after such 30-Business Day period, then the Company's obligation under this clause (ii) arising from the failure of the Exchange Registration Statement to be declared effective within such 180-day period or the failure of the Exchange Offer to be consummated within 30 Business Days after the Exchange Registration Statement becomes effective, respectively, shall terminate), (iii) any Holder is not eligible to participate in the Exchange Offer or elects to participate in the Exchange Offer but does not receive freely tradeable Exchange Securities pursuant to the Exchange Offer or (iv) upon the written request of any of the Initial Purchasers within 90 days following the consummation of the Exchange Offer with respect to Registrable Securities that are not permitted to be exchanged for Exchange Securities in the Exchange Offer or if the Initial Purchasers do not receive freely tradable Exchange Securities in the Exchange Offer, then, in the case of each of clauses (i) through (iv), the Company shall, in lieu of (or, in the case of clauses (iii) and (iv), in addition to) conducting the Exchange Offer contemplated by Section 2(a), file under the Securities Act as soon as practicable, but no later than the later of 30 days after the time such obligation to file arises, a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the "Shelf Registration" and such registration statement, the "Shelf Registration Statement"). The Company agrees to use its reasonable best efforts (x) to cause the Shelf Registration Statement to become or be declared effective no later than the later of 90 days after the date on which the Company is required to file such Shelf Registration Statement as provided in the immediately preceding paragraph and 180 days after the Closing Date and, subject to Section 2(f), to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the Effective Time or such time as there are no longer any Registrable Securities outstanding; provided, however, that no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable Securities unless such holder is an Electing Holder, and (y) after 6 the Effective Time of the Shelf Registration Statement, promptly upon the request of any holder of Registrable Securities included therein that is not then an Electing Holder, to take any action reasonably necessary to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such holder as a selling securityholder in the Shelf Registration Statement; provided, however, that nothing in this clause (y) shall relieve any such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) hereof prior to being named therein. The Company further agrees to supplement or make amendments to the Shelf Registration Statement, as and when required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, and the Company agrees to furnish to each Electing Holder copies of any such supplement or amendment promptly following its filing with the Commission, but only if such amendment or supplement is not made available on the Commission's EDGAR System. (c) In the event that (i) the Company has not filed the Exchange Registration Statement or Shelf Registration Statement on or before the date on which such registration statement is required to be filed pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer has not been completed within 30 Business Days after the initial effective date of the Exchange Registration Statement relating to the Exchange Offer (if the Exchange Offer is then required to be made) or (iv) any Exchange Registration Statement or Shelf Registration Statement required by Section 2(a) or 2(b) hereof is filed and declared effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such registration statement (except as specifically permitted herein) without being succeeded promptly by an additional registration statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default" and each period during which a Registration Default has occurred and is continuing, a "Registration Default Period"), then, as liquidated damages for such Registration Default, subject to the provisions of Sections 3(d)(ii) and 8(b), additional interest ("Additional Interest"), in addition to the Base Interest, shall accrue at a per annum rate of 0.25% until all Registration Defaults have been cured. (d) The Company shall take all reasonable actions necessary or advisable to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated. (e) Any reference herein to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time and any reference herein to any post-effective amendment to a registration statement as of any time shall be deemed to include any 7 document incorporated, or deemed to be incorporated, therein by reference as of such time. (f) During any 365-day period, the Company may suspend the use of the prospectus forming part of the Shelf Registration Statement or, with respect to the use in any resales by a holder of Exchange Securities that is a broker-dealer, the Exchange Registration Statement, for up to four periods not to exceed 45 consecutive days (other than the consecutive 45-day period immediately prior to the stated maturity of the Securities) or an aggregate of 90 days in any 12-month period if the Board of Directors of the Company shall have determined in good faith that because of valid business reasons (not including avoidance of the Company's obligations hereunder), including the acquisition or divestiture of businesses or assets, availability and preparation of financial information relative to the Company, any subsidiary or any proposed acquisition, pending corporate developments and similar events, it is in the best interests of the Company to suspend such use, and prior to suspending such use the Company provides the holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. 3. Registration Procedures. If the Company files a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply: (a) At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, the Company shall qualify the Indenture under the Trust Indenture Act. (b) In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (c) In connection with the Company's obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but no later than 90 days after the Closing Date, an Exchange Registration Statement on any form which may be utilized by the Company and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use its reasonable best efforts to cause such Exchange Registration Statement to become effective as soon as practicable thereafter, but no later than 180 days after the Closing Date; 8 (ii) as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities; (iii) promptly give written notice to each broker-dealer that has requested or received copies of the prospectus included in such registration statement (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction, or (E) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and promptly give written notice to counsel of the Initial Purchasers (1) of any comments by the Commission (and promptly provide copies thereof) and by the blue sky or securities commissioner or regulator of any 9 state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (2) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (3) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (4) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (iv) in the event that the Company would be required, pursuant to Section 3(c)(iii)(E) above, to notify any broker-dealers holding Exchange Securities, subject to Section 2(f), as soon as practicable prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (v) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date; (vi) use its reasonable best efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 10 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) cooperate with the Initial Purchasers in endeavoring to qualify the Securities for sale under the securities laws of such jurisdictions as the Initial Purchasers may reasonably have designated in writing and will make such applications, file such documents and furnish such information as may be reasonably required for that purpose; provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders; (vii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period; (viii) provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time; and (ix) comply in all material respects with all applicable rules and regulations of the Commission, and make generally available to its securityholders an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). (d) In connection with the Company's obligations with respect to the Shelf Registration, if applicable, the Company shall, as soon as practicable (or as otherwise specified): (i) prepare and file with the Commission, as soon as practicable but in any case within the time periods specified in Section 2(b), a Shelf Registration Statement on any form which may be utilized by the Company and which shall register all of the Registrable Securities for resale by the holders thereof in accordance with such reasonable method 11 or methods of disposition as may be specified by such of the holders as, from time to time, may be Electing Holders and use its reasonable best efforts to cause such Shelf Registration Statement to become effective as soon as practicable but in any case within the time periods specified in Section 2(b); (ii) mail the Notice and Questionnaire to the holders of Registrable Securities within a reasonable period of time following the date on which the obligation to file a Shelf Registration Statement arose; no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no holder who was mailed a Notice and Questionnaire shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time unless, and no holder shall be entitled to Additional Interest until, such holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, holders of Registrable Securities shall have no less than 20 calendar days from the date on which the Notice and Questionnaire is first mailed to such holders to return a completed and signed Notice and Questionnaire to the Company; (iii) after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided that the Company shall not be required to take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company; (iv) as soon as practicable prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and promptly furnish to the Electing Holders copies of any such supplement or amendment; 12 (v) comply in all material respects with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the reasonable intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement; (vi) in the event of an Underwritten Offering, provide (A) the Electing Holders, (B) the underwriters (which term, for purposes of this Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D) counsel for any such underwriter or agent and (E) not more than one counsel for all the Electing Holders the opportunity to participate in the preparation of such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto; (vii) in the event of an Underwritten Offering, for a reasonable period prior to the commencement of such Underwritten Offering, and throughout the period specified in Section 2(b), make available at reasonable times at the Company's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(vi) who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise) (other than disclosure by any such person named in Section 3(d)(vi)), (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the 13 Company prompt prior written notice of such requirement), or (C) subject to Section 2(f), such information is required to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registration Statement, prospectus, amendment or supplement, as the case may be, complies in all material respects with applicable requirements of the federal securities laws and the rules and regulations of the Commission and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (viii) promptly notify each of the Electing Holders, and, in any Underwritten Offering, any sales or placement agent therefor and any underwriter thereof (which notification may be made through any managing underwriter that is a representative of such underwriter for such purpose) and confirm such notice in writing upon request, (A) when such Shelf Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement, (D) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction, or (E) if at any time when a prospectus is required to be delivered under the Securities Act, that such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; and promptly give written notice to counsel of the Initial Purchasers (1) of any comments by 14 the Commission (and promptly provide copies thereof) and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (2) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (3) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (4) if at any time when a prospectus is required to be delivered under the Securities Act, that such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading; (ix) use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date; (x) if requested by any managing underwriter or underwriters or any placement or sales agent in an Underwritten Offering or any Electing Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount of Registrable Securities being sold by such Electing Holder or agent or to any underwriters, the name and description of such Electing Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other material terms of the offering of the Registrable Securities to be sold by such Electing Holder or agent or to such underwriters; and make all 15 required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; (xi) furnish to each Electing Holder and, with respect to an Underwritten Offering, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) a conformed copy of such Shelf Registration Statement, each such amendment and supplement thereto (in each case including, if requested, all exhibits thereto and documents incorporated by reference therein to the extent not available on the Commission's EDGAR system) and the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus) as such Electing Holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder, and offered or sold by such agent or underwritten by such underwriter in such Underwritten Offering and to permit such Electing Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder and by any such agent and underwriter in such Underwritten Offering, in each case in the form most recently provided to such person by the Company, in connection with the offering and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto; (xii) use reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such Electing Holder, 16 agent or underwriter to complete its distribution of Securities pursuant to such Shelf Registration Statement and (C) take such reasonable actions as may be reasonably necessary or advisable to enable each such Electing Holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(xii), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders; (xiii) use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities; (xiv) unless any Registrable Securities shall be in book-entry form only, cooperate with the Electing Holders and the managing underwriters of an Underwritten Offering to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities; (xv) provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time; (xvi) in the event of an Underwritten Offering, enter into one or more underwriting agreements, engagement letters, agency agreements or similar agreements, as appropriate, including customary provisions relating to indemnification and contribution, and take such other actions in connection 17 therewith as any Electing Holders aggregating at least 50% in aggregate principal amount of the Registrable Securities included therein shall request in order to expedite or facilitate the disposition of such Registrable Securities; (xvii) in the event of an Underwritten Offering and as required by an the agreement referred to in Section 3(d)(xvi) hereof, (A) make such representations and warranties to the Electing Holders and the underwriters thereof in form, substance and scope as are customarily made in connection with an offering of debt securities pursuant to any appropriate underwriting agreement and a registration statement filed on the form applicable to the Shelf Registration; (B) obtain an opinion of counsel to the Company in customary form for such an offering; (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of the Company to be in customary form and covering such matters of the type customarily covered by letters of such type and (D) deliver such documents and certificates, including officers' certificates, as may be reasonably requested and as are customary for such offerings; (xviii) notify in writing each holder of Registrable Securities of any amendment or waiver of this Agreement effected pursuant to Section 8(h) hereof, which notices shall contain the text of the amendment or waiver effected or a description thereof; (xix) in the case of an Underwritten Offering, in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Conduct Rules) of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time) thereof, assist such broker-dealer in complying with the requirements of such Conduct Rules; and (xx) comply, in all material respects, with all applicable rules and regulations of the Commission, and make generally available to its securityholders an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder). 18 (e) In the event that the Company would be required, pursuant to Section 3(d)(viii)(E) above, to notify the Electing Holders, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, the Company shall promptly prepare and furnish to each of the Electing Holders, to each placement or sales agent, if any, and to each such underwriter, if any, entitled to such notification a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. (f) Each holder agrees that upon receipt of any notice from the Company pursuant to Sections 2(f), 3(c)(iii)(E) or 3(d)(viii)(E) hereof, such holder shall forthwith discontinue the disposition of Registrable Securities or Exchange Securities, as the case may be, pursuant to the registration applicable to such Registrable Securities or Exchange Securities, as the case may be, until such holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Registrable Securities or Exchange Securities, as the case may be, at the time of receipt of such notice. (g) In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such Electing Holder and such Electing Holder's intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act. Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 4. Registration Expenses. 19 The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the Company's performance of or compliance with this Agreement, including (a) all Commission and any NASD registration, filing and review fees and expenses including reasonable fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review, (b) all reasonable fees and expenses in connection with the qualification of the Securities for offering and sale under the State securities and blue sky laws referred to in Section 3(d)(xii) hereof, provided that the Company shall not be required to (1) qualify as a foreign corporation, (2) to file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders, (c) all reasonable expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the reasonable expenses of preparing the Securities for delivery and the expenses of printing or producing any underwriting agreements, agreements among underwriters, selling agreements and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities), (d) reasonable fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian, (e) internal expenses (including all salaries and expenses of the Company's officers and employees performing legal or accounting duties), (f) reasonable fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (g) reasonable fees, disbursements and expenses of any "qualified independent underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) reasonable fees, disbursements and expenses of one counsel for the Electing Holders retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal amount of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company), (j) any fees charged by securities rating services for rating the Securities, and (k) reasonable fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above. 5. Indemnification. (a) Indemnification by the Company. The Company will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, each of the Electing Holders of Registrable Securities included in a Shelf Registration Statement and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against 20 any Losses, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or Shelf Registration Statement, as the case may be, under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such holder, Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (with respect to a prospectus, in light of the circumstances under which they were made) not misleading, and will reimburse such holder, such Electing Holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such person in any such case to the extent that any such Loss arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein. (b) Indemnification by the Holders and any Agents and Underwriters. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2(b) hereof and to entering into any underwriting agreement with respect thereto, that the Company shall have received an undertaking reasonably satisfactory to it from the Electing Holder of such Registrable Securities and from each underwriter named in any such underwriting agreement or placement or sales agent, severally and not jointly, to (i) indemnify and hold harmless the Company, and all other holders of Registrable Securities, against any Losses to which the Company or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, insofar as such Losses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein (with respect to a prospectus, in light of the circumstances under which they were made) not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder, underwriter or agent expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 5(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holder from the sale of such Electing Holder's Registrable Securities pursuant to such registration. 21 (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 5, notify such indemnifying party in writing of the commencement of such action. No indemnification provided for in Section 5(a) or 5(b) shall be available to any party who shall fail to give notice as provided in this Section 5(c) if the party to whom notice was not given was unaware of the proceeding to which such notice would have related and was materially prejudiced by the failure to give such notice, but the failure to give such notice shall not relieve the indemnifying party or parties from any liability which it or they may have to the indemnified party for contribution or otherwise than on account of the provisions of Section 5(a) or 5(b). In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. Neither party shall, without the written consent of the other party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the other party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of the other party. (d) Contribution. If for any reason the indemnification provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any Losses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such Losses (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such Losses (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 5(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all 22 of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 5(d). The amount paid or payable by an indemnified party as a result of the Losses (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 5(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' and any underwriters' obligations in this Section 5(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint. (e) The obligations of the Company under this Section 5 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or underwriters contemplated by this Section 5 shall be in addition to any liability which the respective holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company (including any person who, with his consent, is named in any registration statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Securities Act. 6. Underwritten Offerings. (a) Selection of Underwriters. If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an Underwritten Offering, the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company. (b) Participation by Holders. Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any Underwritten Offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved 23 by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements. 7. Rule 144. The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act. 8. Miscellaneous. (a) No Inconsistent Agreements. The Company represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Agreement. (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Initial Purchasers and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Initial Purchasers and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Agreement in accordance with the terms and conditions of this Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 3240 Hillview Avenue, Palo Alto, CA 94304, and if to a holder, to the address of such holder set forth in the security register or 24 other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. (d) Parties in Interest. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders. In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Agreement. If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof. (e) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer. (f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. (g) Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. (h) Entire Agreement; Amendments. This Agreement and the other writings referred to herein (including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the holders of at least a majority in aggregate principal amount of the Registrable Securities 25 at the time outstanding. Each holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 8(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder. (i) Inspection. For so long as this Agreement shall be in effect, upon written request to the Company, a copy of this Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be mailed to any holder of Registrable Securities for proper purposes only (which shall include any purpose related to the rights of the holders of Registrable Securities under the Securities, the Indenture and this Agreement). (j) Counterparts. This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument. 26 If the foregoing is in accordance with your understanding, please sign and return to us one for the Company and each of the Representatives plus one for each counsel counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Initial Purchasers, this letter and such acceptance hereof shall constitute a binding agreement between each of the Initial Purchasers the Company. It is understood that your acceptance of this letter on behalf of each of the Initial Purchasers is pursuant to the authority set forth in a form of agreement among the Initial Purchasers, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof. Very truly yours, CNF INC. By: ____________________________ Name: Mark C. Thickpenny Title: Vice President and Treasurer Accepted as of the date hereof: CITIGROUP GLOBAL MARKETS INC. MORGAN STANLEY & CO. INCORPORATED, on behalf of themselves and as representatives of the Initial Purchasers BY: CITIGROUP GLOBAL MARKETS INC. By:_______________________________ Name: Stephen H. Woo Title: Vice President 27 EXHIBIT A CNF INC. INSTRUCTION TO DTC PARTICIPANTS (Date of Mailing) URGENT - IMMEDIATE ATTENTION REQUESTED DEADLINE FOR RESPONSE: [DATE]* The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in the CNF Inc. (the "Company") 6.70% Senior Debentures due 2034 (the "Securities") are held. The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire. It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact CNF Inc., 3240 Hillview Avenue, Palo Alto, California 94304, (650) [494-2900]. - ---------- *Not less than 20 calendar days from date of mailing. A-1 CNF INC. Notice of Registration Statement and Selling Securityholder Questionnaire (Date) Reference is hereby made to the Exchange and Registration Rights Agreement (the "Registration Rights Agreement") between CNF Inc. (the "Company") and the Initial Purchasers named therein. Pursuant to the Registration Rights Agreement, the Company has filed with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Company's 6.70% Senior Debentures due 2034 (the "Securities"). A copy of the Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company's counsel at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the prospectus forming a part thereof for resales of Registrable Securities. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. The term "Registrable Securities" is defined in the Registration Rights Agreement. A-2 ELECTION The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 5 of the Agreement, as if the undersigned Selling Securityholder were an original party thereto. Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and as Exhibit B to the Registration Rights Agreement. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: A-3 QUESTIONNAIRE (1) (a) Full Legal Name of Selling Securityholder: ________________________________________________________ (b) Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below: ________________________________________________________ (c) Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held: ________________________________________________________ (2) Address for Notices to Selling Securityholder: ________________________________________________ ________________________________________________ ________________________________________________ Telephone: ________________________________________________ Fax: ________________________________________________ Contact Person: ________________________________________________ (3) Beneficial Ownership of Securities: Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities. (a) Principal amount of Registrable Securities beneficially owned: _________________________________________________________________ CUSIP No(s). of such Registrable Securities: ____________________ (b) Principal amount of Securities other than Registrable Securities beneficially owned: _________________________________________________________________ CUSIP No(s). of such other Securities: __________________________ (c) Principal amount of Registrable Securities which the undersigned wishes to be included in the Shelf Registration Statement: _________________________________________________________________ CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:____________________________________ A-4 (4) Beneficial Ownership of Other Securities of the Company: Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3). State any exceptions here: (5) Relationships with the Company: Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. State any exceptions here: (6) Plan of Distribution: Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. State any exceptions here: A-5 By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M. In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus. In accordance with the Selling Securityholder's obligation under Section 3(d) of the Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows: (i) To the Company: Eberhard G. H. Schmoller, Senior Vice President and General Counsel CNF Inc. 3240 Hillview Avenue Palo Alto, California 94304 (ii) With a copy to: Gregg A. Noel Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071 Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect A-6 to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed in all respects by the laws of the State of New York. A-7 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. Dated:_______________ _______________________________________________________________________ Selling Securityholder (Print/type full legal name of beneficial owner of Registrable Securities) By:______________________________________________________ Name: Title: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT: Gregg A. Noel Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071 A-8 EXHIBIT B NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT [_________________] CNF Inc. c/o [_______________] [Address of [__________]] Attention: Trust Officer Re: CNF Inc. (the "Company") % Senior Debentures due Dear Ladies and Gentlemen: Please be advised that ________________ has transferred $____________ aggregate principal amount of the above-referenced Debentures pursuant to an effective Registration Statement on Form [______] (File No. 333-_________) filed by the Company. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Debentures is named as a "Selling Holder" in the Prospectus dated ___________ or in supplements thereto, and that the aggregate principal amount of the Debentures transferred are the Debentures listed in such Prospectus opposite such owner's name. Dated: Very truly yours, ________________________________________ (Name) By:_____________________________________ (Authorized Signature) EX-5 5 a98854exv5.txt EXHIBIT 5 EXHIBIT 5 [LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP] June 4, 2004 CNF Inc. 3240 Hillview Avenue Palo Alto, California 94304 Re: CNF Inc. Registration Statement on Form S-4 Ladies and Gentlemen: We have acted as special counsel to CNF Inc., a Delaware corporation (the "Company"), in connection with the public offering of $300,000,000 aggregate principal amount of the Company's 6.70% Senior Debentures due 2034 (the "Exchange Debentures"). The Exchange Debentures will be exchanged (the "Exchange Offer") for a like principal amount of the issued and outstanding 6.70% Senior Debentures due 2034 of the Company (the "Original Debentures") under an Indenture, dated as of March 8, 2000 (as amended by the Supplemental Indenture No. 1 dated as of April 30, 2004, the "Indenture"), by and between the Company and The Bank of New York (as successor to Bank One Trust Company, National Association), as Trustee (the "Trustee"), as contemplated by the Exchange and Registration Rights Agreement, dated as of April 30, 2004 (the "Registration Rights Agreement"), by and among the Company, Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representative of the initial purchasers named therein. This opinion is being furnished in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the "Securities Act"). In rendering the opinion set forth herein, we have examined and relied on originals or copies of the following: (a) the registration statement on Form S-4 of the Company relating to the Exchange Debentures to be filed today with the Securities and Exchange Commission (the "Commission") under the Securities Act (the "Registration Statement"); (b) an executed copy of the Registration Rights Agreement; CNF Inc. June 4, 2004 Page 2 (c) an executed copy of the Indenture; and (d) the form of the Exchange Debentures. We have also examined originals or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as we have deemed necessary or appropriate as a basis for the opinion set forth below. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic, certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of documents executed or to be executed, we have assumed that the parties thereto had or will have the power, corporate or other, to enter into and perform all obligations thereunder and have also assumed the due authorization by all requisite action, corporate or other, and the execution and delivery by such parties of such documents and, except to the extent expressly set forth in our opinion below, the validity and binding effect thereof on such parties. To the extent our opinion set forth below relates to the enforceability of the choice of New York law and choice of New York forum provisions of the Exchange Debentures, our opinion is rendered in reliance upon N.Y. Gen. Oblig. Law Sections 5-1401, 5-1402 (McKinney 2001) and N.Y. C.P.L.R. 327(b) (McKinney 2001) and is subject to the qualification that such enforceability may be limited by public policy considerations of any jurisdiction, other than the courts of the State of New York, in which enforcement of such provisions, or of a judgment upon an agreement containing such provisions, is sought. We have also assumed that the Company has complied with all aspects of applicable laws of jurisdictions other than the State of New York in connection with the transactions contemplated by the Indenture and the Registration Rights Agreement. We have assumed that the execution and delivery by the Company of the Indenture and the Exchange Debentures and the performance by the Company of its obligations thereunder do not and will not violate, conflict with or constitute a default under any agreement or instrument to which the Company or its properties is subject, except for those agreements and instruments which have been identified to us by the Company as being material to it and which are listed as exhibits to the Registration Statement. As to any facts material to the opinions expressed herein that we did not independently establish or verify, we have relied upon statements and representations of officers and other representatives of the Company and others and of public officials. Our opinion set forth herein is limited to the laws of the State of New York that, in our experience, are applicable to securities of the type covered by the Registration Statement and, to the extent that judicial or regulatory orders or decrees or consents, approval, licenses, authorizations, validations, filings, recordings or registrations with governmental authorities are relevant, to those required under such laws (all of the foregoing being referred to as "Opined on Law"). We do not express any opinion with respect to the law of any jurisdiction other than Opined on Law or as to the effect of any such non-opined-on law on the opinion herein stated. CNF Inc. June 4, 2004 Page 3 Based upon and subject to the foregoing and the limitations, qualifications, exceptions and assumptions set forth herein, we are of the opinion that when the Exchange Debentures (in the form examined by us) have been duly executed and authenticated in accordance with the terms of the Indenture and have been delivered upon consummation of the Exchange Offer against receipt of Original Debentures surrendered in exchange therefor in accordance with the terms of the Registration Rights Agreement and the Exchange Offer, the Exchange Debentures will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except to the extent that enforcement thereof may be limited by (1) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to creditors' rights generally and (2) general principles of equity (regardless of whether enforceability is considered in a proceeding at law or in equity). We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement. We also consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement. In giving this consent, we do not thereby admit that we are included in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable law. Very truly yours, /s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP EX-12.A 6 a98854exv12wa.txt EXHIBIT 12.A . . . EXHIBIT 12(a) CNF INC. COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO FIXED CHARGES

THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, --------------- --------------------------------------------------------- (DOLLARS IN THOUSANDS) 2004 2003 2003 2002 2001 2000 1999 - ---------------------- ------ ------- -------- --------- --------- --------- ---------- Fixed Charges: Interest expense $ 9,040 $ 9,272 $ 30,071 $ 23,558 $ 27,992 $ 29,972 $ 25,972 Capitalized interest -- 46 241 455 864 4,636 5,864 Amortization of debt expense 334 331 1,354 1,321 1,064 1,044 908 Dividend requirement on Series B Preferred Stock (1) 2,469 2,534 10,072 10,331 10,606 10,808 10,992 Interest component of rental expense (2) 6,486 7,383 17,138 19,564 25,033 38,161 41,363 ------- ------- -------- --------- --------- --------- --------- Fixed Charges $18,329 $19,566 $ 58,876 $ 55,229 $ 65,559 $ 84,621 $ 85,099 ======= ======= ======== ========= ========= ========= ========= Earnings (Loss): Income (Loss) from continuing operations before taxes (3) $43,326 $29,435 $156,016 $ 146,244 $(695,933) $ 261,196 $ 332,260 (Income) Loss from equity-method investment (2,392) (2,976) (20,718) (18,188) 9,415 560 -- ------- -------- -------- --------- --------- --------- --------- 40,934 26,459 135,298 128,056 (686,518) 261,756 332,260 Fixed charges 18,329 19,566 58,876 55,229 65,559 84,621 85,099 Capitalized interest -- (46) (241) (455) (864) (4,636) (5,864) Preferred dividend requirements (4) (2,469) (2,534) (10,072) (10,331) (10,606) (10,808) (10,992) ------- ------- -------- --------- --------- --------- --------- $56,794 $43,445 $183,861 $ 172,499 $(632,429) $ 330,933 $ 400,503 ======= ======= ======== ========= ========= ========= ========= Ratio 3.1x 2.2x 3.1x 3.1x (9.6)x 3.9x 4.7x Deficiency in the coverage of fixed charges by earnings (loss) before fixed charges -- -- -- -- (697,988) -- -- ======= ======== ======== ========= ========= ========= =========

- ----------------------------- (1) Dividends on shares of the Series B cumulative convertible preferred stock are used to pay debt service on notes issued by the CNF's Thrift and Stock Plan. (2) Estimate of the interest portion of lease payments. (3) For the year ended December 31, 2001, results included a $652.2 million loss from restructuring charges at Forwarding and Menlo Worldwide Logistics' $47.5 million loss from the business failure of a customer. (4) Preferred stock dividend requirements included in Fixed Charges but not deducted in the determination of Income (Loss) from Continuing Operations Before Income Taxes. EX-12.B 7 a98854exv12wb.txt EXHIBIT 12.B EXHIBIT 12(b) CNF INC. COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

THREE MONTHS ENDED MARCH 31, YEAR ENDED DECEMBER 31, ---------------- --------------------------------------------------------- (DOLLARS IN THOUSANDS) 2004 2003 2003 2002 2001 2000 1999 - ---------------------- ------- ------- -------- --------- --------- --------- ---------- Combined Fixed Charges and Preferred Stock Dividends: Interest expense $ 9,040 $ 9,272 $ 30,071 $ 23,558 $ 27,992 $ 29,972 $ 25,972 Capitalized interest -- 46 241 455 864 4,636 5,864 Amortization of debt expense 334 331 1,354 1,321 1,064 1,044 908 Dividend requirement on Series B Preferred Stock (1) 2,469 2,534 10,072 10,331 10,606 10,808 10,992 Dividend requirement on preferred securities of subsidiary trust -- -- 6,250 6,250 6,250 6,250 6,250 Interest component of rental expense (2) 6,486 7,383 17,138 19,564 25,033 38,161 41,363 ------- ------- -------- -------- --------- --------- -------- Fixed Charges $18,329 $19,566 $ 65,126 $ 61,479 $ 71,809 $ 90,871 $ 91,349 ======= ======= ======== ======== ========= ========= ======== Earnings (Loss): Income (Loss) from continuing operations before taxes (3) $43,326 $29,435 $156,016 $146,244 $(695,933) $ 261,196 $332,260 (Income) Loss from equity-method investment (2,392) (2,976) (20,718) (18,188) 9,415 560 -- ------- ------- -------- --------- --------- --------- -------- 40,934 26,459 135,298 128,056 (686,518) 261,756 332,260 Fixed charges 18,329 19,566 65,126 61,479 71,809 90,871 91,349 Capitalized interest -- (46) (241) (455) (864) (4,636) (5,864) Preferred dividend requirements (4) (2,469) (2,534) (10,072) (10,331) (10,606) (10,808) (10,992) ------- ------- -------- -------- --------- --------- -------- $56,794 $43,445 $190,111 $178,749 $(626,179) $ 337,183 $406,753 ======= ======= ======== ======== ========= ========= ======== Ratio 3.1x 2.2x 2.9x 2.9x (8.7)x 3.7x 4.5x Deficiency in the coverage of fixed charges by earnings (loss) before fixed charges -- -- -- -- (697,988) -- -- ======= ======= ======== ======== ========= ========= ========

- ----------------------------- (1) Dividends on shares of the Series B cumulative convertible preferred stock are used to pay debt service on notes issued by the CNF's Thrift and Stock Plan. (2) Estimate of the interest portion of lease payments. (3) For the year ended December 31, 2001, results included a $652.2 million loss from restructuring charges at Forwarding and Menlo Worldwide Logistics' $47.5 million loss from the business failure of a customer. (4) Preferred stock dividend requirements included in Combined Fixed Charges but not deducted in the determination of Income (Loss) from Continuing Operations Before Income Taxes. EX-23.1 8 a98854exv23w1.txt EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use of our reports dated January 26, 2004, with respect to the consolidated balance sheets of CNF Inc. as of December 31, 2003 and 2002, and the related consolidated statements of operations, shareholders' equity, and cash flows for the years then ended, and the related financial statement schedule, incorporated herein by reference and to the reference to our firm under the heading "Experts" in the Registration Statement and related Prospectus. Our reports refer to the revisions to the 2001 consolidated financial statements to include the transitional disclosures required by Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets, for the change in the method of accounting for goodwill, which was adopted by CNF Inc. as of January 1, 2002, as described in Note 1 to the consolidated financial statements, as well as the adjustments that were applied to restate the disclosures of reportable segments reflected in the 2001 consolidated financial statements to conform to the 2003 and 2002 composition of reportable segments, as discussed in Note 16 to the consolidated financial statements. However, we were not engaged to audit, review, or apply any procedures to the 2001 consolidated financial statements other than with respect to such revisions and adjustments. /s/ KPMG LLP San Francisco, California June 3, 2004 EX-25 9 a98854exv25.txt EXHIBIT 25 EXHIBIT 25 ================================================================================ FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) [ ] --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- CNF Inc. (Exact name of obligor as specified in its charter) Delaware 94-1444798 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 3240 Hillview Avenue Palo Alto, California 94304 (Address of principal executive offices) (Zip code) --------------------------- 6.70% Senior Debentures due 2034 (Title of the indenture securities) ================================================================================ 1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE: (a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.

Name Address ---- ------- Superintendent of Banks of the State of 2 Rector Street, New York, N.Y. New York 10006, and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005

(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS. Yes. 2. AFFILIATIONS WITH OBLIGOR. IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH AFFILIATION. None. 16. LIST OF EXHIBITS. EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) - 2 - 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. - 3 - SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 20th day of May, 2004. THE BANK OF NEW YORK By: /S/ MARY LAGUMINA -------------------------- Name: MARY LAGUMINA Title: VICE PRESIDENT - 4 - EXHIBIT 7 Consolidated Report of Condition of THE BANK OF NEW YORK of One Wall Street, New York, N.Y. 10286 And Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business December 31, 2003, published in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.

Dollar Amounts In Thousands ASSETS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin .................................. $ 3,752,987 Interest-bearing balances .......................... 7,153,561 Securities: Held-to-maturity securities ........................ 260,388 Available-for-sale securities ...................... 21,587,862 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ............. 165,000 Securities purchased under agreements to resell ............................................. 2,804,315 Loans and lease financing receivables: Loans and leases held for sale ..................... 557,358 Loans and leases, net of unearned income ........................................... 36,255,119 LESS: Allowance for loan and lease losses ..................................... 664,233 Loans and leases, net of unearned income and allowance ............................. 35,590,886 Trading Assets ........................................ 4,892,480 Premises and fixed assets (including capitalized leases) ............................................ 926,789 Other real estate owned ............................... 409 Investments in unconsolidated subsidiaries and associated companies ............................... 277,788 Customers' liability to this bank on acceptances outstanding ........................................ 144,025 Intangible assets Goodwill ........................................... 2,635,322 Other intangible assets ............................ 781,009

Other assets .............................................. 7,727,722 ----------- Total assets .............................................. $89,257,901 =========== LIABILITIES Deposits: In domestic offices .................................... $33,763,250 Noninterest-bearing .................................... 14,511,050 Interest-bearing ....................................... 19,252,200 In foreign offices, Edge and Agreement subsidiaries, and IBFs ............................... 22,980,400 Noninterest-bearing .................................... 341,376 Interest-bearing ....................................... 22,639,024 Federal funds purchased and securities sold under agreements to repurchase Federal funds purchased in domestic offices .............................................. 545,681 Securities sold under agreements to repurchase ........................................... 695,658 Trading liabilities ....................................... 2,338,897 Other borrowed money: (includes mortgage indebtedness and obligations under capitalized leases) .............................. 11,078,363 Bank's liability on acceptances executed and outstanding ............................................ 145,615 Subordinated notes and debentures ......................... 2,408,665 Other liabilities ......................................... 6,441,088 ----------- Total liabilities ......................................... $80,397,617 =========== Minority interest in consolidated subsidiaries ........................................... 640,126 EQUITY CAPITAL Perpetual preferred stock and related surplus ................................................ 0 Common stock .............................................. 1,135,284 Surplus ................................................... 2,077,255 Retained earnings ......................................... 4,955,319 Accumulated other comprehensive income .................... 52,300 Other equity capital components ........................... 0 ----------- Total equity capital ...................................... 8,220,158 ----------- Total liabilities minority interest and equity capital..... $89,257,901 =========== - 6 - I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-named bank do hereby declare that this Report of Condition is true and correct to the best of my knowledge and belief. Thomas J. Mastro, Senior Vice President and Comptroller We, the undersigned directors, attest to the correctness of this statement of resources and liabilities. We declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions and is true and correct. Thomas A. Renyi Gerald L. Hassell Directors Alan R. Griffith - 7 - EX-99.4 10 a98854exv99w4.htm EXHIBIT 99.4

EXHIBIT 99.4

LETTER OF TRANSMITTAL

CNF Inc.

Offer for All Outstanding

6.70% Senior Debentures due 2034

in Exchange for

6.70% Senior Debentures due 2034

Which Have Been Registered Under

the Securities Act of 1933, As Amended,

Pursuant to the Prospectus dated                             , 2004

THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                         , 2004, UNLESS EXTENDED (THE “EXPIRATION DATE”). TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

Deliver to:     The Bank of New York, Exchange Agent

By Facsimile:	By Registered or Certified Mail:	By Hand or Overnight Delivery:
(212) 298-1915 Attention: Reorganization Unit Confirm by Telephone: (212) 815-	The Bank of New York Corporate Trust Operation Reorganization Unit 101 Barclay Street — 7 East New York, NY 10286 Attention:	The Bank of New York Corporate Trust Operation Reorganization Unit 101 Barclay Street — 7 East New York, NY 10286 Attention:

Delivery of this instrument to an address other than as set forth above, or transmission of instructions via facsimile to a number other than as set forth above, will not constitute a valid delivery.

      The undersigned acknowledges that he or she has received and reviewed the prospectus dated                     , 2004 (the “Prospectus”), of CNF Inc., a Delaware corporation (“CNF”), and this Letter of Transmittal (the “Letter of Transmittal”), which together constitute CNF’s offer (the “Exchange Offer”), to exchange an aggregate principal amount of up to $300.0 million of its 6.70% Senior Debentures due 2034 which have been registered under the Securities Act of 1933, as amended, (individually a “Debenture” and collectively, the “Debentures”), for a like principal amount at maturity of CNF’s issued and outstanding 6.70% Senior Debentures due 2034 (individually an “Old Debenture” and collectively, the “Old Debentures”) from the registered holders thereof. Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Prospectus.

      For each Old Debenture accepted for exchange, the holder of such Old Debenture will receive a New Debenture having a principal amount equal to the principal amount at maturity of the surrendered Old Debenture. The New Debentures will bear interest from the most recent date to which interest has been paid on the Old Debentures, or if no interest has been paid, from                     , 2004. Accordingly, registered holders of New Debentures on the relevant record date for the first interest payment date following the consummation of the Exchange Offer will receive interest accruing from the most recent date to which interest has been paid on the Old Debentures. The Old Debentures accepted for exchange will cease to accrue interest from and after the date of consummation of the Exchange Offer. Holders of Old Debentures whose Old Debentures are accepted for exchange will not receive any payment in respect of accrued interest on such Old Debentures otherwise payable on any interest payment date the record date for which occurs on or after the consummation of the Exchange Offer.

      This Letter of Transmittal is to be completed by a holder of Old Debentures either if certificates for such Old Debentures are to be forwarded herewith or if a tender is to be made by book-entry transfer to the account maintained by the Exchange Agent at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in “The Exchange Offer-Book-Entry Transfers” section of the Prospectus and an Agent’s Message is not delivered. HOLDERS OF OLD DEBENTURES WHO HAVE PREVIOUSLY VALIDLY DELIVERED A LETTER OF TRANSMITTAL IN CONJUNCTION WITH A VALID TENDER OF OLD DEBENTURES FOR EXCHANGE PURSUANT TO THE PROCEDURES DESCRIBED IN THE PROSPECTUS UNDER THE HEADING “THE EXCHANGE OFFER” ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION TO RECEIVE NEW DEBENTURES. HOLDERS OF OLD DEBENTURES WHO HAVE PREVIOUSLY VALIDLY TENDERED OLD DEBENTURES FOR EXCHANGE OR WHO VALIDLY TENDER OLD DEBENTURES FOR EXCHANGE IN ACCORDANCE WITH THIS LETTER OF TRANSMITTAL MAY WITHDRAW ANY OLD DEBENTURES SO TENDERED AT ANY TIME PRIOR TO THE EXPIRATION DATE. SEE THE PROSPECTUS UNDER THE HEADING “THE EXCHANGE OFFER” FOR A MORE COMPLETE DESCRIPTION OF THE TENDER AND WITHDRAWAL PROVISIONS. Tenders by book-entry transfer also may be made by delivering an Agent’s Message in lieu of this Letter of Transmittal. The term “Agent’s Message” means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation (as defined below), which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by this Letter of Transmittal and that CNF may enforce this Letter of Transmittal against such participant. Holders of Old Debentures whose certificates are not immediately available, or who are unable to deliver their certificates or confirmation of the book-entry tender of their Old Debentures into the Exchange Agent’s account at DTC (a “Book-Entry Confirmation”) and all other documents required by this Letter of Transmittal to the Exchange Agent on or prior to the Expiration Date, must tender their Old Debentures according to the guaranteed delivery procedures set forth in “The Exchange Offer-Guaranteed Delivery Procedures” section of the Prospectus. See Instruction 1.

      DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

      The method of delivery of Old Debentures, Letters of Transmittal and all other required documents are at the election and risk of the holders. If such delivery is by mail it is recommended that registered mail properly insured, with return receipt requested, be used. In all cases, sufficient time should be allowed to assure timely delivery. No Letters of Transmittal or Old Debentures should be sent to CNF.

      The undersigned has completed the appropriate boxes below and signed this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer.

2

      List below the Old Debentures to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount at maturity of Old Debentures should be listed on a separate signed schedule affixed hereto.

DESCRIPTION OF OLD DEBENTURES	1	2	3
		Aggregate
		Principal	Principal
Name(s) and Address(es) of Registered Holder(s)	Certificate	Amount of	Amount
(Please fill in, if blank)	Number(s)*	Old Debenture(s)	Tendered**
	Total
* Need not be completed if Old Debentures are being tendered by book-entry transfer.
** Unless otherwise indicated in this column, a holder will be deemed to have tendered ALL of the Old Debentures represented by the Old Debentures indicated in column 2. See Instruction 2. Old Debentures tendered hereby must be in denominations of principal amount of $1,000 and any integral multiple thereof. See Instruction 1.

o CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:

Name of Tendering Institution

Account Number

Transaction Code Number

      By crediting the Old Debentures to the Exchange Agent’s account at DTC using the Automated Tender Offer Program (“ATOP”) and by complying with applicable ATOP procedures with respect to the Exchange Offer, including transmitting to the Exchange Agent an Agent’s Message in which the holder of the Old Debentures acknowledges and agrees to be bound by the terms of, and makes the representations and warranties contained in, this Letter of Transmittal, the participant in DTC confirms on behalf of itself and the beneficial owners of such Old Debentures all provisions of this Letter of Transmittal (including all representations and warranties) applicable to it and such beneficial owner as fully as if it had completed the information required herein and executed and transmitted this Letter of Transmittal to the Exchange Agent.

3

o CHECK HERE IF TENDERED OLD DEBENTURES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s)

Window Ticket Number (if any)

Date of Execution of Notice of Guaranteed Delivery 

Name of Institution Which Guaranteed Delivery

If Delivered by Book-Entry Transfer, Complete the Following:

Account Number 

Transaction Code Number 

Name of Tendering Institution 

o CHECK HERE IF TENDERED OLD DEBENTURES ARE ENCLOSED HEREWITH.

o CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name: 

Address: 

      If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Debentures. If the undersigned is a broker-dealer that will receive New Debentures for its own account in exchange for Old Debentures that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a copy of the Prospectus in connection with any resale of such New Debentures; however, by so acknowledging and by delivering such Prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

4

PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

Ladies and Gentlemen:

      Upon the terms and subject to the conditions of the Exchange Offer, the undersigned hereby tenders to CNF the aggregate principal amount at maturity of Old Debentures indicated above. Subject to, and effective upon, the acceptance for exchange of the Old Debentures tendered hereby, the undersigned hereby sells, assigns and transfers to, or upon the order of, CNF all right, title and interest in and to such Old Debentures as are being tendered hereby.

      The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as the undersigned’s true and lawful agent and attorney-in-fact with respect to such tendered Old Debentures, with full power of substitution, among other things, to cause the Old Debentures to be assigned, transferred and exchanged. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Debentures, and to acquire New Debentures issuable upon the exchange of such tendered Old Debentures, and that, when the same are accepted for exchange, CNF will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim when the same are accepted by CNF. The undersigned hereby further represents that any New Debentures acquired in exchange for Old Debentures tendered hereby will have been acquired in the ordinary course of business of the person receiving such New Debentures, whether or not such person is the undersigned, that neither the Holder of such Old Debentures nor any such other person is participating in, intends to participate in or has an arrangement or understanding with any person to participate in the distribution of such New Debentures and that neither the holder of such Old Debentures nor any such other person is an “affiliate,” as defined in Rule 405 under the Securities Act, of CNF.

      The undersigned acknowledges that this Exchange Offer is being made in reliance on interpretations by the staff of the Securities and Exchange Commission (the “SEC”), as set forth in no-action letters issued to third parties, that the New Debentures issued pursuant to the Exchange Offer in exchange for the Old Debentures may be offered for resale, resold and otherwise transferred by holders thereof (other than any such holder that is an “affiliate” of CNF within the meaning of Rule 405 under the Securities Act), without compliance with the registration and prospectus delivery provisions of the Securities Act, provided that such New Debentures are acquired in the ordinary course of such holders’ business, such holders are not holding any Old Debentures that have the status of, or are reasonably likely to have the status of, an unsold allotment in the initial offering, and such holders have no arrangement with any person to participate in the distribution of such New Debentures. However, the SEC has not considered the Exchange Offer in the context of a no-action letter and there can be no assurance that the staff of the SEC would make a similar determination with respect to the Exchange Offer as in other circumstances. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Debentures and has no arrangement or understanding to participate in a distribution of New Debentures. If any holder is an affiliate of CNF, is engaged in or intends to engage in or has any arrangement or understanding with respect to the distribution of the New Debentures to be acquired pursuant to the Exchange Offer, such holder (i) could not rely on the applicable interpretations of the staff of the SEC and (ii) must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. If the undersigned is a broker-dealer that will receive New Debentures for its own account in exchange for Old Debentures, it represents that the Old Debentures to be exchanged for the New Debentures were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a copy of the Prospectus in connection with any resale of such New Debentures; however, by so acknowledging and by delivering such Prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.

      The undersigned will, upon request, execute and deliver any additional documents deemed by CNF to be necessary or desirable to complete the sale, assignment and transfer of the Old Debentures tendered hereby. All authority conferred or agreed to be conferred in this Letter of Transmittal and every obligation of the undersigned hereunder shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of the undersigned and shall not be affected by, and shall survive, the death or incapacity of the undersigned. This tender may be withdrawn only in accordance with the procedures set forth in “The Exchange Offer — Withdrawal Rights” section of the Prospectus.

5

      Unless otherwise indicated herein in the box entitled “Special Issuance Instructions” below, please deliver the New Debentures (and, if applicable, substitute certificates representing Old Debentures for any Old Debentures not exchanged) in the name of the undersigned or, in the case of a book-entry delivery of Old Debentures, please credit the account indicated above maintained at DTC. Similarly, unless otherwise indicated under the box entitled “Special Delivery Instructions” below, please send the New Debentures (and, if applicable, substitute certificates representing Old Debentures for any Old Debentures not exchanged) to the undersigned at the address shown above in the box entitled “Description of Old Debentures.”

      THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED “DESCRIPTION OF OLD DEBENTURES” ABOVE AND SIGNING THIS LETTER OF TRANSMITTAL, WILL BE DEEMED TO HAVE TENDERED THE OLD DEBENTURES AS SET FORTH IN SUCH BOX ABOVE.

SPECIAL ISSUANCE INSTRUCTIONS

(See Instructions 3 and 4)

   To be completed ONLY if certificates for Old Debentures not exchanged and/or New Debentures are to be issued in the name of someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above, or if Old Debentures delivered by book-entry transfer which are not accepted for exchange are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.

Issue: New Debentures and/or Old Debentures to:

Name(s)

(Please Type or Print)

(Please Type or Print)

Address

(Zip Code)

(Complete Substitute Form W-9)

o  Credit unexchanged Old Debentures delivered by book-entry transfer to the Book-Entry Transfer Facility account set forth below.

(Book-Entry Transfer Facility

Account Number, if applicable)

SPECIAL DELIVERY INSTRUCTIONS

(See Instructions 3 and 4)

   To be completed ONLY if certificates for Old Debentures not exchanged and/or New Debentures are to be sent to someone other than the person or persons whose signature(s) appear(s) on this Letter of Transmittal above or to such person or persons at an address other than shown in the box entitled “Description of Old Debentures” on this Letter of Transmittal above.

Mail: New Debentures and/or Old Debentures to:

Name(s)

(Please Type or Print)

(Please Type or Print)

Address

(Zip Code)

IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF OR AN AGENT’S MESSAGE IN LIEU THEREOF (TOGETHER WITH THE CERTIFICATES FOR OLD DEBENTURES OR A BOOK-ENTRY CONFIRMATION AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY) MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

6

PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL

CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.

IN ORDER TO VALIDLY TENDER OLD DEBENTURES FOR EXCHANGE, HOLDERS OF OLD

DEBENTURES MUST COMPLETE, EXECUTE, AND DELIVER THIS LETTER OF TRANSMITTAL.

      Except as stated in the Prospectus, all authority herein conferred or agreed to be conferred shall survive the death, incapacity, or dissolution of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. See Instruction 10.

PLEASE SIGN HERE

(TO BE COMPLETED BY ALL TENDERING HOLDERS)

(Complete Accompanying Substitute Form W-9 on reverse side)

X X  (Signature(s) of Owner) -----------------------------, 2004
-----------------------------, 2004
(Date)

Area Code and Telephone Number: 

      This Letter must be signed by the registered holder(s) as the name(s) appear(s) on the certificate(s) for the Old Debentures hereby tendered or on a security position, on listing or by any person(s) authorized to become registered holder(s) by endorsements and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, officer or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3.

Name(s):

_____________________________________________________________________

(Please Type or Print)

Capacity:

_____________________________________________________________________

Address:

_____________________________________________________________________

(Including Zip Code)

Principal place of business (if different from address listed above): 

(Including Zip Code)

Area Code and Telephone Number: 

Tax Identification or Social Security Nos.: 

SIGNATURE GUARANTEE

(If required by Instruction 3)

Signature(s) Guaranteed by

an Eligible Institution: 

(Authorized Signature)

(Title)

(Name and Firm)

Dated: ______________________________, 2004

7

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE

EXCHANGE OFFER FOR THE

6.70% SENIOR DEBENTURES DUE 2034

IN EXCHANGE FOR THE

6.70% SENIOR DEBENTURES DUE 2034

WHICH HAVE BEEN REGISTERED UNDER

THE SECURITIES ACT OF 1933, AS AMENDED,

PURSUANT TO THE PROSPECTUS

Dated                     , 2004

1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND DEBENTURES; GUARANTEED DELIVERY PROCEDURES.

      This Letter of Transmittal is to be completed by holders of Old Debentures either if certificates are to be forwarded herewith or if tenders are to be made pursuant to the procedures for delivery by book-entry transfer set forth in “The Exchange Offer — Book-Entry Transfers” section of the Prospectus and an Agent’s Message is not delivered. Tenders by book-entry transfer also may be made by delivering an Agent’s Message in lieu of this Letter of Transmittal. The term “Agent’s Message” means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by, and makes the representations and warranties contained in, the Letter of Transmittal and that CNF may enforce the Letter of Transmittal against such participant. Certificates for all physically tendered Old Debentures, or Book-Entry Confirmation, as the case may be, as well as a properly completed and duly executed Letter (or manually signed facsimile hereof or Agent’s Message in lieu thereof) and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at the address set forth herein prior to the Expiration Date, or the tendering holder must comply with the guaranteed delivery procedures set forth below. Old Debentures tendered hereby must be in denominations of principal amount at maturity of $1,000 and any integral multiple thereof.

      Holders whose certificates for Old Debentures are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent before the Expiration Date, or who cannot complete the procedure for book-entry transfer on a timely basis, may tender their Old Debentures pursuant to the guaranteed delivery procedures set forth in “The Exchange Offer Guaranteed Delivery Procedures” section of the Prospectus. Pursuant to such procedures, (i) such tender must be made through an Eligible Institution, (ii) prior to 5:00 p.m., New York City time, on the Expiration Date, the Exchange Agent must receive from such Eligible Institution a properly completed and duly executed Letter (or a facsimile thereof) and Notice of Guaranteed Delivery, substantially in the form provided by CNF (by facsimile transmission, mail or hand delivery), setting forth the name and address of the holder of Old Debentures and the amount of Old Debentures tendered, stating that the tender is being made thereby and guaranteeing that within three New York Stock Exchange (“NYSE”) trading days after the date of execution of the Notice of Guaranteed Delivery, the certificates for all physically tendered Old Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and any other documents required by this Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent, and (iii) the certificates for all physically tendered Old Debentures, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, together with a properly completed and duly executed Letter (or facsimile thereof or Agent’s Message in lieu thereof) with any required signature guarantees and all other documents required by this Letter of Transmittal, are received by the Exchange Agent within three NYSE trading days after the Expiration Date.

      THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE OLD DEBENTURES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF THE TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF OLD DEBENTURES ARE SENT BY MALL, IT IS SUGGESTED THAT THE MAILING BE REGISTERED MAIL, PROPERLY INSURED, WITH RETURN

8

RECEIPT REQUESTED, MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

      See “The Exchange Offer” section of the Prospectus.

2. PARTIAL TENDERS (NOT APPLICABLE TO DEBENTURE HOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER).

      If less than all of the Old Debentures evidenced by a submitted certificate are to be tendered, the tendering holder(s) should fill in the aggregate principal amount at maturity of Old Debentures to be tendered in the box above entitled “Description of Old Debentures — Principal Amount at Maturity Tendered.” A reissued certificate representing the balance of non tendered Old Debentures will be sent to such tendering holder, unless otherwise provided in the appropriate box on this Letter of Transmittal, promptly after the Expiration Date. All of the Old Debentures delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated.

3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; GUARANTEE OF SIGNATURES.

      If this Letter of Transmittal is signed by the Holder of the Old Debentures tendered hereby, the signature must correspond exactly with the name as written on the face of the certificates or on DTC’s security position listing as the holder of such Old Debentures without any change whatsoever.

      If any tendered Old Debentures are owned of record by two or more joint owners, all of such owners must sign this Letter of Transmittal.

      If any tendered Old Debentures are registered in different names on several certificates, it will be necessary to complete, sign and submit as many separate copies of this Letter of Transmittal as there are different registrations of certificates.

      When this Letter of Transmittal is signed by the registered holder or holders of the Old Debentures specified herein and tendered hereby, no endorsements of certificates or separate bond powers are required. If, however, the New Debentures are to be issued, or any untendered Old Debentures are to be reissued, to a person other than the registered holder, then endorsements of any certificates transmitted hereby or separate bond powers are required. Signatures on such certificate(s) must be guaranteed by a participant in a securities transfer association recognized signature program.

      If this Letter of Transmittal is signed by a person other than the registered holder or holders of any certificate(s) specified herein, such certificate(s) must be endorsed or accompanied by appropriate bond powers, in either case signed exactly as the name or names of the registered holder or holders appear(s) on the certificate(s) and signatures on such certificate(s) must be guaranteed by an Eligible Institution.

      If this Letter of Transmittal or any certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by CNF, proper evidence satisfactory to CNF of their authority to so act must be submitted.

      ENDORSEMENTS ON CERTIFICATES FOR OLD DEBENTURES OR SIGNATURES ON BOND POWERS REQUIRED BY THIS INSTRUCTION 3 MUST BE GUARANTEED BY A FIRM WHICH IS A FINANCIAL INSTITUTION (INCLUDING MOST BANKS, SAVINGS AND LOAN ASSOCIATIONS AND BROKERAGE HOUSES) THAT IS A PARTICIPANT IN THE SECURITIES TRANSFER AGENTS MEDALLION PROGRAM, THE NEW YORK STOCK EXCHANGE MEDALLION SIGNATURE PROGRAM OR THE STOCK EXCHANGES MEDALLION PROGRAM (EACH AN “ELIGIBLE INSTITUTION”).

      SIGNATURES ON THIS LETTER OF TRANSMITTAL NEED NOT BE GUARANTEED BY AN ELIGIBLE INSTITUTION, PROVIDED THE OLD DEBENTURES ARE TENDERED: (I) BY A REGISTERED HOLDER OF OLD DEBENTURES (WHICH TERM, FOR PURPOSES OF THE EXCHANGE OFFER, INCLUDES ANY PARTICIPANT IN DTC’S SYSTEM WHOSE NAME APPEARS ON A

9

SECURITY POSITION LISTING AS THE HOLDER OF SUCH OLD DEBENTURES) WHO HAS NOT COMPLETED THE BOX ENTITLED “SPECIAL ISSUANCE INSTRUCTIONS” OR “SPECIAL DELIVERY INSTRUCTIONS” ON THIS LETTER OF TRANSMITTAL, OR (II) FOR THE ACCOUNT OF AN ELIGIBLE INSTITUTION.

4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS.

      Tendering holders of Old Debentures should indicate in the applicable box the name and address to which New Debentures issued pursuant to the Exchange Offer and/or substitute certificates evidencing Old Debentures not exchanged are to be issued or sent, if different from the name or address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification or social security number of the person named also must be indicated. Debenture holders tendering Old Debentures by book-entry transfer may request that Old Debentures not exchanged be credited to such account maintained at DTC as such note holder may designate hereon. If no such instructions are given, such Old Debentures not exchanged will be returned to the name and address of the person signing this Letter of Transmittal.

5. TAXPAYER IDENTIFICATION NUMBER AND BACKUP WITHHOLDING.

      Federal income tax law generally requires that a tendering holder whose Old Debentures are accepted for exchange must provide the Exchange Agent (as payor) with such holder’s correct Taxpayer Identification Number (a “TIN”), which, in the case of a holder who is an individual, is such holder’s social security number. If the Exchange Agent is not provided with the correct TIN or an adequate basis for an exemption, such holder may be subject to a $50 penalty imposed by the Internal Revenue Service and backup withholding in an amount equal to the applicable rate of the amount of any reportable payments made after the exchange to such tendering holder. If withholding results in an overpayment of taxes, a refund may be obtained.

      To prevent backup withholding, each tendering holder must provide such holder’s correct TIN by completing the “Form W-9” set forth herein, certifying that the TIN provided is correct (or that such holder is awaiting a TIN) and that (i) the holder is exempt from backup withholding, (ii) the holder has not been notified by the Internal Revenue Service that such holder is subject to backup withholding as a result of a failure to report all interest or dividends or (iii) the Internal Revenue Service has notified the holder that such holder is no longer subject to backup withholding.

      If the holder does not have a TIN, such holder should consult the enclosed Form W-9 Specific Instructions (the “W-9 Specific Instructions”) for instructions on applying for a TIN and apply for and receive a TIN prior to submitting the Form W-9. If the holder does not provide such holder’s TIN to the Exchange Agent by the time of payment, backup withholding will begin and continue until the holder furnishes the holder’s TIN to the Exchange Agent.

      If the Old Debenture is held in more than one name or is not in the name of the actual owner, consult the W-9 Specific Instructions for information on which TIN to report.

      Exempt holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. To prevent possible erroneous backup withholding, an exempt holder should check the “Exempt from backup withholding” box on the Form W-9. See the W-9 Specific Instructions for additional instructions. In order for a nonresident alien or foreign entity to qualify as exempt, such person must submit an appropriate and properly completed Form W-8BEN, W-8ECI, W-8EXP or W-8IMY, “Certificate of Foreign Status,” as the case may be, signed under penalties of perjury attesting to such exempt status. Such form may be obtained from the Exchange Agent or the IRS at its internet website: www.irs.gov.

      CNF reserves the right in its sole discretion to take whatever steps are necessary to comply with CNF’s obligations regarding backup withholding.

6. TRANSFER TAXES.

      CNF will pay all transfer taxes, if any, applicable to the transfer of Old Debentures to it or its order pursuant to the Exchange Offer. If, however, New Debentures and/or substitute Old Debentures not exchanged are to be delivered to, or are to be registered or issued in the name of, any person other than the registered holder of the Old Debentures tendered hereby, or if tendered Old Debentures are registered in the name of any person other than the

10

person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the transfer of Old Debentures to CNF or its order pursuant to the Exchange Offer, the amount of any such transfer taxes (whether imposed on the registered holder or any other persons) will be payable by the tendering holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted herewith, the amount of such transfer taxes will be billed directly to such tendering holder. EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR TRANSFER TAX STAMPS TO BE AFFIXED TO THE OLD DEBENTURES SPECIFIED IN THIS LETTER OF TRANSMITTAL.

7. WAIVER OF CONDITIONS.

      CNF reserves the right (in its reasonable discretion) to waive satisfaction of any or all conditions enumerated in the Prospectus.

8. NO CONDITIONAL TENDERS; DEFECTS.

      No alternative, conditional, irregular or contingent tenders will be accepted. All tendering holders of Old Debentures, by execution of this Letter of Transmittal or an Agent’s Message in lieu thereof, shall waive any right to receive notice of the acceptance of their Old Debentures for exchange.

      Neither CNF, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Old Debentures nor shall any of them incur any liability for failure to give any such notice.

9. MUTILATED, LOST, STOLEN OR DESTROYED OLD DEBENTURES.

      Any holder whose Old Debentures have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions.

10. WITHDRAWAL RIGHTS.

      Tenders of Old Debentures may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

      For a withdrawal of a tender of Old Debentures to be effective, a written notice of withdrawal must be received by the Exchange Agent at the address set forth above prior to 5:00 p.m., New York City time, on the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having tendered the Old Debentures to be withdrawn (the “Depositor”), (ii) identify the Old Debentures to be withdrawn (including certificate number or numbers and the principal amount at maturity of such Old Debentures), (iii) contain a statement that such holder is withdrawing such holder’s election to have such Old Debentures exchanged, (iv) be signed by the holder in the same manner as the original signature on the Letter of Transmittal by which such Old Debentures were tendered (including any required signature guarantees) or be accompanied by documents of transfer to have the Trustee with respect to the Old Debentures register the transfer of such Old Debentures in the name of the person withdrawing the tender and (v) specify the name in which such Old Debentures are registered, if different from that of the Depositor. If Old Debentures have been tendered pursuant to the procedure for book-entry transfer set forth in “The Exchange Offer — Book-Entry Transfers” section of the Prospectus, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Old Debentures and otherwise comply with the procedures of such facility. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by CNF, whose determination shall be final and binding on all parties. Any Old Debentures so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the Exchange Offer and no New Debentures will be issued with respect thereto unless the Old Debentures so withdrawn are validly retendered. Any Old Debentures that have been tendered for exchange but which are not exchanged for any reason will be returned to the holder thereof without cost to such holder (or, in the case of Old Debentures tendered by book-entry transfer into the Exchange Agent’s account at DTC pursuant to the book-entry transfer procedures set forth in “The Exchange Offer — Book-Entry Transfers” section of the Prospectus, such Old Debentures will be credited to an account maintained with DTC for the Old Debentures) as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Debentures may be retendered by following the procedures described above at any time prior to 5:00 p.m., New York City time, on the Expiration Date.

11

11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.

      Questions relating to the procedure for tendering, as well as requests for additional copies of the Prospectus and this Letter of Transmittal, and requests for Notices of Guaranteed Delivery and other related documents may be directed to the Exchange Agent, at the address and telephone number indicated above.

12

TO BE COMPLETED BY ALL TENDERING HOLDERS OF OLD DEBENTURES

(SEE INSTRUCTION 5)

PAYOR’S NAME: The Bank of New York
SUBSTITUTE FORM W-9	Part I — PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	--------------------------------------- Social Security Number OR Employer Identification Number

Department of the Treasury Internal Revenue Service	Part II — FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING (See Instructions)
Payor’s Request for Taxpayer Identification Number (TIN)
Part III — Certification — Under penalties of perjury, I certify that: (1) The number shown on this form is my correct TIN (or I am waiting for a number to be issued to me) and (2) I am not subject to backup withholding because (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (the “IRS”) that I am subject to backup withholding as a result of a failure to report all interest or dividends or (c) the IRS has notified me that I am no longer subject to backup withholding, and (3) I am a U.S. person (including U.S. resident alien). The IRS does not require your consent to any provision of this document other than the certifications required of avoid backup withholding.
Signature:		Date:
You must cross out item (2) in Part 3 above if you have been notified by the IRS that you are currently subject to backup withholding because of underreporting interest or dividends on your tax return.

YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU

WROTE “APPLIED FOR” IN PART 1 OF THE SUBSTITUTE FORM W-9.

CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER

      I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and that I mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I intend to mail or deliver an application in the near future). I understand that if I do not provide a taxpayer identification number to the Payor within 60 days, the Payor is required to withhold at the applicable rate of all cash payments made to me thereafter until I provide a number.

Signature ________________________________________________  Date 

NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND IN BACKUP WITHHOLDING AT THE APPLICABLE RATE OF ANY CASH PAYMENTS. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

13

      Manually signed copies of the Letter of Transmittal will be accepted. The Letter of Transmittal and any other required documents should be sent or delivered by each holder or such holder’s broker, dealer commercial bank or other nominee to the Exchange Agent at one of the addresses set forth below.

The Exchange Agent for the Exchange Offer is:

The Bank of New York

By Mail, Hand, or Overnight Delivery:

The Bank of New York

Corporate Trust Operations

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

Attention:                     

By Facsimile:

(212) 298-1915

Confirm by Telephone:

(212) 815-          

Attention:                     

14 EX-99.5 11 a98854exv99w5.htm EXHIBIT 99.5

EXHIBIT 99.5

NOTICE OF GUARANTEED DELIVERY

for

CNF INC.

      This form or one substantially equivalent hereto must be used to accept the Exchange Offer of CNF Inc. (“CNF”) made pursuant to the prospectus dated                     , 2004 (the “Prospectus”), if certificates for the outstanding 6.70% Senior Debentures due 2034 of CNF (the “Old Debentures”) are not immediately available or if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach The Bank of New York, as exchange agent (the “Exchange Agent”) prior to 5:00 p.m., New York City time, on the Expiration Date of the Exchange Offer. Such form may be delivered or transmitted by facsimile transmission, mail or hand delivery to the Exchange Agent as set forth below. In addition, in order to utilize the guaranteed delivery procedure to tender Old Debentures pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal (or facsimile thereof) must be received by the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date. Capitalized terms not defined herein are defined in the Prospectus.

Delivery To:     The Bank of New York, Exchange Agent

By Mail, Overnight Courier or Hand Delivery:

The Bank of New York

Corporate Trust Operation

Reorganization Unit

101 Barclay Street — 7 East

New York, NY 10286

Attention:

By Facsimile Transmission:

(for Eligible Institutions Only)

(212) 298-1915

Attention:

Reorganization Unit

Confirm by Telephone:

(212) 815-          

      DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE, OR TRANSMISSION OF THIS INSTRUMENT VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.

Ladies and Gentlemen:

      Upon the terms and conditions set forth in the Prospectus, the undersigned hereby tenders to CNF the principal amount of Old Debentures set forth below pursuant to the guaranteed delivery procedure described in “The Exchange Offer — Guaranteed Delivery Procedures” section of the Prospectus.

Principal Amount of Old Debentures Tendered:*

$ Certificate Nos. (if available):
Total Principal Amount Represented by Old Debentures Certificate(s): $	If Old Debentures will be delivered by book-entry transfer to The Depository Trust Company, provide account number. Account Number

      All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

PLEASE SIGN HERE

X
X
Signature(s) of Owner(s) or Authorized Signatory	Date

Area Code and Telephone Number: 

          Must be signed by the holder(s) of Old Debentures as their name(s) appear(s) on certificates for Old Debentures or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below.

Please print name(s) and address(es)

Name(s):

Capacity:

Address(es): 

*  Must be in denominations of principal amount of $1,000 and any integral multiple thereof.

2

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, a financial institution (including most banks, savings and loan associations and brokerage houses) that is a participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or the Stock Exchanges Medallion Program, hereby guarantees that the certificates representing the principal amount of Old Debentures tendered hereby in proper form for transfer, or timely confirmation of the book-entry transfer of such Old Debentures into the Exchange Agent’s account at The Depository Trust Company pursuant to the procedures set forth in “The Exchange Offer — Guaranteed Delivery Procedures” section of the Prospectus, together with one or more properly completed and duly executed Letters of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof) and any required signature guarantee and any other documents required by the Letter of Transmittal, will be received by the Exchange Agent at the address set forth above, no later than three New York Stock Exchange trading days after the Expiration Date.

Name of Firm	----------------------------------------------- Authorized Signature
Address	----------------------------------------------- Title
Zip Code	Name: ----------------------------------------------- (Please Type or Print)
Area Code and Tel. No.	Dated:

NOTE: DO NOT SEND CERTIFICATES FOR OLD DEBENTURES WITH THIS FORM. CERTIFICATES FOR OLD DEBENTURES SHOULD BE SENT ONLY WITH A COPY OF YOUR PREVIOUSLY EXECUTED LETTER OF TRANSMITTAL.

3 EX-99.6 12 a98854exv99w6.htm EXHIBIT 99.6

EXHIBIT 99.6

CNF Inc.

Offer for All Outstanding

6.70% Senior Debentures due 2034

in Exchange for

6.70% Senior Debentures due 2034

Which Have Been Registered Under

the Securities Act of 1933, As Amended

                    , 2004

To Our Clients:

      Enclosed for your consideration is a prospectus dated                     , 2004 (the “Prospectus”), and the related letter of transmittal (the “Letter of Transmittal”), relating to the offer (the “Exchange Offer”) of CNF Inc. (“CNF”) to exchange its 6.70% Senior Debentures due 2034 which have been registered under the Securities Act of 1933, as amended (the “New Debentures”), for its outstanding 6.70% Senior Debentures due 2034 (the “Old Debentures”), upon the terms and subject to the conditions described in the Prospectus and the Letter of Transmittal. Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Prospectus.

      This material is being forwarded to you as the beneficial owner of the Old Debentures held by us for your account but not registered in your name. A TENDER OF SUCH OLD DEBENTURES MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS.

      Accordingly, we request instructions as to whether you wish us to tender on your behalf the Old Debentures held by us for your account, pursuant to the terms and conditions set forth in the enclosed Prospectus and Letter of Transmittal.

      Your instructions should be forwarded to us as promptly as possible in order to permit us to tender the Old Debentures on your behalf in accordance with the provisions of the Exchange Offer. The Exchange Offer will expire at 5:00 p.m., New York City time, on                     , 2004 unless extended by CNF. Any Old Debentures tendered pursuant to the Exchange Offer may be withdrawn at any time before the Expiration Date.

      Your attention is directed to the following:

      1. The Exchange Offer is for any and all Old Debentures.

      2. The Exchange Offer is subject to certain conditions set forth in the Prospectus in the section captioned “The Exchange Offer — Conditions to the Exchange Offer.”

      3. Any transfer taxes incident to the transfer of Old Debentures from the holder to CNF will be paid by CNF, except as otherwise provided in the Instructions in the Letter of Transmittal.

      4. The Exchange Offer expires at 5:00 p.m., New York City time, on                     , 2004 unless extended by CNF.

      If you wish to have us tender your Old Debentures, please so instruct us by completing, executing and returning to us the instruction form on the back of this letter. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER OLD DEBENTURES.

INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER

      The undersigned acknowledge(s) receipt of your letter and the enclosed material referred to therein relating to the Exchange Offer made by CNF Inc. with respect to its Old Debentures.

      This will instruct you to tender the Old Debentures held by you for the account of the undersigned, upon and subject to the terms and conditions set forth in the Prospectus and the related Letter of Transmittal.

      Please tender the Old Debentures held by you for my account as indicated below:

6.70% Senior Debentures due 2034 $ _______________ (Aggregate Principal Amount of Old Debentures)

o Please do not tender any Old Debentures held by you for my account.

Dated: ______________________________ , 2004

Signature(s):

Please print name(s) here:

(Print Address(es)):

(Area Code and Telephone Number(s)):

(Tax Identification or Social Security Number(s)):

None of the Old Debentures held by us for your account will be tendered unless we receive written instructions from you to do so. Unless a specific contrary instruction is given in the space provided, your signature(s) hereon shall constitute an instruction to us to tender all the Old Debentures held by us for your account.

2 EX-99.7 13 a98854exv99w7.htm EXHIBIT 99.7

EXHIBIT 99.7

CNF Inc.

Offer for All Outstanding

6.70% Senior Debentures due 2034

in Exchange for

6.70% Senior Debentures due 2034

Which Have Been Registered Under

the Securities Act of 1933, As Amended

, 2004

To  Brokers, Dealers, Commercial Banks,

Trust Companies and Other Nominees:

      CNF Inc. (“CNF”) is offering, upon and subject to the terms and conditions set forth in the prospectus dated                     , 2004 (the “Prospectus”), and the enclosed letter of transmittal (the “Letter of Transmittal”), to exchange (the “Exchange Offer”) an aggregate principal amount of up to $300.0 million of its 6.70% Senior Debentures due 2034 which have been registered under the Securities Act of 1933, as amended, for a like principal amount at maturity of its issued and outstanding 6.70% Senior Debentures due 2034 (the “Old Debentures”). The Exchange Offer is being made in order to satisfy certain obligations of CNF contained in the Exchange and Registration Rights Agreement, dated as of April 30, 2004, by and among CNF, Citigroup Global Markets Inc. and Morgan Stanley & Co. Incorporated, as representatives of the Initial Purchasers referred to therein. Capitalized terms not defined herein shall have the respective meanings ascribed to them in the Prospectus.

      We are requesting that you contact your clients for whom you hold Old Debentures regarding the Exchange Offer. For your information and for forwarding to your clients for whom you hold Old Debentures registered in your name or in the name of your nominee, or who hold Old Debentures registered in their own names, we are enclosing the following documents:

      1. Prospectus dated                     , 2004;

      2. The Letter of Transmittal for your use and for the information of your clients, together with Internal Revenue Service Form W-9 providing information relating to backup United States federal income tax withholding;

      3. A Notice of Guaranteed Delivery to be used to accept the Exchange Offer if certificates for Old Debentures are not immediately available or time will not permit all required documents to reach the Exchange Agent referred to below prior to the Expiration Date (as defined below) or if the procedure for book-entry transfer cannot be completed on a timely basis;

      4. A form of letter which may be sent to your clients for whose account you hold Old Debentures registered in your name or the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Exchange Offer; and

      5. Return envelopes addressed to The Bank of New York, the Exchange Agent for the Exchange Offer.

      YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                     , 2004 UNLESS EXTENDED BY CNF (THE “EXPIRATION DATE”). OLD DEBENTURES TENDERED PURSUANT TO THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.

      To participate in the Exchange Offer, a duly executed and properly completed Letter of Transmittal (or facsimile thereof or Agent’s Message in lieu thereof), with any required signature guarantees and any other required documents, should be sent to the Exchange Agent and certificates representing the Old Debentures, or a timely Book-Entry confirmation of such Old Debentures into the Exchange Agent’s account at The Depository Trust Company, should be delivered to the Exchange Agent, all in accordance with the instructions set forth in the Letter of Transmittal and the Prospectus.

      If a registered holder of Old Debentures desires to tender, but such Old Debentures are not immediately available, or time will not permit such holder’s Old Debentures or other required documents to reach the Exchange Agent before the Expiration Date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected by following the guaranteed delivery procedures described in the Prospectus under “The Exchange Offer — Guaranteed Delivery Procedures.”

      CNF will, upon request, reimburse brokers, dealers, commercial banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding the Prospectus and the related documents to the beneficial owners of Old Debentures held by them as nominee or in a fiduciary capacity. CNF will pay or cause to be paid all stock transfer taxes applicable to the exchange of Old Debentures pursuant to the Exchange Offer, except as set forth in Instruction 6 of the Letter of Transmittal.

      Any inquiry you may have with respect to the Exchange Offer, or requests for additional copies of the enclosed materials, should be directed to The Bank of New York, the Exchange Agent for the Exchange Offer, at its address and telephone number set forth on the front of the Letter of Transmittal.

Very truly yours,

CNF Inc.

      NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF THE COMPANY OR THE EXCHANGE AGENT, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS OR THE LETTER OF TRANSMITTAL.

Enclosures

2 GRAPHIC 14 a98854a9885400.gif GRAPHIC begin 644 a98854a9885400.gif M1TE&.#EAA`!/`/?_````````,P``9@``F0``S```_P`S```S,P`S9@`SF0`S MS``S_P!F``!F,P!F9@!FF0!FS`!F_P"9``"9,P"99@"9F0"9S`"9_P#,``#, M,P#,9@#,F0#,S`#,_P#_``#_,P#_9@#_F0#_S`#__S,``#,`,S,`9C,`F3,` MS#,`_S,S`#,S,S,S9C,SF3,SS#,S_S-F`#-F,S-F9C-FF3-FS#-F_S.9`#.9 M,S.99C.9F3.9S#.9_S/,`#/,,S/,9C/,F3/,S#/,_S/_`#/_,S/_9C/_F3/_ MS#/__V8``&8`,V8`9F8`F68`S&8`_V8S`&8S,V8S9F8SF68SS&8S_V9F`&9F M,V9F9F9FF69FS&9F_V:9`&:9,V:99F:9F6:9S&:9_V;,`&;,,V;,9F;,F6;, MS&;,_V;_`&;_,V;_9F;_F6;_S&;__YD``)D`,YD`9ID`F9D`S)D`_YDS`)DS M,YDS9IDSF9DSS)DS_YEF`)EF,YEF9IEFF9EFS)EF_YF9`)F9,YF99IF9F9F9 MS)F9_YG,`)G,,YG,9IG,F9G,S)G,_YG_`)G_,YG_9IG_F9G_S)G__\P``,P` M,\P`9LP`FL2/]PA4H^&_$ MEX8;JN58&&W.Q'$'0EYA=^M?O9-Q/H;,=&-BE)DI#L1+]V[BS:$!3ZY<5*G" MSIYC^KQ)6"9LKQL;KPQT6V1,UJW+CEW9&[=!TB`7$YW+=R3SBSUE&G?Y'&1Q MTRM=(J]8>_?TD3R_9_]U.7ZX\.\'JT/_KIXB<,3>KTE''WLI^NVBL:N4#/F] M[HOO$56>;RMIU5Y8'.$'D7*X_5=1@*A!A11D#/)'''T'/G1=A%U-U%]N`XHG M&W@C9HA53;_1YZ![@:5XC8)<)3@B>B8VM*%Y)D7W87W[T3FD'N)Y"6$9CZY MD9*8&59A1S*]J=V,6?:X95KT,:G2C3PF)Z9*!JJ99T'A>76G5&5#@W(4 M%)_P[9EHD%("VNB:0:%)4)4'STJJ:X%`6O?IZ\.&RNQBP;9[)Q:YDJLL%7U M^I&<%IH4:)33'L>51LA"*=RRW;YXXJS4.HJKJ0D[E^&_%FF*:L,19ZSQQAQW M[/''((O24$?]<]/N\BSUU5BO3+33"1^=]==($ZUSQV"7 M;;/8(EMM]MI:.S-VR5ZS_37:)Q,D]]5TUVV0VG<#4)VWWASQW3?-?P/NTN`S M%VXX42DCSK+BB^,F.-N01_X=VU1;KFOC6&>N>;>3!^WYY_@F/3KI"7-N\^FH 7:QQZRZRWWG'<+, -----END PRIVACY-ENHANCED MESSAGE-----

EX-1.1

                                                                     EXHIBIT 1.1

                                  $300,000,000
                                    CNF INC.

                        6.70% SENIOR DEBENTURES DUE 2034

                               PURCHASE AGREEMENT

                                                                  April 27, 2004

Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated,
  As representatives of the Initial Purchasers
  named in Schedule I hereto,
c/o      Citigroup Global Markets Inc.
         388 Greenwich Street
         New York, New York  10013

Ladies and Gentlemen:

         CNF Inc., a Delaware corporation (the "Company"), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several parties
named in Schedule I hereto (the "Initial Purchasers"), for whom you (the
"Representatives") are acting as representatives, an aggregate of $300,000,000
principal amount of the Senior Debentures specified above (the "Securities").

1.       The Company represents and warrants to, and agrees with, each of the
Initial Purchasers that:

                  (a)      A preliminary offering memorandum, dated April 26,
         2004 (the "Preliminary Offering Memorandum") and an offering
         memorandum, dated April 27, 2004 (the "Offering Memorandum"), have been
         prepared in connection with the offering of the Securities. Any
         reference to the Preliminary Offering Memorandum or the Offering
         Memorandum shall also be deemed to refer to, and include, all documents
         filed with the United States Securities and Exchange Commission (the
         "Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United
         States Securities Exchange Act of 1934, as amended (the "Exchange
         Act"), on or prior to the date of the Preliminary Offering Memorandum
         or the Offering Memorandum, as the case may be, that are incorporated
         by reference therein; and any reference to the Preliminary Offering
         Memorandum or the Offering Memorandum, as the case may be, as amended
         or supplemented, as of any specified date, shall be deemed to include
         any documents filed with the Commission pursuant to Section 13(a),
         13(c) or 15(d) of the Exchange Act after the date of the Preliminary
         Offering Memorandum or the Offering Memorandum, as the case may be, and
         prior to such specified date that are incorporated by reference
         therein, provided that in any such case is prior to the completion of
         the distribution of the Securities. All documents filed under the
         Exchange Act and incorporated by reference in the Preliminary Offering
         Memorandum or the Offering Memorandum, as the case may



         be, or any amendment or supplement thereto are hereinafter called the
         "Exchange Act Reports." The Preliminary Offering Memorandum, on the
         date thereof, did not contain any untrue statement of a material fact
         or omit to state any material fact required to be stated therein or
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading. On the date
         hereof and at the Time of Delivery (as defined in Section 4(a) hereof),
         the Offering Memorandum did not, and will not (and any amendment or
         supplement thereto, at the date thereof and at the Time of Delivery,
         will not) contain any untrue statement of a material fact or omit to
         state a material fact required to be stated therein or necessary to
         make the statements therein, in the light of the circumstances under
         which they were made, not misleading; provided, however, that the
         foregoing representations and warranties shall not apply to statements
         or omissions in the Preliminary Offering Memorandum or the Offering
         Memorandum or any amendment or supplement thereto made in reliance upon
         and in conformity with information furnished to the Company in writing
         by any Initial Purchaser through either of the Representatives
         expressly for use therein.

                  (b)      The Exchange Act Reports, when they were filed with
         the Commission, conformed in all material respects to the requirements
         of the Exchange Act, and none of such documents contained an untrue
         statement of a material fact or omitted to state a material fact
         necessary to make the statements therein, in the light of the
         circumstances under which they were made, not misleading; and any
         further Exchange Act Reports incorporated by reference in the Offering
         Memorandum, when such documents are filed with the Commission, will
         conform in all material respects to the requirements of the Exchange
         Act, and will not contain an untrue statement of a material fact or
         omit to state a material fact necessary to make the statements therein,
         in the light of the circumstances under which they were made, not
         misleading.

                  (c)      The Company is a corporation duly organized, validly
         existing and in good standing under the laws of the State of Delaware
         with corporate power and corporate authority under such laws to own,
         lease and operate its properties and conduct its business as described
         in the Offering Memorandum; and the Company is duly qualified to
         transact business as a foreign corporation and is in good standing in
         each other jurisdiction in which it owns or leases property of a
         nature, or transacts business of a type, that would make such
         qualification necessary, except to the extent that the failure to so
         qualify or be in good standing would not have a material adverse effect
         on the Company and its subsidiaries, considered as one enterprise.

                  (d)      Each of Con-Way Transportation Services, Inc., Menlo
         Worldwide, LLC, Menlo Logistics, Inc., and Menlo Worldwide Forwarding,
         Inc. and (each individually, a "Significant Subsidiary" and
         collectively, the "Significant Subsidiaries") is a corporation or
         limited liability company, as the case may be, duly organized, validly
         existing and in good standing under the laws of the jurisdiction of its
         organization with power and authority under such laws to own, lease and
         operate its properties and conduct its business as described in the
         Offering Memorandum; and each Significant Subsidiary is duly qualified
         to transact business as a foreign corporation or limited liability
         company, as the case may be, and is in good standing in each other
         jurisdiction in which it owns or leases property of a nature, or
         transacts business of a type, that would make such

                                       2


         qualification necessary, except to the extent that the failure to so
         qualify or be in good standing would not have a material adverse effect
         on the Company and its subsidiaries, considered as one enterprise. All
         of the outstanding shares of capital stock or other equity interests,
         as the case may be, of each Significant Subsidiary have been duly
         authorized and validly issued and are fully paid and, with respect to
         each Significant Subsidiary that is a corporation, non-assessable and
         are owned by the Company (except for directors' qualifying shares) or,
         in the case of Menlo Logistics, Inc. and Menlo Worldwide Forwarding,
         Inc., by Menlo Worldwide, LLC, free and clear of any pledge, lien,
         security interest, charge, claim, equity, encumbrance or adverse
         interest of any kind (except for restrictions on transfer arising under
         federal or state securities or blue sky laws).

                  (e)      None of the subsidiaries of the Company, other than
         Con-Way Transportation Services, Inc. and Menlo Worldwide, LLC, is a
         "significant subsidiary," as such term is defined in Rule 1-02(w) of
         Regulation S-X of the Securities Act.

                  (f)      The Securities have been duly authorized and, when
         issued and delivered pursuant to this Purchase Agreement and
         authenticated in the manner provided in the Indenture dated as of March
         8, 2000 (the "Base Indenture") between the Company and The Bank of New
         York, as successor in interest to Bank One Trust Company, National
         Association, as trustee (the "Trustee"), as supplemented by
         Supplemental Indenture No. 1 to be dated as of the Time of Delivery
         (the "Supplemental Indenture" and, together with the Base Indenture,
         the "Indenture"), will have been duly executed, authenticated, issued
         and delivered and will constitute valid and legally binding obligations
         of the Company entitled to the benefits provided by the Indenture,
         under which they are to be issued, enforeceable against the Company in
         accordance with their terms, subject to applicable bankruptcy,
         insolvency, reorganization, moratorium, fraudulent conveyance,
         fraudulent transfer or other similar laws relating or affecting
         creditors' rights generally or by general equitable principals. The
         Exchange Securities (as defined in paragraph (j) of this Section 1)
         have been duly authorized for issuance by the Company, and when issued
         and authenticated in accordance with the terms of the Indenture and the
         Exchange Offer (defined below) will have been duly executed,
         authenticated, issued and delivered and will constitute valid and
         legally binding obligations of the Company, entitled to the benefits
         provided by the Indenture, enforceable against the Company in
         accordance with their terms, subject to applicable bankruptcy,
         insolvency, reorganization, moratorium, fraudulent conveyance,
         fraudulent transfer or other similar laws relating or affecting
         creditors' rights generally or by general equitable principals.

                  (g)      The Base Indenture has been duly authorized, executed
         and delivered and constitutes a valid and legally binding obligation of
         the Company, enforceable in accordance with its terms, subject to
         applicable bankruptcy, insolvency, reorganization, moratorium,
         fraudulent conveyance, fraudulent transfer or other similar laws
         relating or affecting creditors' rights generally or by general
         equitable principals and except as rights to indemnification and
         contribution may be limited by applicable law or public policy.

                  (h)      The Supplemental Indenture has been duly authorized
         and, when executed and delivered by the Company at the Time of Delivery
         (assuming the due authorization,

                                       3


         execution and delivery thereof by the Trustee), the Supplemental
         Indenture will constitute a valid and legally binding obligation of the
         Company, enforceable in accordance with its terms, subject to
         applicable bankruptcy, insolvency, reorganization, moratorium,
         fraudulent conveyance, fraudulent transfer or other similar laws
         relating or affecting creditors' rights generally or by general
         equitable principals and except as rights to indemnification and
         contribution may be limited by applicable law or public policy.

                  (i)      This Agreement has been duly authorized, executed and
         delivered by the Company.

                  (j)      The exchange and registration rights agreement, to be
         dated as of April 30, 2004 (the "Registration Rights Agreement"),
         between the Company and the Initial Purchasers, has been duly
         authorized and, when executed and delivered by the Company (assuming
         the due authorization, execution and delivery thereof by the Initial
         Purchasers), the Registration Rights Agreement will constitute a valid
         and legally binding obligation of the Company, enforceable in
         accordance with its terms, except to the extent enforceability may be
         limited by subject to applicable bankruptcy, insolvency,
         reorganization, moratorium, fraudulent conveyance, fraudulent transfer
         or other similar laws relating or affecting creditors' rights generally
         or by general equitable principals and except as rights to
         indemnification and contribution under the Registration Rights
         Agreement may be limited by applicable law or public policy. The
         Registration Rights Agreement will conform in all material respects to
         the description thereof contained in the Offering Memorandum and will
         be in substantially the form previously delivered to you. Pursuant to
         the Registration Rights Agreement, the Company will agree to file with
         the Commission, under the circumstances set forth therein, (i) a
         registration statement under the Securities Act relating to another
         series of debt securities of the Company with terms substantially
         identical to the Securities (the "Exchange Securities") to be offered
         in exchange for the Securities (the "Exchange Offer") and (ii) to the
         extent required by the Registration Rights Agreement, a shelf
         registration statement pursuant to Rule 415 of the Securities Act
         relating to the resale by certain holders of the Securities, and in
         each case, to use its reasonable best efforts to cause such
         registration statements to be declared effective.

                  (k)      The Securities and the Indenture conform, and the
         Exchange Securities will conform, as to legal matters in all material
         respects to the descriptions thereof contained in the Offering
         Memorandum.

                  (l)      The Company had at the date indicated in the Offering
         Memorandum a duly authorized, issued and outstanding capitalization as
         set forth in the Offering Memorandum under the caption
         "Capitalization." All of the outstanding shares of capital stock of the
         Company have been duly authorized and validly issued and are fully paid
         and non-assessable.

                  (m)      The Company is not in violation of its charter or
         by-laws, and none of the Significant Subsidiaries is in violation of
         its charter (or, in the case of Menlo Worldwide LLC, limited liability
         company agreement) or by-laws, except, in each case, for any such
         violations which, individually and in the aggregate, would not have a
         material adverse

                                       4


         effect on the Company and its subsidiaries, considered as one
         enterprise, and except as otherwise set forth in the Offering
         Memorandum, none of the Company or any of the Significant Subsidiaries
         is in default in the performance or observance of any obligation,
         agreement, covenant or condition contained in any contract, indenture,
         mortgage, loan agreement, note, lease or other agreement or instrument
         to which it is a party or by which it is bound or to which any of its
         properties is subject, except for such defaults that would not have a
         material adverse effect on the Company and its subsidiaries, considered
         as one enterprise. The issue and sale of the Securities and the
         Exchange Securities, the execution, delivery and performance by the
         Company of this Purchase Agreement, the Securities, the Exchange
         Securities, the Indenture and the Registration Rights Agreement and the
         compliance by the Company with all of its obligations under this
         Purchase Agreement, the Securities, the Exchange Securities, the
         Indenture and the Registration Rights Agreement and the consummation of
         the transactions contemplated hereby and thereby have been duly
         authorized by all necessary corporate action on the part of the Company
         and do not and will not result in any violation of the charter or
         by-laws of the Company or any Significant Subsidiary, and do not and
         will not violate or conflict with, or result in a breach of any of the
         terms or provisions of, or constitute a default under, or result in the
         creation or imposition of any lien, charge or encumbrance upon any
         property or assets of the Company or any of the Significant
         Subsidiaries under any contract, indenture, mortgage, loan agreement,
         note, lease or other agreement or instrument to which the Company or
         any of the Significant Subsidiaries is a party or by which it is bound
         or to which any of their respective properties are subject or any
         existing applicable law, rule, regulation, judgment, order or decree of
         any government, governmental instrumentality or court, domestic or
         foreign, having jurisdiction over the Company or any of the Significant
         Subsidiaries or any of their respective properties (except for such
         violations, conflicts, breaches or defaults or liens, charges or
         encumbrances that would not have a material adverse effect on the
         Company and its subsidiaries, considered as one enterprise).

                  (n)      No authorization, approval, consent or license of any
         government, governmental instrumentality or court, domestic or foreign
         (other than under the Securities Act of 1933, as amended (the
         "Securities Act"), the Exchange Act, the Trust Indenture Act of 1939,
         as amended (the "Trust Indenture Act"), and the securities or blue sky
         laws of the various states and of foreign jurisdictions) is required
         for the valid authorization, issuance, sale and delivery of the
         Securities and the Exchange Securities, for the execution, delivery or
         performance by the Company of this Purchase Agreement, the Registration
         Rights Agreement, the Indenture and the Securities and the Exchange
         Securities or for the consummation by the Company of the transactions
         contemplated hereby or thereby, except such of the foregoing as will be
         obtained prior to the Time of Delivery.

                  (o)      Except as disclosed in the Offering Memorandum, there
         is no action, suit or proceeding before or by any government,
         governmental instrumentality or court, domestic or foreign, now pending
         or, to the knowledge of the Company, threatened against or affecting,
         the Company or any of the Significant Subsidiaries or any of their
         respective officers, as applicable, in their capacity as such, in which
         there is a reasonable possibility of an adverse decision that would (i)
         result in any material adverse change in

                                       5


         the condition (financial or otherwise), earnings, business affairs or
         business prospects of the Company and its subsidiaries, considered as
         one enterprise, (ii) materially and adversely affect the properties or
         assets of the Company and its subsidiaries, considered as one
         enterprise, or (iii) materially and adversely affect the consummation
         of the transactions contemplated in this Purchase Agreement or the
         Registration Rights Agreement; the aggregate of all pending legal or
         governmental proceedings that are not described in the Offering
         Memorandum to which the Company or any of the Significant Subsidiaries
         is a party or which affect any of their respective properties and in
         which there is a reasonable possibility of an adverse decision,
         including ordinary routine litigation incidental to the business of,
         the Company or any of its subsidiaries, would not have a material
         adverse effect on the condition (financial or otherwise), earnings,
         business affairs or business prospects of the Company and its
         subsidiaries, considered as one enterprise; and there are no contracts
         or other documents that would be required to be described in a
         prospectus to a registration statement under the Securities Act that
         are not described in the Offering Memorandum.

                  (p)      Each employee benefit plan, within the meaning of
         Section 3(3) of the Employee Retirement Income Security Act of 1974, as
         amended, ("ERISA") that is maintained, administered or contributed to
         by the Company or any of its subsidiaries for employees or former
         employees of the Company or its subsidiaries has been maintained in
         compliance with its terms and the requirements of any applicable
         statutes, orders, rules and regulations, including but not limited to
         ERISA and the Internal Revenue Code of 1986, as amended, ("Code"),
         except where the failure to comply would not have a material adverse
         effect on the Company and its subsidiaries, considered as one
         enterprise. No prohibited transaction, within the meaning of Section
         406 of ERISA or Section 4975 of the Code has occurred with respect to
         any such plan excluding transactions effected pursuant to a statutory
         or administrative exemption, except where such prohibited transaction
         would not have a material adverse effect on the Company and its
         subsidiaries, considered as one enterprise. For each such plan which is
         subject to the funding rules of Section 412 of the Code or Section 302
         of ERISA no "accumulated funding deficiency" as defined in Section 412
         of the Code has been incurred, except where the "accumulated funding
         deficiency" has been waived by the Internal Revenue Service, and the
         deficiency would not have a material adverse effect on the Company and
         its subsidiaries, considered as one enterprise. There is no reasonable
         likelihood that the Company or any of its subsidiaries could incur
         liability under Title IV of ERISA or suffer the imposition of one or
         more liens under ERISA or the Code with respect to any such plan or
         other employee benefit plan, except as otherwise disclosed in or
         contemplated by the Offering Memorandum or except for such liability or
         lien which would not have a material adverse effect on the Company and
         its subsidiaries, considered as one enterprise. With respect to any
         employee benefit plan that is a multiemployer plan as defined in
         Section 3(37) of ERISA, or another plan not sponsored by the Company,
         the representations in this paragraph (n) of Section 1 are made to the
         best knowledge and belief of the Company.

                  (q)      The Company has no knowledge of any actionable
         violation by the Company or any of its subsidiaries of any federal,
         state or local law relating to employment and employment practices,
         discrimination in the hiring, promotion or pay of employees, or any
         applicable wage or hour laws, which, individually or in the aggregate,

                                       6


         would result in a material adverse effect on the Company and its
         subsidiaries, considered as one enterprise. There is (i) no material
         unfair labor practice complaint pending or, to the knowledge of the
         Company, threatened against the Company before the National Labor
         Relations Board or any state or local labor relations board, nor are
         any material grievance or arbitration proceedings arising under any
         collective bargaining agreement pending or, to the knowledge of the
         Company, threatened against the Company, (ii) no labor strike, dispute,
         slowdown or stoppage ("Labor Dispute") in which the Company is
         involved, nor, to the knowledge of the Company, is any Labor Dispute
         imminent, other than routine disciplinary and grievance matters, and
         (iii) except as disclosed in or contemplated by the Offering
         Memorandum, no question concerning union representation within the
         meaning of the National Labor Relations Act existing with respect to
         the employees of the Company and, to the knowledge of the Company, no
         union organizing activities are taking place by employees of the
         Company or any of its subsidiaries, which, with respect to any matter
         specified in clauses (i), (ii) or (iii) above, whether considered
         singly or in the aggregate, would have a material adverse effect on the
         Company and its subsidiaries, considered as one enterprise.

                  (r)      KPMG LLP, who reported upon the audited financial
         statements and related notes included or incorporated by reference in
         the Offering Memorandum, is an independent public accountant with
         respect to the Company in accordance with the provisions of the
         Securities Act and the rules and regulations of the Commission
         thereunder.

                  (s)      The financial statements, together with the related
         notes and schedules thereto, included or incorporated by reference in
         the Offering Memorandum present fairly in all material respects the
         consolidated financial position, results of operations and cash flow of
         the Company and its subsidiaries at the respective dates and for the
         respective periods to which they apply; such statements and related
         notes and schedules thereto have been prepared in accordance with U.S.
         generally accepted accounting principles consistently applied
         throughout the periods involved, except as disclosed therein; and the
         other financial and statistical information and data set forth in the
         Offering Memorandum in all material respects, present fairly the
         information purported to be shown thereby at the respective dates or
         for the respective periods to which they apply and, to the extent that
         such information is set forth in or has been derived from the financial
         statements and accounting books and records of the Company, have been
         prepared on a basis consistent with such financial statements and the
         books and records of the Company.

                  (t)      Since the respective dates as of which information is
         given in the Offering Memorandum, except as otherwise stated therein or
         contemplated thereby, there has not been (i) any material adverse
         change, or any development involving a prospective material adverse
         change, in the condition (financial or otherwise), earnings, business
         affairs or business prospects of the Company and its subsidiaries,
         considered as one enterprise, whether or not arising in the ordinary
         course of business, (ii) any transaction or agreement entered into by
         the Company, whether or not arising in the ordinary course of business,
         that is material to the Company and its subsidiaries, considered as one
         enterprise, (iii) any dividend or distribution of any kind declared,
         paid or made by the Company on its capital stock, except for regular
         periodic dividends on its capital stock or

                                       7


         on the preferred securities of its subsidiary trust, or (iv) any change
         in the capital stock or long-term debt of the Company or any of its
         subsidiaries, except for the issuance of the Company's common stock
         upon the conversion of the Company's Series B Cumulative Convertible
         Preferred Stock or upon conversion of the preferred securities of the
         Company's subsidiary trust, or the issuance of capital stock, options
         and other securities under existing officer, director or employee
         benefit plans or upon the exercise of options issued under existing or
         prior officer, director or employee benefit plans, or the purchase by
         the Company or any of its subsidiaries of the Company's common stock in
         connection with its Thrift and Stock Plan in accordance with past
         practice, and except for changes in long-term debt in the ordinary
         course of business.

                  (u)      The Company and the Significant Subsidiaries each
         owns, possesses or has obtained all governmental licenses, permits,
         certificates, consents, orders, approvals and other authorizations
         necessary to own or lease, as the case may be, and to operate its
         properties and to carry on its business as presently conducted, and the
         Company has not received any notice of proceedings relating to
         revocation or modification of any such licenses, permits, certificates,
         consents, orders, approvals or authorizations, except in each case for
         such licenses, permits, certificates, consents, orders, approvals and
         other authorizations or revocations or modifications thereof which
         would not have a material adverse effect on the Company and its
         subsidiaries considered as one enterprise. Each of the Company and the
         Significant Subsidiaries is in compliance with all laws and regulations
         relating to the conduct of its business as conducted as of the date of
         the Offering Memorandum, except where the failure to be in compliance
         would not have a material adverse effect on the Company and its
         subsidiaries, considered as one enterprise.

                  (v)      The Company is not and, after giving effect to the
         offering and the sale of the Securities, will not be an "investment
         company" or a company controlled" by an "investment company" within the
         meaning of the Investment Company Act of 1940, as amended.

                  (w)      Except as would not, singly or in the aggregate, have
         a material adverse effect on the Company and its subsidiaries,
         considered as one enterprise, and except as otherwise set forth in or
         contemplated by the Offering Memorandum, (i) none of the Company or any
         of its subsidiaries is in violation of any federal, state or local laws
         and regulations relating to pollution or protection of human health or
         the environment, including, without limitation, laws and regulations
         relating to emissions, discharges, releases or threatened releases of
         toxic or hazardous substances, materials or wastes, or petroleum and
         petroleum products ("Materials of Environmental Concern"), or otherwise
         relating to the protection of human health and safety, or the use,
         treatment, storage, disposal, transport or handling of Materials of
         Environmental Concern (collectively, "Environmental Laws"), which
         violation includes, but is not limited to, noncompliance with, or lack
         of, any permits or other environmental authorizations, and (ii) (A)
         none of the Company or any of its subsidiaries has received any
         communication (written or oral), whether from a governmental authority
         or otherwise, alleging any such violation or noncompliance, and there
         are no circumstances, either past, present or that are reasonably
         foreseeable, that could reasonably be expected to lead to any such
         violation in the future, (B) there is no pending or, to the knowledge
         of the Company, threatened claim, action,

                                       8


         investigation or notice (written or oral) by any person or entity
         alleging potential liability for investigatory, cleanup, or
         governmental response costs, or natural resources or property damages,
         or personal injuries, attorney's fees or penalties relating to (x) the
         presence, or release into the environment, of any Materials of
         Environmental Concern at any location owned or operated by the Company
         or any of its subsidiaries now or in the past, or (y) circumstances
         forming the basis of any violation or potential violation, of any
         Environmental Law (collectively, "Environmental Claims"), and (C) there
         are no past or present actions, activities, circumstances, conditions,
         events or incidents that could form the basis of any Environmental
         Claim against the Company or any of its subsidiaries or against any
         person or entity for whose acts or omissions the Company or any of its
         subsidiaries is or may reasonably be expected to be liable, either
         contractually or by operation of law. In the ordinary course of
         business, the Company and/or certain of its subsidiaries, as
         appropriate, have conducted environmental investigations of, and have
         reviewed reasonably available information regarding, the business,
         properties and operations of the Company and its subsidiaries, and of
         other properties within the vicinity of their business, properties and
         operations, as appropriate for the circumstances of each such property
         and operation; on the basis of such reviews and investigations, the
         Company has reasonably concluded that, except as disclosed or
         contemplated by the Offering Memorandum, any costs and liabilities
         associated with such matters would not have, singly or in the
         aggregate, a material adverse effect on the Company and its
         subsidiaries, considered as one enterprise, or otherwise require
         disclosure in the Offering Memorandum.

                  (x)      No person has the right to require the Company to
         register any securities for offering and sale under the Securities Act
         by reason of the issue and sale of the Securities or the filing of a
         registration statement in connection with the Exchange Offer.

                  (y)      The Company and each of the Significant Subsidiaries
         have timely filed (or have had timely filed on their behalf) all
         material Tax returns required by applicable law to be filed by them
         prior to the date hereof (taking into account any properly granted
         extensions of time to file any Tax returns), and all such Tax returns
         are true, complete, and correct in all material respects. Except as
         otherwise stated or described in the Offering Memorandum, the Company
         and each of the Significant Subsidiaries have paid (or have had paid on
         their behalf) all material Taxes (as defined below) due or claimed to
         be due from the Company, other than those (i) currently payable without
         penalty or interest or (ii) being contested in good faith and by
         appropriate proceedings. Other than Tax items relating to proposed
         assessments or Audits (as defined below) which have been disclosed to
         counsel for the Initial Purchasers or which are set forth or described
         in the Offering Memorandum, there are no other Tax items that are
         currently under examination by any Tax Authority (as defined below) or,
         to the best knowledge of the Company, that could result in a proposed
         deficiency if examined by a Tax Authority in respect of which there is
         a reasonable possibility of a determination that would be adverse to
         the Company and that would have a material adverse effect on the
         Company and its subsidiaries, considered as one enterprise.

                  For purposes of this paragraph (w) of Section 1:

                                        9


                           "Taxes" shall mean all federal, state, local and
                  foreign taxes, and other assessments of a similar nature,
                  whether imposed directly or through withholding, including any
                  interest, additions to tax or penalties applicable thereto.

                           "Audit" shall mean any audit, assessment of Taxes,
                  other examination by any tax authority, proceeding or appeal
                  of such proceeding relating to Taxes.

                           "Tax Authority" means the Internal Revenue Service
                  and any other domestic or foreign governmental authority
                  responsible for the administration of any Taxes.

                  (z)      None of the Company or any of the Significant
         Subsidiaries has taken or will take, directly or indirectly, any action
         designed to, or that might be reasonably expected to, cause or result
         in stabilization or manipulation of the price of the Securities.

                  (aa)     Any certificate signed by any officer of the Company
         and delivered to you or your counsel on or after the date of this
         Purchase Agreement shall be deemed a representation and warranty by the
         Company to you as to the matters covered thereby.

                  (bb)     When the Securities are issued and delivered pursuant
         to this Purchase Agreement, the Securities will not be of the same
         class (within the meaning of Rule 144A under the Securities Act) as
         securities which are listed on a national securities exchange
         registered under Section 6 of the Exchange Act or quoted in a U.S.
         automated inter-dealer quotation system.

                  (cc)     The Company is subject to the reporting requirements
         of Section 13 or 15(d) of the Exchange Act.

                  (dd)     It is not necessary, in connection with the offer,
         sale and delivery of the Securities to the Initial Purchasers under
         this Purchase Agreement or in connection with the offer, initial resale
         and delivery of the Securities by the Initial Purchasers in the manner
         contemplated by this Purchase Agreement and the Offering Memorandum, to
         register the Securities under the Securities Act or to qualify the
         Indenture under the Trust Indenture Act, assuming that the Initial
         Purchasers have not and will not breach Section 3 of this Purchase
         Agreement.

                  (ee)     Assuming compliance with the representations made by
         the Initial Purchasers in Section 3 hereof, (i) neither the Company nor
         any person acting on its behalf has offered or sold the Securities by
         means of any general solicitation or general advertising within the
         meaning of Rule 502(c) under the Securities Act or, with respect to
         Securities sold outside the United States to non-U.S. persons (as
         defined in Rule 902 under the Securities Act), by means of any directed
         selling efforts within the meaning of Rule 902 under the Securities Act
         and (ii) the Company, any affiliate of the Company and any person
         acting on its or their behalf has complied with and will implement the
         "offering restriction" within the meaning of such Rule 902.

                                       10


                  (ff)     Within the preceding six months, neither the Company
         nor any other person acting on behalf of the Company has offered or
         sold to any person any Securities, or any securities of the same or a
         similar class as the Securities, other than Securities offered or sold
         to the Initial Purchasers hereunder. The Company will take reasonable
         precautions designed to insure that any offer or sale, direct or
         indirect, in the United States or to any U.S. person (as defined in
         Rule 902 under the Securities Act) of any Securities or any
         substantially similar security issued by the Company, within six months
         subsequent to the date on which the distribution of the Securities has
         been completed (as notified to the Company by the Representatives), is
         made under restrictions and other circumstances reasonably designed not
         to affect the status of the offer and sale of the Securities in the
         United States and to U.S. persons contemplated by this Purchase
         Agreement as transactions exempt from the registration provisions of
         the Securities Act.

                  (gg)     There is and has been no failure on the part of the
         Company or, to the knowledge of the Company, and any of the Company's
         directors or officers, in their capacities as such, to comply with any
         applicable provision of the Sarbanes Oxley Act of 2002 and the rules
         and regulations promulgated in connection therewith (the "Sarbanes
         Oxley Act") that are currently effective, including Section 402 related
         to loans and Sections 302 and 906 related to certifications, other than
         any such failure that would not reasonably be expected to have a
         material adverse effect on the Company and its subsidiaries, considered
         as one enterprise.

         2.       Subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Initial Purchasers, and each of
the Initial Purchasers agrees, severally and not jointly, to purchase from the
Company, at a purchase price of 96.654% of the principal amount thereof, plus
accrued interest, if any, from April 30, 2004 to the Time of Delivery hereunder,
the principal amount of Securities set forth opposite the name of such Initial
Purchaser in Schedule I hereto.

         3.       Upon the authorization by you of the release of the
Securities, the several Initial Purchasers propose to offer the Securities for
sale upon the terms and conditions set forth in this Purchase Agreement and the
Offering Memorandum and each Initial Purchaser hereby represents and warrants
to, and agrees with the Company that:

                  (a)      It will offer and sell the Securities only to: (i)
         persons who it reasonably believes are "qualified institutional buyers"
         ("QIBs") within the meaning of Rule 144A under the Securities Act in
         transactions meeting the requirements of Rule 144A; or (ii) in the case
         of offers or sales outside the United States, to persons other than
         U.S. persons ("Non-U.S. Persons," which term shall include dealers or
         other professional fiduciaries in the United States acting on a
         discretionary basis for foreign beneficial owners (other than an estate
         or trust)) in reliance on Regulation S;

                  (b)      It is an "Accredited Investor" of the sort specified
         in clauses (1), (2), (3) or (7) in Rule 501 (a) of Regulation D under
         the Securities Act;

                                       11


                  (c)      It will not offer or sell the Securities by any form
         of general solicitation or general advertising, including but not
         limited to the methods described in Rule 502(c) under the Securities
         Act;

                  (d)      Each Initial Purchaser understands that the
         Securities have not been and will not be registered under the
         Securities Act and may not be offered or sold within the United States
         or to, or for the account or benefit of, U.S. persons except in
         accordance with Regulation S under the Securities Act or pursuant to an
         exemption from the registration requirements of the Securities Act.
         Each Initial Purchaser severally represents and agrees that, except as
         permitted by Section 4(a) above, it has offered and sold the Securities
         and will offer and sell the Securities (i) as part of its distribution
         at any time and (ii) otherwise until forty days after the later of the
         date upon which the offering of the Securities commences and the Time
         of Delivery, only in accordance with Rule 903 of Regulation S.
         Accordingly, neither the Initial Purchasers, their affiliates nor any
         persons acting on their behalf have engaged or will engage in any
         directed selling efforts with respect to Securities sold hereunder
         pursuant to Regulation S, and the Initial Purchasers, their affiliates
         and any person acting on their behalf have complied and will comply
         with the offering restriction requirements of Regulation S. Each
         Initial Purchaser severally agrees that, at or prior to confirmation of
         a sale of Securities pursuant to Regulation S it will have sent to each
         distributor, dealer or person receiving a selling concession, fee or
         other remuneration that purchases such Securities from it during the
         restricted period a confirmation or notice to substantially the
         following effect:

                           "The securities covered hereby have not been
                  registered under the Securities Act of 1933, as amended (the
                  "Securities Act"), and may not be offered and sold within the
                  United States or to, or for the account or benefit of, U.S.
                  persons (i) as part of their distribution at any time or (ii)
                  otherwise until 40 days after the later of the commencement of
                  the offering and the final closing date, except in either case
                  in accordance with Regulation S (or Rule 144A if available)
                  under the Securities Act. Terms used above have the meaning
                  given to them by Regulation S."

                  (e)      It has not offered or sold and, prior to the expiry
         of a period of six months from the Time of Delivery, will not offer or
         sell any Securities included in this offering to persons in the United
         Kingdom except to persons whose ordinary activities involve them in
         acquiring, holding, managing or disposing of investments (as principal
         or agent) for the purposes of their businesses or otherwise in
         circumstances which have not resulted and will not result in an offer
         to the public in the United Kingdom within the meaning of the Public
         Offers of Securities Regulations 1995;

                  (f)      It has only communicated and caused to be
         communicated and will only communicate or cause to be communicated any
         invitation or inducement to engage in investment activity (within the
         meaning of section 21 of the Financial Services and Markets Act 2000
         ("FSMA")) received by it in connection with the issue or sale of any

                                       12


         Securities included in this offering in circumstances in which section
         21(1) of the FSMA does not apply to us; and

                  (g)      It has complied and will comply with all applicable
         provisions of the FSMA with respect to anything done by it in relation
         to the Securities included in this offering in, from or otherwise
         involving the United Kingdom.

                  4.       (a) The Securities to be purchased by each Initial
         Purchaser hereunder will be represented by one or more definitive
         global Securities in book-entry form which will be deposited by or on
         behalf of the Company with The Depository Trust Company ("DTC") or its
         designated custodian. The Company will deliver the Securities to the
         Representatives. for the account of each Initial Purchaser, against
         payment by or on behalf of such Initial Purchaser of the purchase price
         therefor by wire transfer in Federal (same day) funds, by causing DTC
         to credit the Securities to the account of the Representatives. at DTC.
         The Company will cause the certificates representing the Securities to
         be made available to the Representatives for checking at least
         twenty-four hours prior to the Time of Delivery (as defined below) at
         the office of DTC or its designated custodian (the "Designated
         Office"). The time and date of such delivery and payment shall be 9:30
         a.m., New York City time, on April 30, 2004 or such other time and date
         as the Representatives and the Company may agree upon in writing. Such
         time and date are herein called the "Time of Delivery".

                  (b)      The documents to be delivered at the Time of Delivery
         by or on behalf of the parties hereto pursuant to Section 7 hereof,
         including the cross-receipt for the Securities and any additional
         documents requested by the Initial Purchasers pursuant to Section 7
         hereof, will be delivered at such time and date at the offices of
         Mayer, Brown, Rowe & Maw LLP, 190 South LaSalle Street, Chicago,
         Illinois 60603 (the "Closing Location"), and the Securities will be
         delivered at the Designated Office, all at the Time of Delivery. A
         meeting will be held at the Closing Location on the New York Business
         Day next preceding the Time of Delivery, at which meeting the final
         drafts of the documents to be delivered pursuant to the preceding
         sentence will be available for review by the parties hereto. For the
         purposes of this Section 4, "New York Business Day" shall mean each
         Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
         which banking institutions in New York are generally authorized or
         obligated by law or executive order to close.

         5.       The Company agrees with each of the Initial Purchasers:

                  (a)      The Company will not amend or supplement the Offering
         Memorandum without the prior written consent of the Representatives,
         which consent shall not be unreasonably withheld;

                  (b)      The Company will cooperate with the Initial
         Purchasers in endeavoring to qualify the Securities for sale under the
         securities laws of such jurisdictions as the Initial Purchasers may
         reasonably have designated in writing and will make such applications,
         file such documents and furnish such information as may be reasonably
         required for that purpose; provided that the Company shall not be
         required to qualify as a foreign

                                       13


         corporation or to file a general consent to service of process in any
         jurisdiction where it is not now so qualified or required to file such
         a consent. The Company will, from time to time, prepare and file such
         statements, reports and other documents, as are or may be required to
         continue such qualifications in effect for so long a period as the
         Representatives may reasonably request for distribution of the
         Securities;

                  (c)      To furnish the Initial Purchasers with copies of the
         Offering Memorandum and each amendment or supplement thereto and
         additional written and electronic copies thereof in such quantities as
         you may from time to time reasonably request. If at any time prior to
         the date on which all of the Securities shall have been sold by the
         Initial Purchasers, any event shall occur as a result of which, in the
         judgment of the Company or in the reasonable opinion of counsel to the
         Representatives, it becomes necessary to amend or supplement the
         Offering Memorandum in order to make the statements therein, in the
         light of the circumstances under which they were made, not misleading,
         or, if it is necessary at any time to amend or supplement the Offering
         Memorandum to comply with applicable law, the Company promptly will
         prepare an appropriate amendment or supplement to the Offering
         Memorandum so that the Offering Memorandum as so amended or
         supplemented will not contain statements that, in light of the
         circumstances under which they were made, are misleading, or so that
         the Offering Memorandum will comply with applicable law. We will
         prepare and furnish without charge to each Initial Purchaser and to any
         dealer in securities as many written and electronic copies as you may
         from time to time reasonably request of an amended Offering Memorandum
         or a supplement to the Offering Memorandum which will correct such
         statement or omission or affect such compliance;

                  (d)      During the period beginning from the date hereof and
         continuing until the date six months after the Time of Delivery, not to
         offer, sell, contract to sell or otherwise dispose of, except as
         provided hereunder and the Registration Rights Agreement, any
         securities of the Company that are substantially similar to the
         Securities;

                  (e)      Not to be or become, at any time prior to the
         expiration of three years after the Time of Delivery, an open-end
         investment company, unit investment trust, closed-end investment
         company or face-amount certificate company that is or is required to be
         registered under Section 8 of the Investment Company Act;

                  (f)      At any time when the Company is not subject to
         Section 13 or 15(d) of the Exchange Act, for the benefit of holders
         from time to time of Securities, to furnish at its expense, upon
         request, to holders of Securities and prospective purchasers of
         securities information (the "Additional Issuer Information") satisfying
         the requirements of subsection (d)(4) of Rule 144A under the Securities
         Act;

                  (g)      If not otherwise available on the Commission's
         Electronic Data Gathering, Analysis, and Retrieval ("EDGAR") system, to
         furnish to the holders of the Securities as soon as practicable after
         the end of each fiscal year an annual report (including a balance sheet
         and statements of income, stockholders' equity and cash flows of the
         Company and its consolidated subsidiaries certified by independent
         public accountants) and, as soon as practicable after the end of each
         of the first three quarters of each fiscal year (beginning

                                       14


         with the fiscal quarter ending after the date of the Offering
         Memorandum), to make available consolidated summary financial
         information of the Company and its subsidiaries for such quarter in
         reasonable detail;

                  (h)      During a period of one year from the date of the
         Offering Memorandum, to furnish to you, if not available on EDGAR or
         the Company's website, copies of all reports or other communications
         (financial or other) furnished to stockholders of the Company, and to
         deliver to you as soon as they are available, copies of any reports and
         financial statements furnished to or filed with the Commission or any
         securities exchange on which the Securities or any class of securities
         of the Company is listed; and to the extent consistent with Regulation
         FD under the Securities Act and to the extent that such additional
         information has been made available to the stockholders of the Company,
         such additional information concerning the business and financial
         condition of the Company as you may from time to time reasonably
         request (such financial statements to be on a consolidated basis to the
         extent the accounts of the Company and its subsidiaries are
         consolidated in reports furnished to its stockholders generally or to
         the Commission);

                  (i)      During the period of two years after the Time of
         Delivery, the Company will not, and will not permit any of its
         "affiliates" (as defined in Rule 144 under the Securities Act) to,
         resell any of the Securities which constitute "restricted securities"
         under Rule 144 that have been reacquired by any of them;

                  (j)      The Company will cooperate with the Representatives
         and use its reasonable best efforts to permit the Securities to be
         eligible for clearance and settlement through The Depository Trust
         Company and, if necessary, Euroclear and Clearstream Banking and
         Euroclear Bank S.A./N.V.;

                  (k)      To use the net proceeds received by it from the sale
         of the Securities pursuant to this Purchase Agreement in the manner
         specified in the Offering Memorandum under the caption "Use of
         Proceeds".

         6.       The Company covenants and agrees with the several Initial
Purchasers that the Company will pay or cause to be paid the following: (i) the
fees, disbursements and expenses of the Company's counsel and accountants in
connection with the issue of the Securities and all other expenses in connection
with the preparation, printing and filing of the Preliminary Offering Memorandum
and the Offering Memorandum and any amendments and supplements thereto and the
mailing and delivering of copies thereof to the Initial Purchasers and dealers;
(ii) the cost of printing or producing any agreement among the Initial
Purchasers, this Purchase Agreement, the Indenture, the Registration Rights
Agreement, the blue sky and legal investment memoranda, closing documents
(including any compilations thereof) and any other documents in connection with
the offering, purchase, sale and delivery of the Securities; (iii) all expenses
in connection with the qualification of the Securities and the Exchange
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the reasonable fees and disbursements of counsel
for the Initial Purchasers in connection with such qualification and in
connection with the blue sky and legal investment surveys; (iv) any fees charged
by securities rating services for rating the Securities and the Exchange
Securities; (v) the cost of preparing the Securities and the Exchange
Securities; (vi) the fees and expenses of the Trustee and any agent

                                       15


of the Trustee and the reasonable fees and disbursements of counsel for the
Trustee in connection with the Indenture, the Securities and the Exchange
Securities; (vii) any cost incurred in connection with the designation of the
Securities for trading in PORTAL; and (viii) all other reasonable costs and
expenses incident to the performance of its obligations hereunder which are not
otherwise specifically provided for in this Section. It is understood, however,
that, except as provided in this Section, and Sections 8 and 11 hereof, the
Initial Purchasers will pay all of their own costs and expenses, including the
fees of their counsel, transfer taxes on resale of any of the Securities by
them, and any advertising expenses connected with any offers they may make.

         7.       The obligations of the Initial Purchasers hereunder shall be
subject, in their discretion, to the condition that all representations and
warranties and other statements of the Company herein are, at and as of the Time
of Delivery, true and correct in all material respects, the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed in all material respects, and the following additional conditions:

                  (a)      Mayer, Brown, Rowe & Maw LLP, counsel for the Initial
         Purchasers, shall have furnished to you such opinion or opinions, dated
         the Time of Delivery, in form and substance reasonably satisfactory to
         the Initial Purchasers, with respect to the issuance and sale of the
         Securities, the Indenture, the Registration Rights Agreement, the
         Offering Memorandum and other related matters as the Initial Purchasers
         may reasonably require, and such counsel shall have received such
         papers and information as they may reasonably request to enable them to
         pass upon such matters;

                  (b)      Skadden, Arps, Slate, Meager & Flow LLP, counsel for
         the Company, shall have furnished to you their written opinion, dated
         the Time of Delivery, in form and substance satisfactory to you and in
         substantially the form attached hereto as Annex A, and the Company's
         General Counsel shall have furnished to you his written opinion, dated
         the Time of Delivery, in form and substance satisfactory to you and in
         substantially the form attached hereto as Annex B;

                  (c)      On the date of the Offering Memorandum prior to the
         execution of this Purchase Agreement and also at the Time of Delivery,
         KPMG LLP shall have furnished to you letters, dated the respective
         dates of delivery thereof, in form and substance reasonably
         satisfactory to the Representatives of the type described in AICPA
         Statement on Auditing Standards No. 72;

                  (d)      (i) Since the date of the latest audited financial
         statements included or incorporated by reference in the Offering
         Memorandum, except as otherwise set forth in or contemplated by the
         Offering Memorandum, there shall not have been any material adverse
         change, or any development involving a prospective material adverse
         change, in or affecting the condition, financial or otherwise, or in
         the earnings, affairs or business prospects, whether or not arising in
         the ordinary course of business, of the Company and its subsidiaries,
         taken as a whole, from that described in the Offering Memorandum, (ii)
         since the date of the latest audited financial statements included or
         incorporated by reference in the Offering Memorandum and except as
         contemplated therein there shall not have been any material adverse
         change, or any development involving a prospective material adverse
         change, in the capital stock or the long-term debt of the Company from

                                       16


         that set forth in the Offering Memorandum, (iii) the Company shall have
         no liability or obligation, direct or contingent, which is material to
         the Company and its subsidiaries, taken as a whole, other than those
         reflected in or contemplated by the Offering Memorandum and (iv) since
         the date of the latest audited financial statements included or
         incorporated by reference in the Offering Memorandum, the Company has
         not sustained any material loss or interference with its business from
         fire, explosion, flood or other calamity, whether or not covered by
         insurance, or from any labor dispute or court or governmental action,
         order or decree, otherwise than as set forth or contemplated in the
         Offering Memorandum, the effect of which, in any such case described in
         clause (i), (ii), (iii) or (iv), is in the judgment of the
         Representatives so material and adverse as to make it impracticable or
         in inadvisable to proceed with the offering or the delivery of the
         Securities on the terms and in the manner contemplated in this Purchase
         Agreement and in the Offering Memorandum;

                  (e)      On or after the date hereof (i) no downgrading shall
         have occurred in the rating accorded the Company's debt securities by
         any "nationally recognized statistical rating organization", as that
         term is defined by the Commission for purposes of Rule 436(g)(2) under
         the Securities Act, and (ii) no such organization shall have publicly
         announced that it has under surveillance or review, with possible
         negative implications, its rating of any of the Company's debt
         securities;

                  (f)      At the Time of Delivery, the Securities shall have a
         rating of at least Baa3 from Moody's Investors Service, Inc. and at
         least BBB- from Standard & Poor's Corporation as evidenced in writing
         from such rating agencies or by other evidence reasonably satisfactory
         to the Representatives; and

                  (g)      The Company shall have furnished or caused to be
         furnished to you at the Time of Delivery certificates of officers of
         the Company reasonably satisfactory to you as to the accuracy in all
         material respects of the representations and warranties of the Company
         herein at and as of such Time of Delivery, as to the performance by the
         Company in all material respects of all of its obligations hereunder to
         be performed at or prior to such Time of Delivery, as to the matters
         set forth in subsections (d) and (e) of this Section and as to such
         other matters as you may reasonably request.

         If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Purchase
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Purchase Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Initial Purchasers and
counsel for the Initial Purchasers, this Purchase Agreement and all obligations
of the Initial Purchasers hereunder may be cancelled at, or at any time prior
to, the Time of Delivery by the Initial Purchasers. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.

         8.       (a) The Company will indemnify and hold harmless each Initial
         Purchaser against any losses, claims, damages or liabilities, joint or
         several, to which such Initial Purchaser may become subject, under the
         Securities Act or otherwise, insofar as such losses, claims, damages or
         liabilities (or actions in respect thereof) arise out of or are based
         upon an untrue statement or alleged untrue statement of a material fact
         contained in any

                                       17


         Preliminary Offering Memorandum or the Offering Memorandum, or any
         amendment or supplement thereto, or arise out of or are based upon the
         omission or alleged omission to state therein a material fact necessary
         to make the statements therein, in the light of the circumstances under
         which they were made, not misleading, and will reimburse each Initial
         Purchaser for any legal or other expenses reasonably incurred by such
         Initial Purchaser in connection with investigating or defending any
         such action or claim as such expenses are incurred; provided, however,
         that the Company shall not be liable in any such case to the extent
         that any such loss, claim, damage or liability arises out of or is
         based upon an untrue statement or alleged untrue statement or omission
         or alleged omission made in any Preliminary Offering Memorandum or the
         Offering Memorandum or any such amendment or supplement in reliance
         upon and in conformity with written information furnished to the
         Company by any Initial Purchaser through either of the Representatives
         expressly for use therein.

                  (b)      Each Initial Purchaser will, severally and not
         jointly, indemnify and hold harmless the Company against any losses,
         claims, damages or liabilities to which the Company may become subject,
         under the Securities Act or otherwise, insofar as such losses, claims,
         damages or liabilities (or actions in respect thereof) arise out of or
         are based upon an untrue statement or alleged untrue statement of a
         material fact contained in any Preliminary Offering Memorandum or the
         Offering Memorandum, or any amendment or supplement thereto, or arise
         out of or are based upon the omission or alleged omission to state
         therein a material fact or necessary to make the statements therein, in
         the light of the circumstances under which they were made, not
         misleading, in each case to the extent, but only to the extent, that
         such untrue statement or alleged untrue statement or omission or
         alleged omission was made in any Preliminary Offering Memorandum or the
         Offering Memorandum or any such amendment or supplement in reliance
         upon and in conformity with written information furnished to the
         Company by such Initial Purchaser through the Representatives expressly
         for use therein; and will reimburse the Company for any legal or other
         expenses reasonably incurred by the Company in connection with
         investigating or defending any such action or claim as such expenses
         are incurred.

                  (c)      Promptly after receipt by an indemnified party under
         subsection (a) or (b) above of notice of the commencement of any
         action, such indemnified party shall, if a claim in respect thereof is
         to be made against the indemnifying party under such subsection, notify
         the indemnifying party in writing of the commencement thereof. No
         indemnification provided for in Section 8(a) or (b) shall be available
         to any party who shall fail to give notice as provided in this Section
         8(c) if the party to whom notice was not given was unaware of the
         proceeding to which such notice would have related and was materially
         prejudiced by the failure to give such notice, but the failure to give
         such notice shall not relieve the indemnifying party or parties from
         any liability which it or they may have to the indemnified party for
         contribution or otherwise than on account of the provisions of Section
         8(a) or (b). In case any such action shall be brought against any
         indemnified party and it shall notify the indemnifying party of the
         commencement thereof, the indemnifying party shall be entitled to
         participate therein and, to the extent that it shall wish, jointly with
         any other indemnifying party similarly notified, to assume the defense
         thereof, with counsel satisfactory to such indemnified party (who shall
         not,

                                       18


         except with the written consent of the indemnified party, be counsel to
         the indemnifying party), and, after notice from the indemnifying party
         to such indemnified party of its election so to assume the defense
         thereof, the indemnifying party shall not be liable to such indemnified
         party under such subsection for any legal expenses of other counsel or
         any other expenses, in each case subsequently incurred by such
         indemnified party, in connection with the defense thereof other than
         reasonable costs of investigation. No indemnifying party shall, without
         the written consent of the indemnified party, effect the settlement or
         compromise of, or consent to the entry of any judgment with respect to,
         any pending or threatened action or claim in respect of which
         indemnification or contribution may be sought hereunder (whether or not
         the indemnified party is an actual or potential party to such action or
         claim) unless such settlement, compromise or judgment (i) includes an
         unconditional release of the indemnified party from all liability
         arising out of such action or claim and (ii) does not include a
         statement as to, or an admission of, fault, culpability or a failure to
         act, by or on behalf of any indemnified party.

                  (d)      If the indemnification provided for in this Section 8
         is unavailable to or insufficient to hold harmless an indemnified party
         under subsection (a) or (b) above in respect of any losses, claims,
         damages or liabilities (or actions in respect thereof) referred to
         therein, then each indemnifying party shall contribute to the amount
         paid or payable by such indemnified party as a result of such losses,
         claims, damages or liabilities (or actions in respect thereof) in such
         proportion as is appropriate to reflect the relative benefits received
         by the Company on the one hand and the Initial Purchasers on the other
         from the offering of the Securities. If, however, the allocation
         provided by the immediately preceding sentence is not permitted by
         applicable law or if the indemnified party failed to give the notice
         required under subsection (c) above, then each indemnifying party shall
         contribute to such amount paid or payable by such indemnified party in
         such proportion as is appropriate to reflect not only such relative
         benefits but also the relative fault of the Company on the one hand and
         the Initial Purchasers on the other in connection with the statements
         or omissions which resulted in such losses, claims, damages or
         liabilities (or actions in respect thereof), as well as any other
         relevant equitable considerations. The relative benefits received by
         the Company on the one hand and the Initial Purchasers on the other
         shall be deemed to be in the same proportion as the total net proceeds
         from the offering (before deducting expenses) received by the Company
         bear to the total underwriting discounts and commissions received by
         the Initial Purchasers, in each case as set forth in the Offering
         Memorandum. The relative fault shall be determined by reference to,
         among other things, whether the untrue or alleged untrue statement of a
         material fact or the omission or alleged omission to state a material
         fact relates to information supplied by the Company on the one hand or
         the Initial Purchasers on the other and the parties' relative intent,
         knowledge, access to information and opportunity to correct or prevent
         such statement or omission. The Company and the Initial Purchasers
         agree that it would not be just and equitable if contribution pursuant
         to this subsection (d) were determined by pro rata allocation (even if
         the Initial Purchasers were treated as one entity for such purpose) or
         by any other method of allocation which does not take account of the
         equitable considerations referred to above in this subsection (d). The
         amount paid or payable by an indemnified party as a result of the
         losses, claims, damages or liabilities (or actions in respect thereof)
         referred to above in this subsection (d) shall be deemed to include any
         legal or other expenses reasonably incurred by such indemnified party
         in

                                       19


         connection with investigating or defending any such action or claim.
         Notwithstanding the provisions of this subsection (d), no Initial
         Purchaser shall be required to contribute any amount in excess of the
         amount by which the total price at which the Securities underwritten by
         it and distributed to investors were offered to investors exceeds the
         amount of any damages which such Initial Purchaser has otherwise been
         required to pay by reason of such untrue or alleged untrue statement or
         omission or alleged omission. The Initial Purchasers' obligations in
         this subsection (d) to contribute are several in proportion to their
         respective underwriting obligations and not joint.

                  (e)      The obligations of the Company under this Section 8
         shall be in addition to any liability which the Company may otherwise
         have and shall extend, upon the same terms and conditions, to each
         person, if any, who controls any Initial Purchaser within the meaning
         of the Securities Act; and the obligations of the Initial Purchasers
         under this Section 8 shall be in addition to any liability which the
         respective Initial Purchasers may otherwise have and shall extend, upon
         the same terms and conditions, to each officer and director of the
         Company and to each person, if any, who controls the Company within the
         meaning of the Securities Act.

         9.       (a)      If any Purchaser shall default in its obligation to
         purchase the Securities which it has agreed to purchase hereunder, you
         may in your discretion arrange for you or another party or other
         parties to purchase such Securities on the terms contained herein. If
         within thirty-six hours after such default by any Purchaser you do not
         arrange for the purchase of such Securities, then the Company shall be
         entitled to a further period of thirty-six hours within which to
         procure another party or other parties reasonably satisfactory to you
         to purchase such Securities on such terms. In the event that, within
         the respective prescribed periods, you notify the Company that you have
         so arranged for the purchase of such Securities, or the Company
         notifies you that it has so arranged for the purchase of such
         Securities, you or the Company shall have the right to postpone the
         Time of Delivery for a period of not more than seven days, in order to
         effect whatever changes may thereby be made necessary in the Offering
         Memorandum, or in any other documents or arrangements, and the Company
         agrees to prepare promptly any amendments to the Offering Memorandum
         which may thereby be made necessary. The term "Purchaser" as used in
         this Purchase Agreement shall include any person substituted under this
         Section with like effect as if such person had originally been a party
         to this Purchase Agreement with respect to such Securities.

                  (b)      If, after giving effect to any arrangements for the
         purchase of the Securities of a defaulting Purchaser or Purchasers by
         you and the Company as provided in subsection (a) above, the aggregate
         principal amount of such Securities which remains unpurchased does not
         exceed one-eleventh of the aggregate principal amount of all the
         Securities, then the Company shall have the right to require each
         non-defaulting Purchaser to purchase the principal amount of Securities
         which such Purchaser agreed to purchase hereunder and, in addition, to
         require each non-defaulting Purchaser to purchase its pro rata share
         (based on the principal amount of Securities which such Purchaser
         agreed to purchase hereunder) of the Securities of such defaulting
         Purchaser or Purchasers for which such arrangements have not been made;
         but nothing herein shall relieve a defaulting Purchaser from liability
         for its default.

                                       20


                  (c)      If, after giving effect to any arrangements for the
         purchase of the Securities of a defaulting Purchaser or Purchasers by
         you and the Company as provided in subsection (a) above, the aggregate
         principal amount of Securities which remains unpurchased exceeds
         one-eleventh of the aggregate principal amount of all the Securities,
         or if the Company shall not exercise the right described in subsection
         (b) above to require non-defaulting Purchasers to purchase Securities
         of a defaulting Purchaser or Purchasers, then this Purchase Agreement
         shall thereupon terminate, without liability on the part of any
         non-defaulting Purchaser or the Company, except for the expenses to be
         borne by the Company and the Purchasers as provided in Section 6 hereof
         and the indemnity and contribution agreements in Section 8 hereof; but
         nothing herein shall relieve a defaulting Purchaser from liability for
         its default.

         10.      This Agreement may be terminated at, or at any time prior to,
the Time of Delivery by the Representatives with written notice to the Company,
if any of the following has occurred: (a) a suspension or material limitation in
trading in securities generally on the New York Stock Exchange; (b) a suspension
or material limitation in trading in the Company's securities on the New York
Stock Exchange; (c) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance services
in the United States; (d) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war or other crisis or calamity, if the effect of any such event
specified in this clause (d) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering
Memorandum; or (e) the occurrence of any material adverse change in the
existing, financial, political or economic conditions in the United States or
elsewhere which, in the judgment of the Representatives, would materially and
adversely affect the financial markets or the markets for the Securities and
other debt securities.

         11.      The respective indemnities, agreements, representations,
warranties and other statements of the Company and the several Initial
Purchasers, as set forth in this Purchase Agreement or made by or on behalf of
them, respectively, pursuant to this Purchase Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Initial Purchaser or any
controlling person of any Initial Purchaser, or the Company, or any officer or
director or controlling person of the Company, and shall survive delivery of and
payment for the Securities.

         12.      If this Purchase Agreement shall be terminated pursuant to
Section 9 or Section 10(a), (c), (d) or (e) hereof, the Company shall not then
be under any liability to any Purchaser except as provided in Sections 6 and 8
hereof; but, if for any other reason, the Securities are not delivered by or on
behalf of the Company as provided herein, the Company will reimburse the
Purchasers through you for all out-of-pocket expenses approved in writing by
you, including the reasonable fees and disbursements of counsel, reasonably
incurred by the Purchasers in making preparations for the purchase, sale and
delivery of the Securities, but the Company shall then be under no further
liability to any Purchaser except as provided in Sections 6 and 8 hereof.

         13.      In all dealings hereunder, you shall act on behalf of each of
the Purchasers, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or

                                       21


agreement on behalf of any Purchaser made or given by you jointly or by either
Citigroup Global Markets Inc. or Morgan Stanley & Co. Incorporated.

         All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Initial Purchasers shall be delivered or sent by mail,
telex or facsimile transmission to you as the Representatives in care of both
Citigroup Global Markets Inc., 388 Greenwich Street, New York, New York 10013,
Attention: Registration Department, and Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10005, Attention: General Counsel; and if to the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Company set forth in the Offering Memorandum, Attention:
Assistant Secretary, with a copy to the General Counsel at the same address.

         14.      This Purchase Agreement shall be binding upon, and inure
solely to the benefit of, the Initial Purchasers, the Company and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company
and each person who controls the Company or any Initial Purchaser, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this Purchase
Agreement. No purchaser of any of the Securities from any Initial Purchaser
shall be deemed a successor or assign by reason merely of such purchase.

         15.      Time shall be of the essence of this Purchase Agreement.

         16.      This Purchase Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

         17.      This Purchase Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such respective counterparts shall together
constitute one and the same instrument.

         18.      The Company is authorized, subject to applicable law, to
disclose any and all aspects of this potential transaction that are necessary to
support any U.S. federal income tax benefits expected to be claimed with respect
to such transaction, without the Purchasers imposing any limitation of any kind.

                                       22


         If the foregoing is in accordance with your understanding, please sign
and return to us five counterparts hereof, and upon the acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Initial Purchasers and
the Company. It is understood that your acceptance of this letter on behalf of
each of the Initial Purchasers is pursuant to the authority set forth in a form
of Agreement among Purchasers, the form of which shall be submitted to the
Company for examination upon request, but without warranty on your part as to
the authority of the signers thereof (other than yourselves).

                                          Very truly yours,

                                          CNF INC.

                                          By:___________________________________
                                          Name: Mark C. Thickpenny
                                          Title: Vice President and Treasurer

Accepted as of the date hereof:

CITIGROUP GLOBAL MARKETS INC.
MORGAN STANLEY & CO. INCORPORATED

BY:   CITIGROUP GLOBAL MARKETS INC.

By:________________________
Name: Stephen H. Woo
Title: Vice President



                                   SCHEDULE I



                                                    Principal Amount of Firm
         Initial Purchasers                        Securities to be Purchased
         ------------------                        --------------------------
                                                
Citigroup Capital Markets Inc...................... US   $  135,000,000

Morgan Stanley & Co. Incorporated..................      $  135,000,000

ABN AMRO Incorporated..............................      $    7,500,000

Banc of America Securities LLC.....................      $    7,500,000

J.P. Morgan Securities Inc.........................      $    7,500,000

PNC Capital Markets, Inc...........................      $    7,500,000

         Total....................................  U.S. $  300,000,000
                                                         ==============

EX-4.2

                                                                     EXHIBIT 4.2

                                    CNF INC.

                          SUPPLEMENTAL INDENTURE NO. 1

                                  $300,000,000

                        6.70% Senior Debentures due 2034

      THIS SUPPLEMENTAL INDENTURE NO. 1, dated as of April 30, 2004 (the
"Supplemental Indenture"), between CNF INC. (formerly known as CNF
Transportation Inc.), a Delaware corporation (the "Company"), and The Bank of
New York, a New York banking corporation, as successor to Bank One Trust
Company, National Association, as trustee (the "Trustee").

                            RECITALS OF THE COMPANY:

      WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture, dated as of March 8, 2000 (the "Base Indenture" and, as
supplemented by this Supplemental Indenture, the "Indenture"), providing for the
issuance from time to time of one or more series of Securities;

      WHEREAS, Section 901(4) of the Indenture provides that the Company and the
Trustee may enter into an indenture supplemental to the Indenture to establish
the form or terms of Securities of any series as permitted by Sections 201 and
301 of the Indenture; and

      WHEREAS, all the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.

             NOW THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

      For and in consideration of the premises and the issuance of the series of
Securities provided for herein, the Company and the Trustee mutually covenant
and agree for the equal and proportionate benefit of the Holders of the
Securities of such series as follows:

                                  ARTICLE One

            RELATION TO INDENTURE; DEFINITIONS; RULES OF CONSTRUCTION

      SECTION 1.1 Relation to Indenture. This Supplemental Indenture constitutes
an integral part of the Indenture. This Supplemental Indenture shall only apply
to the series of Securities issued pursuant hereto and shall not apply to any
other series of securities issued pursuant to the Base Indenture.

      SECTION 1.2 Definitions. For all purposes of this Supplemental Indenture,
the following terms shall have the respective meanings set forth in this
Section.



            "Additional Interest" has the meaning set forth in Section 2(c) of
      the Registration Agreement.

            "Additional Securities" has the meaning set forth in Section 2.1(b)
      hereof.

            "Applicable Procedures" means, with respect to any transfer or
      transaction involving a Regulation S Global Security or beneficial
      interest therein, the rules and procedures of the Depositary for such
      Regulation S Global Security, to the extent applicable to such transaction
      and as in effect from time to time.

            "Clearstream" means Clearstream Banking, societe anonyme,
      Luxembourg, or its successors, as operator of the Clearstream System.

            "Definitive Security" means a certificated Security that does not
      include the Global Securities Legend.

            "Depositary" means The Depository Trust Company, its nominees and
      their respective successors.

            "Euroclear" means Euroclear Bank S.A./N.V., or its successors, as
      operator of the Euroclear System.

            "Exchange Securities" means the 6.70% Series B Senior Debentures due
      May 1, 2034, identical in all respects to the Initial Securities, except
      for references to series and not containing the Restricted Securities
      Legend.

            "Global Securities" has the meaning set forth in Section 2.2(b)
      hereof.

            "Global Securities Legend" means the legend set forth under that
      caption in Exhibit A to this Supplemental Indenture.

            "IAI" means an institutional "accredited investor" as described in
      Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is not a
      QIB.

            "IAI Global Securities" has the meaning set forth in Section 2.2(b).

            "IAI Securities" means all Initial Securities held by an IAI.

            "Initial Purchasers" means Citigroup Global Markets Inc., Morgan
      Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc of America
      Securities LLC, J.P. Morgan Securities Inc. and PNC Capital Markets, Inc.

            "Initial Securities" means the 6.70% Series A Senior Debentures due
      May 1, 2034, issued under the Indenture, that contain the Restricted
      Securities Legend.

            "Original Issue Date" of any Security (or portion thereof) means the
      date of first issuance of such Security under the Indenture.

                                      -2-


            "Participant" means members of, or participants in, the Depositary,
      Euroclear, Clearstream, as applicable, and, with respect to The Depository
      Trust Company, shall include Euroclear and Clearstream.

            "Private Exchange" means an offer by the Company, pursuant to the
      Registration Agreement, to issue and deliver to certain purchasers, in
      exchange for the Initial Securities held by such purchasers as part of
      their initial distribution, a like aggregate principal amount of Private
      Exchange Securities.

            "Private Exchange Securities" means the 6.70% Series C Senior
      Debentures due May 1, 2034, identical in all respects to the Initial
      Securities, except for references to series, issued in exchange for
      Initial Securities pursuant to the Indenture in connection with the
      Private Exchange pursuant to the Registration Agreement.

            "Purchase Agreement" means the Purchase Agreement dated April 27,
      2004, between the Company and the Initial Purchasers.

            "QIB" means a "qualified institutional buyer" as defined in Rule
      144A.

            "Registered Exchange Offer" means the offer by the Company, pursuant
      to the Registration Agreement, to certain Holders of Initial Securities,
      to issue and deliver to such Holders, in exchange for their Initial
      Securities, a like aggregate principal amount of Exchange Securities
      registered under the Securities Act.

            "Registration Agreement" means the Exchange and Registration Rights
      Agreement, dated April 30, 2004, between the Company and the Initial
      Purchasers.

            "Registration Default" has the meaning set forth in Section 2(c) of
      the Registration Agreement.

            "Regulation S" means Regulation S under the Securities Act.

            "Regulation S Global Security" has the meaning set forth in Section
      2.2(b) hereof.

            "Regulation S Securities" means all Initial Securities offered and
      sold outside the United States in reliance on Regulation S.

            "Restricted Period" with respect to any Securities means the period
      of 40 consecutive days beginning on and including the later of (i) the day
      on which such Securities are first offered to persons other than
      distributors (as defined in Regulation S under the Securities Act) in
      reliance on Regulation S and (ii) the Original Issue Date with respect to
      such Securities.

            "Restricted Securities Legend" means the legend set forth in Section
      2.3(e)(i) hereof.

            "Rule 144A" means Rule 144A under the Securities Act.

                                      -3-


            "Rule 144A Global Security" has the meaning set forth in Section
      2.2(b) hereof.

            "Rule 144A Securities" means all Initial Securities offered and sold
      to QIBs in reliance on Rule 144A.

            "Securities Act" means the Securities Act of 1933, as amended.

            "Securities" means the Initial Securities, the Exchange Securities,
      the Additional Securities and the Private Exchange Securities; provided,
      however, that the Initial Securities, the Exchange Securities, the
      Additional Securities, if any, and the Private Exchange Securities, if
      any, shall be treated as one series for all purposes under the Indenture.

            "Securities Custodian" means the custodian with respect to a Global
      Security (as appointed by the Depositary) or any successor person thereto,
      who initially will be the Trustee.

            "Shelf Registration Statement" means a registration statement filed
      by the Company in connection with the offer and sale of the Initial
      Securities or Private Exchange Securities pursuant to Section 2(b) of the
      Registration Agreement.

            "Transfer Restricted Securities" means any Definitive Securities and
      any other Securities that bear or are required to bear the Restricted
      Securities Legend.

      SECTION 1.3 Rules of Construction. For all purposes of this Supplemental
Indenture:

      (a) capitalized terms used herein without definition shall have the
meanings specified in the Base Indenture;

      (b) all references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this Supplemental
Indenture;

      (c) the terms "herein," "hereof,' "hereunder" and other words of similar
import refer to this Supplemental Indenture; and

      (d) in the event of a conflict with the terms or definitions in the Base
Indenture, the terms and definitions in this Supplemental Indenture shall
control.

                                  ARTICLE TWO

                             TERMS OF THE SECURITIES

      SECTION 2.1 Establishment of Terms of the Securities. There is hereby
established a series of Securities of the Company for issuance under the
Indenture. The Securities shall have the terms set forth in the Base Indenture,
as modified by the terms set forth in this Article Two of this Supplemental
Indenture.

      (a) Title of the series of Securities: 6.70% Senior Debentures due May 1,
2034.

                                      -4-


      (b) The Securities will be initially issued in an aggregate principal
amount of $300,000,000 (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Sections 304, 305, 306 and 905 of the Base Indenture and Section 2.3
hereof of the Supplemental Indenture or pursuant to and in accordance with the
terms of the Registration Agreement); provided, that the Company may, without
the consent of holders of the then outstanding Securities, issue additional
Securities having the same ranking and the same interest rate, maturity and
other terms as the Securities, which additional Securities will constitute a
single series of Securities under the Indenture (any such Securities, the
"Additional Securities").

      (c) The Securities shall be issued only as Registered Securities.

      (d) The Securities shall be issued only in global form, except as
otherwise expressly provided in the Indenture.

      (e) The Securities are not subject to any mandatory redemption or
repurchase by the Company or any sinking fund.

      (f) The Securities are redeemable at the option of the Company in the
manner and on the terms set forth in the Indenture and Sections 2 and 3 of the
Securities.

      (g) The Securities are not convertible into or exchangeable for common
stock or other securities of the Company.

      (h) The amount of payments or principal of or premium, if any, with
respect to the Securities shall not be determined with reference to an index,
formula or other method.

      (i) The Company will not pay Additional Amounts on the Securities.

      SECTION 2.2 Form and Dating of the Securities.

      (a) General. The Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A hereto. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Security shall be dated the date of its
authentication.

      The terms and provisions contained in the Securities set forth in Exhibit
A shall constitute, and are hereby expressly made, a part of this Supplemental
Indenture, and the Company and the Trustee, by their execution and delivery of
this Supplemental Indenture, expressly agree to such terms and provisions and to
be bound thereby. However, to the extent any provision of any Security conflicts
with the express provisions of the Indenture, the provisions of the Indenture
shall govern and be controlling.

      The Initial Securities issued on the date hereof will be (i) offered and
sold by the Company pursuant to the Purchase Agreement and (ii) resold by the
Initial Purchasers initially only to (A) QIBs in reliance on Rule 144A and (B)
Persons other than U.S. Persons (as defined in Regulation S) in reliance on
Regulation S. Such Initial Securities may thereafter be

                                      -5-


transferred to, among others, QIBs, purchasers in reliance on Regulation S and,
except as set forth below, IAIs in accordance with Rule 501.

      The Company hereby designates The Depository Trust Company as the initial
Depositary for the Global Securities.

      (b) Global Securities with Restricted Securities Legend. The Rule 144A
Securities shall be issued initially in the form of one or more permanent global
Securities in definitive, fully registered form (collectively, the "Rule 144A
Global Security") and the Regulation S Securities shall be issued initially in
the form of one or more global Securities (collectively, the "Regulation S
Global Security"), in each case without interest coupons and bearing the Global
Securities Legend and the Restricted Securities Legend, which shall be deposited
on behalf of the purchasers of the Securities represented thereby with the
Securities Custodian, and registered in the name of the Depositary or a nominee
of the Depositary, duly executed by the Company and authenticated by the Trustee
as provided in the Indenture. One or more global securities in definitive, fully
registered form without interest coupons and bearing the Global Securities
Legend and the Restricted Securities Legend (collectively, the "IAI Global
Security") shall also be issued on the date of this Supplemental Indenture,
deposited with the Securities Custodian, and registered in the name of the
Depositary or a nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture to accommodate
transfers of beneficial interests in the Securities to IAIs subsequent to the
initial distribution. Beneficial ownership interests in the Regulation S Global
Security shall not be exchangeable for interests in the Rule 144A Global
Security, the IAI Global Security or any other Security without a Restricted
Securities Legend until the expiration of the Restricted Period. The Rule 144A
Global Security, the IAI Global Security and the Regulation S Global Security
are each referred to herein as a "Global Security" and are collectively referred
to herein as "Global Securities." The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.

      (c) Book-Entry Provisions for Securities with Restricted Securities
Legend. This Section 2.2(c) shall apply only to a Global Security deposited with
or on behalf of the Depositary. The Company shall execute and the Trustee shall,
in accordance with this Section 2.2(c) and pursuant to an order of the Company,
authenticate and deliver initially one or more Global Securities that (i) shall
be registered in the name of the Depositary for such Global Security or Global
Securities or the nominee of such Depositary and (ii) shall be delivered by the
Trustee to such Depositary or pursuant to such Depositary's instructions or held
by the Securities Custodian.

      Participants shall have no rights under the Indenture with respect to any
Global Security held on their behalf by the Depositary or by the Securities
Custodian or under such Global Security, and the Depositary may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or impair, as between the


Depositary and its Participants, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.

      (d) Definitive Securities with Restricted Securities Legend. Except as
provided in Section 2.4, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of Definitive Securities.

      SECTION 2.3 Transfer and Exchange. The provisions of this Section 2.3
shall apply only to transfer restricted Securities. All other transfers and
exchanges shall be governed by Section 305 of the Base Indenture.

      (a) Transfer and Exchange of Definitive Securities. When Definitive
Securities with Restricted Securities Legend are presented to the Registrar with
a request:

            (i) to register the transfer of such Definitive Securities; or

            (ii) to exchange such Definitive Securities for an equal principal
      amount of Definitive Securities of other authorized denominations, the
      Registrar shall register the transfer or make the exchange as requested if
      its reasonable requirements for such transaction are met; provided,
      however, that the Definitive Securities surrendered for transfer or
      exchange:

                  (A) shall be duly endorsed or accompanied by a written
            instrument of transfer in form reasonably satisfactory to the
            Company and the Registrar, duly executed by the Holder thereof or
            his attorney duly authorized in writing; and

                  (B) are accompanied by the following additional information
            and documents, as applicable:

                        (1) if such Definitive Securities are being delivered to
                  the Registrar by a Holder for registration in the name of such
                  Holder, without transfer, a certification from such Holder to
                  that effect (in the form set forth on the reverse side of the
                  Initial Security); or

                        (2) if such Definitive Securities are being transferred
                  to the Company, a certification to that effect (in the form
                  set forth on the reverse side of the Initial Security); and

                  (C) if such Definitive Securities are being transferred
            pursuant to an exemption from registration in accordance with Rule
            144 under the Securities Act or in reliance upon another exemption
            from the registration requirements of the Securities Act, (i) a
            certification to that effect (in the form set forth on the reverse
            side of the Security) and (ii) if the Company so requests, an
            opinion of counsel or other evidence reasonably satisfactory to it
            as to the compliance with the restrictions set forth in the legend
            set forth in Section 2.3(e)(i).

      (b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security with a Restricted
Securities Legend may not be

                                      -7-


exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the Trustee of
a Definitive Security, duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
together with:

            (i) certification (in the form set forth on the reverse side of the
      Initial Security) that such Definitive Security is being transferred (A)
      to a QIB in accordance with Rule 144A, (B) to an IAI that has furnished to
      the Trustee a signed letter substantially in the form of Exhibit B, (C)
      outside the United States in an offshore transaction within the meaning of
      Regulation S and in compliance with Rule 904 under the Securities Act or
      (D) pursuant to registration under the Securities Act; and

            (ii) written instructions directing the Trustee to make, or to
      direct the Securities Custodian to make, an adjustment on its books and
      records with respect to such Global Security to reflect an increase in the
      aggregate principal amount of the Securities represented by the Global
      Security, such instructions to contain information regarding the
      Depositary account to be credited with such increase, then the Trustee
      shall cancel such Definitive Security and cause, or direct the Securities
      Custodian to cause, in accordance with the standing instructions and
      procedures existing between the Depositary and the Securities Custodian,
      the aggregate principal amount of Securities represented by the Global
      Security to be increased by the aggregate principal amount of the
      Definitive Security to be exchanged and shall credit or cause to be
      credited to the account of the Person specified in such instructions a
      beneficial interest in the Global Security equal to the principal amount
      of the Definitive Security so canceled. If no Global Securities are then
      outstanding and the Global Security has not been previously exchanged for
      certificated securities pursuant to Section 2.4, the Company shall issue
      and the Trustee shall authenticate, upon written order of the Company in
      the form of an Officers' Certificate, a new Global Security in the
      appropriate principal amount.

      (c) Transfer and Exchange of Global Securities.

            (i) The transfer and exchange of Global Securities or beneficial
      interests therein shall be effected through the Depositary, in accordance
      with the Indenture (including applicable restrictions on transfer set
      forth herein, if any) and the procedures of the Depositary therefor. A
      transferor of a beneficial interest in a Global Security shall deliver a
      written order given in accordance with the Depositary's procedures
      containing information regarding the Participant account of the Depositary
      to be credited with a beneficial interest in such Global Security or
      another Global Security and such account shall be credited in accordance
      with such order with a beneficial interest in the applicable Global
      Security and the account of the Person making the transfer shall be
      debited by an amount equal to the beneficial interest in the Global
      Security being transferred. Transfers by an owner of a beneficial interest
      in a Rule 144A Global Security or an IAI Global Security to a transferee
      who takes delivery of such interest through a Regulation S Global
      Security, whether before or after the expiration of the Restricted Period,
      shall be made only upon receipt by the Trustee of a certification from the
      transferor to the effect that such transfer is being made in accordance
      with Regulation S or (if available) Rule 144 under the Securities Act and
      that, if such transfer is being made prior to the expiration of

                                      -8-


      the Restricted Period, the interest transferred shall be held immediately
      thereafter through Euroclear or Clearstream. In the case of a transfer of
      a beneficial interest in either a Regulation S Global Security or a Rule
      144A Global Security for an interest in an IAI Global Security, the
      transferee must furnish a signed letter substantially in the form of
      Exhibit B to the Trustee.

            (ii) If the proposed transfer is a transfer of a beneficial interest
      in one Global Security to a beneficial interest in another Global
      Security, the Registrar shall reflect on its books and records the date
      and an increase in the principal amount of the Global Security to which
      such interest is being transferred in an amount equal to the principal
      amount of the interest to be so transferred, and the Registrar shall
      reflect on its books and records the date and a corresponding decrease in
      the principal amount of Global Security from which such interest is being
      transferred.

            (iii) Notwithstanding any other provisions of this Supplemental
      Indenture (other than the provisions set forth in Section 2.4), a Global
      Security may not be transferred as a whole except by the Depositary to a
      nominee of the Depositary or by a nominee of the Depositary to the
      Depositary or another nominee of the Depositary or by the Depositary or
      any such nominee to a successor Depositary or a nominee of such successor
      Depositary.

            (iv) In the event that a Global Security is exchanged for Definitive
      Securities pursuant to Section 2.4 prior to the consummation of the
      Registered Exchange Offer or the effectiveness of the Shelf Registration
      Statement with respect to such Securities, such Securities may be
      exchanged only in accordance with such procedures as are substantially
      consistent with the provisions of this Section 2.3 (including the
      certification requirements set forth on the reverse of the Initial
      Securities intended to ensure that such transfers comply with Rule 144A,
      Regulation S or such other applicable exemption from registration under
      the Securities Act, as the case may be) and such other procedures as may
      from time to time be adopted by the Company.

      (d) Restrictions on Transfer of Regulation S Global Security.

            (i) Prior to the expiration of the Restricted Period, interests in a
      Regulation S Global Security may only be held through Euroclear or
      Clearstream. During the Restricted Period, beneficial ownership interests
      in a Regulation S Global Security may only be sold, pledged or transferred
      through Euroclear or Clearstream in accordance with the Applicable
      Procedures and only (A) to the Company, (B) so long as such security is
      eligible for resale pursuant to Rule 144A, to a person whom the selling
      holder reasonably believes is a QIB that purchases for its own account or
      for the account of a QIB to whom notice is given that the resale, pledge
      or transfer is being made in reliance on Rule 144A, (C) in an offshore
      transaction in accordance with Regulation S, (D) pursuant to an exemption
      from registration under the Securities Act provided by Rule 144 (if
      applicable) under the Securities Act, (E) to an IAI purchasing for its own
      account, or for the account of such an IAI, in a minimum principal amount
      of Securities of $250,000 or (F) pursuant to an effective registration
      statement under the Securities Act, in each case in accordance with any
      applicable securities laws of any state of the United States. Prior to the

                                      -9-


      expiration of the Restricted Period, transfers by an owner of a beneficial
      interest in a Regulation S Global Security to a transferee who takes
      delivery of such interest through a Rule 144A Global Security or a IAI
      Global Security shall be made only in accordance with the Applicable
      Procedures and upon receipt by the Trustee of a written certification from
      the transferor of the beneficial interest in the form provided on the
      reverse of the Initial Security to the effect that such transfer is being
      made to (i) a person whom the transferor reasonably believes is a QIB
      within the meaning of Rule 144A in a transaction meeting the requirements
      of Rule 144A or (ii) an IAI purchasing for its own account, or for the
      account of such an IAI, in a minimum principal amount of the Securities of
      $250,000. Such written certification shall no longer be required after the
      expiration of the Restricted Period. In the case of a transfer of a
      beneficial interest in a Regulation S Global Security for an interest in a
      IAI Global Security, the transferee must furnish a signed letter
      substantially in the form of Exhibit B to the Trustee.

            (ii) Upon the expiration of the Restricted Period, beneficial
      ownership interests in a Regulation S Global Security shall be
      transferable in accordance with applicable law and the other terms of the
      Indenture.

      (e) Legends for Securities

            (i) Except as permitted by the following paragraphs (ii), (iii),
      (iv) or (vi), each Security certificate evidencing the Global Securities
      and the Definitive Securities (and all Securities issued in exchange
      therefor or in substitution thereof) shall bear a legend in substantially
      the following form (each defined term in the legend being defined as such
      for purposes of the legend only):

            THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
            1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF
            ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY
            INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
            TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
            ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
            FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.

            THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
            OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE
            (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER
            THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
            WHICH EITHER THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
            OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY
            (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT
            HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
            LONG

                                      -10-


            AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO
            A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
            AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR
            ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
            BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
            RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
            OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
            THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
            FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
            THE RIGHT OF THE COMPANY AND THE TRUSTEE PRIOR TO ANY SUCH OFFER,
            SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO REQUIRE THE
            DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER
            INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE
            REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
            TERMINATION DATE.

      Each Security evidencing a Global Security offered and sold to QIBs
      pursuant to Rule 144A shall bear a legend in substantially the following
      form:

            EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
            OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS
            OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

      Each Definitive Security shall bear the following additional legend:

            IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
            REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
            AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
            TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

            (ii) Upon any sale or transfer of a Transfer Restricted Security
      that is a Definitive Security, the Registrar shall permit the Holder
      thereof to exchange such Transfer Restricted Security for a Definitive
      Security that does not bear the legends set forth above and rescind any
      restriction on the transfer of such Transfer Restricted Security if the
      Holder certifies in writing to the Registrar that its request for such
      exchange was made in reliance on Rule 144 (such certification to be in the
      form set forth on the reverse of the Initial Security).

                                      -11-


            (iii) After a transfer of any Initial Securities or Private Exchange
      Securities during the period of the effectiveness of a Shelf Registration
      Statement with respect to such Initial Securities or Private Exchange
      Securities, as the case may be, all requirements pertaining to the
      Restricted Securities Legend on such Initial Securities or such Private
      Exchange Securities shall cease to apply; provided, however, that the
      requirements that any such Initial Securities or such Private Exchange
      Securities be issued in global form shall continue to apply.

            (iv) Upon the consummation of a Registered Exchange Offer with
      respect to the Initial Securities pursuant to which Holders of such
      Initial Securities are offered Exchange Securities in exchange for their
      Initial Securities, all requirements pertaining to Initial Securities that
      Initial Securities be issued in global form shall continue to apply, and
      Exchange Securities in global form without the Restricted Securities
      Legend shall be available to Holders that exchange such Initial Securities
      in such Registered Exchange Offer.

            (v) Upon the consummation of a Private Exchange with respect to the
      Initial Securities pursuant to which Holders of such Initial Securities
      are offered Private Exchange Securities in exchange for their Initial
      Securities, all requirements pertaining to such Initial Securities that
      Initial Securities be issued in global form shall continue to apply, and
      Private Exchange Securities in global form with the Restricted Securities
      Legend shall be available to Holders that exchange such Initial Securities
      in such Private Exchange.

            (vi) Upon a sale or transfer after the expiration of the Restricted
      Period of any Initial Security acquired pursuant to Regulation S, all
      requirements that such Initial Security bear the Restricted Securities
      Legend shall cease to apply and the requirements requiring any such
      Initial Security be issued in global form shall continue to apply.

      (f) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.

      (g) Obligations with Respect to Transfers and Exchanges of Securities.

            (i) To permit registrations of transfers and exchanges in accordance
      with the terms of the Indenture, the Company shall execute and the Trustee
      shall authenticate, Definitive Securities and Global Securities at the
      Registrar's request.

                                      -12-


            (ii) All Securities issued upon any transfer or exchange pursuant to
      the terms of the Indenture shall evidence the same debt and shall be
      entitled to the same benefits under the Indenture as the Securities
      surrendered upon such transfer or exchange.

      (h) No Obligation of the Trustee.

            (i) The Trustee shall have no responsibility or obligation to any
      beneficial owner of a Global Security, a member of, or a Participant in
      the Depositary or any other Person with respect to the accuracy of the
      records of the Depositary or its nominee or of any Participant or member
      thereof, with respect to any ownership interest in the Securities or with
      respect to the delivery to any participant, member, beneficial owner or
      other Person (other than the Depositary) of any notice (including any
      notice of redemption or repurchase) or the payment of any amount, under or
      with respect to such Securities. All notices and communications to be
      given to the Holders and all payments to be made to Holders under the
      Securities shall be given or made only to the registered Holders (which
      shall be the Depositary or its nominee in the case of a Global Security).
      The rights of beneficial owners in any Global Security shall be exercised
      only through the Depositary subject to the applicable rules and procedures
      of the Depositary. The Trustee may rely and shall be fully protected in
      relying upon information furnished by the Depositary with respect to its
      members, participants and any beneficial owners.

            (ii) The Trustee shall have no obligation or duty to monitor,
      determine or inquire as to compliance with any restrictions on transfer
      imposed under the Indenture or under applicable law with respect to any
      transfer of any interest in any Security (including any transfers between
      or among Depositary participants, members or beneficial owners in any
      Global Security) other than to require delivery of such certificates and
      other documentation or evidence as are expressly required by, and to do so
      if and when expressly required by, the terms of the Indenture, and to
      examine the same to determine substantial compliance as to form with the
      express requirements hereof.

      SECTION 2.4 Definitive Securities.

      (a) A Global Security deposited with the Depositary or with the Trustee as
Securities Custodian pursuant to Section 2.2 shall be transferred to the
beneficial owners thereof in the form of Definitive Securities in an aggregate
principal amount equal to the principal amount of such Global Security, in
exchange for such Global Security, only if such transfer complies with Section
2.3 and (i) the Company notifies the Trustee that the Depositary is no longer
willing or able to act as a depositary or clearing system for the Securities or
the Depositary ceases to be a "clearing agency" registered under the Exchange
Act, and a successor depositary or clearing system is not appointed by the
Company within 90 days of such notice or cessation, (ii) the Company, in its
sole discretion, notifies the Trustee in writing that it elects to cause the
issuance of Definitive Securities under the Indenture, or (iii) upon the
occurrence and continuation of an Event of Default.

      (b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver,

                                      -13-


upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this Section 2.4 shall be
executed, authenticated and delivered only in denominations of $1,000 of
principal amount and any integral multiple thereof and registered in such names
as the Depositary shall direct. Any certificated Initial Security in the form of
a Definitive Security delivered in exchange for an interest in the Global
Security shall, except as otherwise provided by Section 2.3, bear the Restricted
Securities Legend.

      (c) The registered Holder of a Global Security may grant proxies and
otherwise authorize any Person, including Participants and Persons that may hold
interests through Participants, to take any action which a Holder is entitled to
take under the Indenture or the Securities.

      (d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.

      SECTION 2.5 Certain Events of Default. If any Event of Default with
respect to the Company specified in clauses (6) and (7) of Section 501 of the
Indenture occurs, all the principal of and accrued and unpaid interest on the
Securities then outstanding shall become automatically due and payable without
any declaration or other act on the part of the Trustee or any Holder of
Securities.

                                 ARTICLE THREE

                            MISCELLANEOUS PROVISIONS

      SECTION 3.1 Ratification. The Base Indenture, as supplemented by this
Supplemental Indenture, is in all respects hereby adopted, ratified and
confirmed.

      SECTION 3.2 Counterparts. This Supplemental Indenture may be executed in
any number of counterparts, each of which when so executed shall be deemed an
original, and all such counterparts shall together constitute but one and the
same instrument.

      SECTION 3.3 Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE SECURITIES
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.

      SECTION 3.4 Trustee. The Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Supplemental Indenture, except
with respect to the execution hereof, nor shall the Trustee be responsible for
or in respect of the recitals contained herein.

                            [signature page follows]

                                      -14-


      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 1 to be duly executed as of the day and year first above written.

                                         CNF INC.

                                         By:____________________________________
                                         Name:
                                         Title:

                                         THE BANK OF NEW YORK,
                                         as Trustee

                                         By:____________________________________
                                         Name:
                                         Title:

                                      -15-


                         EXHIBIT A -- Form of Debenture

                                    CNF INC.

        6.70% [Series A] [Series B] [Series C] Senior Debenture due 2034

                    [global securities legend, as applicable]

      Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Company (as
defined below) or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.

No. [____]                                                      U.S.$[_________]
                                                             CUSIP No.: [______]
                                                               ISIN No.:[______]

      CNF Inc., a corporation duly organized and existing under the laws of
Delaware (herein called the "Company," which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the principal sum set
forth above or such other principal sum on the Schedule attached hereto (which
shall not exceed U.S.$300,000,000) on May 1, 2034, and to pay interest thereon
from April 30, 2004 or from the most recent interest payment date to which
interest has been paid or duly provided for, semiannually on May 1 and November
1 in each year, commencing November 1, 2004, at the rate of 6.70% per annum,
until the principal hereof is paid or made available for payment; provided,
however, that Additional Interest shall accrue on the Securities as provided in
the Registration Agreement if there is a Registration Default (as defined in the
Registration Agreement).

      The Company shall notify the Trustee within three Business Days after the
occurrence of a Registration Default, and Additional Interest shall be paid by
depositing with the Trustee, in trust for the benefit of the Holders entitled to
receive the Additional Interest, on or before the applicable semiannual interest
payment date, immediately available funds in sums sufficient to pay the
Additional Interest then due. The Additional Interest due shall be payable on
each interest payment date to the record Holder entitled to receive the interest
payment to be paid on such date as set forth in the Indenture.

      The interest (and Additional Interest, if any) so payable, and punctually
paid or duly provided for, on any interest payment date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or any predecessor
thereto) is registered at the close of business on the regular record date for
such interest, which shall be the April 15 or October 15

                                      A-1


(whether or not a Business Day), as the case may be, next preceding such
interest payment date. Any such interest (and Additional Interest, if any) not
so punctually paid or duly provided for will forthwith cease to be payable to
the Holder on such regular record date and may either be paid to the Person in
whose name this Security (or any predecessor thereto) is registered at the close
of business on a special record date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such special record
date, or be paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Securities of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

      Payment of the principal of (and premium, if any) and interest (and
Additional Interest, if any) on this Security will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of interest
may be made by check mailed to the address of the Person entitled thereto as
such address shall appear in the Security Register or by wire transfer to an
account maintained by the Person entitled thereto as specified in the Security
Register, provided that such Person shall have given the Trustee written wire
instructions at least five Business Days prior to the applicable Interest
Payment Date.

      Any payment required to be made in respect of the Securities on a date
that is not a Business Day may be made on the next succeeding Business Day with
the same force and effect as if made on that date. No additional interest shall
accrue as a result of a delayed payment.

      Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.

                        [Signatures appear on next page]

                                      A-2


         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                         CNF INC.

                                         By:____________________________________
                                            Name:
                                            Title:

                                         By:____________________________________
                                            Name:
                                            Title:

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

      This is one of the Securities of the series designated herein and referred
to in the within-mentioned Indenture.

Dated: April __, 2004                    THE BANK OF NEW YORK,
                                         as Trustee

                                         By:____________________________________
                                                  Authorized Signatory

                                      A-3


                       [FORM OF REVERSE SIDE OF SECURITY]

                         6.70% Senior Debenture due 2034

      Section 1. Indenture

      The Company issued the Securities under an Indenture, dated as of March 8,
2000, between the Company and The Bank of New York (as successor to Bank One
Trust Company, National Association), as the Trustee, and Supplemental Indenture
No. 1 thereto, dated as of April 30, 2004 (collectively, the "Indenture"). The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), as in effect on the date of the Indenture.
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all terms and provisions
of the Indenture, and Securityholders are referred to the Indenture and the
Trust Indenture Act for a statement of such terms and provisions.

      The Securities are unsecured obligations of the Company initially limited
to $300,000,000 aggregate principal amount at any one time outstanding. This
Security is one of the Initial Securities referred to in the Indenture. The
Securities include the Initial Securities and any Exchange Securities and
Private Exchange Securities issued in exchange for Initial Securities. The
Initial Securities, the Exchange Securities and the Private Exchange Securities
are treated as a single class of securities under the Indenture.

      Section 2. Optional Redemption

      The Securities may be redeemed at the option of the Company, in whole or
in part, at any time or from time to time. The redemption price for the
Securities to be redeemed on any redemption date will be equal to the greater
of: (i) 100% of the principal amount of the Securities being redeemed on the
redemption date; or (ii) the sum of the present values of the remaining
scheduled payments of principal of and interest on the Securities being redeemed
on that redemption date (not including any portion of any payments of interest
accrued to the redemption date) discounted to the redemption date on a
semiannual basis at the Treasury Rate, plus 35 basis points, as determined by
the Quotation Agent, plus, in either case, accrued and unpaid interest on the
principal amount of the Securities being redeemed to the redemption date.
Notwithstanding the foregoing, installments of interest on Securities that are
due and payable on interest payment dates falling on or prior to the relevant
redemption date will be payable on the interest payment date to the registered
Holders as of the close of business on the relevant record date according to the
terms and provisions of the Securities and the Indenture. The redemption price
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months.

      "Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the remaining
term of the Securities to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the Securities.

                                      A-4


      "Comparable Treasury Price" means, with respect to any redemption date for
the Securities, (A) the average of the Reference Treasury Dealer Quotations for
such redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if fewer than three such Reference Treasury
Dealer Quotations are obtained, the average of all such Quotations, or (C) if
only one Reference Treasury Dealer Quotation is received, such Quotation.

      "Quotation Agent" means a Reference Treasury Dealer appointed by the
Company.

      "Reference Treasury Dealer" means (A) Citigroup Global Markets Inc.,
Morgan Stanley & Co. Incorporated, ABN AMRO Incorporated, Banc of America
Securities LLC, J.P. Morgan Securities Inc. and PNC Capital Markets, Inc. (or
their respective affiliates which are Primary Treasury Dealers), and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company will substitute therefor another Primary
Treasury Dealer; and (B) any other Primary Treasury Dealer(s) selected by the
Company.

      "Reference Treasury Dealer Quotation" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined by
the Company, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Company by such Reference Treasury Dealer at 5:00 p.m. (New York
City time) on the third business day preceding such redemption date.

      "Treasury Rate" means, with respect to any redemption date for the
Securities, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.

      Section 3. Notice of Redemption

      Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each Holder of Securities to be redeemed at
his or her registered address. Once notice of redemption is mailed, the
Securities called for redemption will become due and payable on the redemption
date and at the applicable redemption price, plus accrued interest to the
redemption date. Securities in denominations larger than $1,000 of principal
amount may be redeemed in part but only in whole multiples of $1,000 of
principal amount. If money sufficient to pay the redemption price of and accrued
and unpaid interest accrued through the redemption date and liquidated damages,
if any, on all Securities (or portions thereof) to be redeemed on the redemption
date is deposited with the Paying Agent on or before the redemption date and
certain other conditions as specified in the Indenture are satisfied, on and
after such date interest shall cease to accrue on such Securities (or such
portions thereof) called for redemption.

      Section 4. Sinking Fund

      The Securities are not subject to any sinking fund.

      Section 5. Denominations; Transfer; Exchange

                                      A-5


      The Securities are in registered form without coupons in denominations of
$1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
securities registrar and the Trustee may require a Holder, among other things,
to furnish appropriate endorsements or transfer documents and to pay any taxes
required by law or permitted by the Indenture. The securities registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or to transfer or exchange any Securities for a
period of 15 days prior to the mailing of a notice of redemption of Securities
to be redeemed.

      Section 6. Persons Deemed Owners

      The registered Holder of this Security may be treated as the owner of it
for all purposes.

      Section 7. Unclaimed Money

      If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent shall pay the money back to the Company
at its written request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

      Section 8. Discharge and Defeasance

      Subject to certain conditions, the Company at any time may terminate some
of or all its obligations under the Securities and the Indenture if the Company
deposits with the Trustee money or U.S. Government Obligations for the payment
of principal of and interest on the Securities to redemption or maturity, as the
case may be.

      Section 9. Trustee Dealings with the Company

      Subject to certain limitations imposed by the Trust Indenture Act, the
Trustee under the Indenture, in its individual or any other capacity, may become
the owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.

      Section 10. No Recourse Against Others

      A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.

      Section 11. Authentication

                                      A-6


      This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

      Section 12. Governing Law

      THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

      Section 13. CUSIP Numbers

      Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.

      Section 14. Defined Terms.

      All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. All terms used in this
Security which are defined in the Registration Agreement shall have the meanings
assigned to them in the Registration Agreement.

      Section 15. Holders' Compliance with Registration Agreement

      Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein. In the event of a
conflict between the terms of this Security and the Registration Agreement, the
terms of the Registration Agreement shall control.

      The Company will furnish to any Holder of Securities upon written request
and without charge to the Holder a copy of the Indenture which has in it the
text of this Security.

                                      A-7


                    CERTIFICATE TO BE DELIVERED UPON EXCHANGE
                    OR REGISTRATION OF TRANSFER OF SECURITIES

      This Certificate relates to $_____________ principal amount of Securities
held in (check applicable space) ___ book-entry or ___ definitive form by
_________________________ (the "Transferor").

The Transferor (check one box below):

[ ]   has requested the Trustee by written order to deliver in exchange for its
      beneficial interest in the Global Security held by the Depositary a
      Security or Securities in definitive, registered form of authorized
      denominations in an aggregate principal amount equal to its beneficial
      interest in such Global Security (or the portion thereof indicated above);
      or

[ ]   has requested the Trustee by written order to exchange or register the
      transfer of a Security or Securities.

      In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933, as amended (the "Securities Act"), the
undersigned confirms that such Securities are being transferred in accordance
with its terms:

CHECK ONE BOX BELOW

      (1)   [ ]   to the Company; or

      (2)   [ ]   pursuant to an effective registration statement under the
                  Securities Act; or

      (3)   [ ]   inside the United States to a "qualified institutional buyer"
                  (as defined in Rule 144A under the Securities Act of 1933)
                  that purchases for its own account or for the account of a
                  qualified institutional buyer to whom notice is given that
                  such transfer is being made in reliance on Rule 144A, in each
                  case pursuant to and in compliance with Rule 144A under the
                  Securities Act; or

      (4)   [ ]   outside the United States in an offshore transaction within
                  the meaning of Regulation S under the Securities Act in
                  compliance with Rule 904 under the Securities Act; or

      (5)   [ ]   to an institutional "accredited investor" (as defined in Rule
                  501(a)(1), (2), (3) or (7) under the Securities Act) that has
                  furnished to the Trustee a signed letter containing certain
                  representations and agreements; or

      (6)   [ ]   pursuant to another available exemption from registration
                  provided by Rule 144 under the Securities Act.

      Prior to the expiration of the period referred to in Rule 144(k), unless
one of the boxes is checked, the Trustee will refuse to register any of the
Securities evidenced by this certificate in

                                      A-8


the name of any Person other than the registered holder thereof; provided,
however, that if box (4), (5) or (6) is checked, the Trustee may require, prior
to registering any such transfer of the Securities, such legal opinions,
certifications and other information satisfactory to the Company and the Trustee
to confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act.

                                         [INSERT NAME OF TRANSFEROR]

Dated:__________________________________

By:_____________________________________

                                      A-9


                              SCHEDULE OF EXCHANGES

      The following exchanges of a part of this Book-Entry Security have been
made:



                                                                Principal Amount of this      Signature of
 Date of      Amount of decrease in     Amount of increase in      Book-Entry Security    authorized signatory
Exchange       Principal Amount of       Principal Amount of     following such decrease     of Trustee or
             this Book-Entry Security  this Book-Entry Security       (or increase)        Security Custodian
                                                                              


                                      A-10


                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

________________________________________________________________________________
              (Print or type assignee's name, address and zip code)

________________________________________________________________________________
                  (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint _____________________________________agent to transfer
this Security on the books of the Company. The agent may substitute another to
act for him.

Date: ______________________ Your Signature: ___________________________________

________________________________________________________________________________
      Sign exactly as your name appears on the other side of this Security.

Signature Guaranteed

______________________________________
Participant in a Recognized Signature
Guarantee Medallion Program

By:___________________________________
         Authorized Signatory

                                      A-11


                                    EXHIBIT B

                  FORM OF TRANSFEREE LETTER OF REPRESENTATIONS

CNF Inc.
In care of
101 Barclay Street, Floor 21 West
New York, New York 10286
Attn: Corporate Trust Administration

Ladies and Gentlemen:

This certificate is delivered to request a transfer of $_________ principal
amount of the 6.70% Senior Debentures due 2034 (the "Securities") of CNF Inc.
(the "Company").

Upon transfer, the Securities would be registered in the name of the new
beneficial owner as follows:

Name:________________________

Address:_____________________

Taxpayer ID Number:__________

The undersigned represents and warrants to you that:

1. We are an institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended (the "Securities
Act")), purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.

2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing the Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a qualified institutional buyer under Rule 144A (a "QIB") that is purchasing
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) in an offshore
transaction within the meaning of, and in

                                       B-1


compliance with, Regulation S under the Securities Act, (e) to an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor", in each case in a
minimum principal amount of Securities of $250,000, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (f) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Restriction Termination Date of the Securities pursuant to clause (d), (e) or
(f) above to require the delivery of an opinion of counsel, certifications or
other information satisfactory to the Company and the Trustee.

TRANSFEREE:___________________

By:___________________________

                                      B-2

EX-4.4

                                                                     EXHIBIT 4.4

                                    CNF INC.

                        6.70% SENIOR DEBENTURES DUE 2034

                   EXCHANGE AND REGISTRATION RIGHTS AGREEMENT

                                                                  April 30, 2004

Citigroup Global Markets Inc.
Morgan Stanley & Co. Incorporated,
  As representatives of the Initial Purchasers
c/o Citigroup Global Markets Inc.
    388 Greenwich Street
    New York, New York  10013

Ladies and Gentlemen:

     CNF Inc., a Delaware corporation (the "Company"), proposes to issue and
sell to the Initial Purchasers (as defined herein) upon the terms set forth in
the Purchase Agreement (as defined herein) its 6.70% Senior Debentures due 2034.
As an inducement to the Initial Purchasers to enter into the Purchase Agreement
and in satisfaction of a condition to the obligations of the Initial Purchasers
thereunder, the Company agrees with the Initial Purchasers for the benefit of
holders (as defined herein) from time to time of the Registrable Securities (as
defined herein) as follows:

     1.   Certain Definitions. For purposes of this Agreement, the following
terms shall have the following respective meanings:

          "Additional Interest" shall have the meaning assigned thereto in
     Section 2(c) hereof.

          "Affiliate" shall have the meaning specified in Rule 405 under the
     Securities Act and the terms "controlling" and "controlled" shall have
     meanings correlative thereto.

          "Agreement" shall mean this Exchange and Registration Rights
     Agreement, as may be amended from time to time.

          "Base Interest" shall mean the interest that would otherwise accrue on
     the Securities under the terms thereof and the Indenture, without giving
     effect to the provisions of this Agreement.

          The term "broker-dealer" shall mean any broker or dealer registered
     with the Commission under the Exchange Act.



          "Business Day" shall mean any day other than a Saturday, a Sunday or a
     legal holiday or a day on which banking institutions or trust companies are
     authorized or obligated by law to close in New York City.

          "Closing Date" shall mean the date on which the Securities are
     initially issued.

          "Commission" shall mean the U.S. Securities and Exchange Commission,
     or any other federal agency at the time administering the Exchange Act or
     the Securities Act, whichever is the relevant statute for the particular
     purpose.

          "Effective Time," in the case of (i) an Exchange Registration, shall
     mean the time and date as of which the Commission declares the Exchange
     Registration Statement effective or as of which the Exchange Registration
     Statement otherwise becomes effective, and (ii) a Shelf Registration, shall
     mean the time and date as of which the Commission declares the Shelf
     Registration Statement effective or as of which the Shelf Registration
     Statement otherwise becomes effective.

          "Electing Holder" shall mean any holder of Registrable Securities that
     has returned a completed and signed Notice and Questionnaire to the Company
     in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, or any
     successor thereto, as the same shall be amended from time to time.

          "Exchange Offer" shall have the meaning assigned thereto in Section
     2(a) hereof.

          "Exchange Registration" shall have the meaning assigned thereto in
     Section 3(c) hereof.

          "Exchange Registration Statement" shall have the meaning assigned
     thereto in Section 2(a) hereof.

          "Exchange Securities" shall have the meaning assigned thereto in
     Section 2(a) hereof.

          "holder" shall mean each of the Initial Purchasers and other persons
     who acquire Registrable Securities from time to time (including any
     successors or assigns), in each case for so long as such person owns any
     Registrable Securities.

          "Indenture" shall mean the Indenture, dated as of March 8, 2000,
     between the Company and the Trustee, and supplemented by Supplemental
     Indenture No. 1 dated April 30, 2004, as the same shall be amended from
     time to time.

          "Initial Purchasers" shall mean the Initial Purchasers named in
     Schedule I to the Purchase Agreement.

                                       2



          "Losses" shall mean losses, claims, damages and liabilities (including
     legal or other expenses reasonably incurred in connection with
     investigating or defending any loss, claim, liability, damage or action).

          "New Securities" shall mean debt securities of the Company identical
     in all material respects to the Securities (except that the transfer
     restrictions shall be modified or eliminated, as appropriate).

          "Notice and Questionnaire" means a Notice of Registration Statement
     and Selling Securityholder Questionnaire substantially in the form of
     Exhibit A hereto.

          "person" shall mean a corporation, association, partnership,
     organization, business, individual, government or political subdivision
     thereof or governmental agency.

          "Purchase Agreement" shall mean the Purchase Agreement, dated as of
     April 27, 2004, between the Initial Purchasers and the Company relating to
     the Securities.

          "Registrable Securities" shall mean the Securities; provided, however,
     that a Security shall cease to be a Registrable Security when (i) in the
     circumstances contemplated by Section 2(a) hereof, the Security has been
     exchanged for an Exchange Security in an Exchange Offer as contemplated in
     Section 2(a) hereof (provided that any Exchange Security held by a
     broker-dealer participating in the Exchange Offer that, pursuant to the
     last two sentences of Section 2(a), is included in a prospectus for use in
     connection with resales by such broker-dealer shall be deemed to be a
     Registrable Security with respect to Sections 5 and 8 until resale of such
     Registrable Security has been effected within the 120-day period referred
     to in Section 2(a)); (ii) in the circumstances contemplated by Section 2(b)
     hereof, a Shelf Registration Statement registering such Security under the
     Securities Act has been declared or becomes effective and such Security has
     been sold or otherwise transferred by the holder thereof pursuant to and in
     a manner contemplated by such effective Shelf Registration Statement; (iii)
     such Security is sold pursuant to Rule 144 under circumstances in which any
     legend borne by such Security relating to restrictions on transferability
     thereof, under the Securities Act or otherwise, is removed by the Company
     or pursuant to the Indenture; (iv) such Security is eligible to be sold
     pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to
     be outstanding.

          "Registration Default" shall have the meaning assigned thereto in
     Section 2(c) hereof.

          "Registration Expenses" shall have the meaning assigned thereto in
     Section 4 hereof.

          "Resale Period" shall have the meaning assigned thereto in Section
     2(a) hereof.

                                       3



          "Restricted Holder" shall mean (i) a holder that is an affiliate of
     the Company within the meaning of Rule 405, (ii) a holder who acquires
     Exchange Securities outside the ordinary course of such holder's business,
     (iii) a holder who has arrangements or understandings with any person to
     participate in the Exchange Offer for the purpose of distributing Exchange
     Securities and (iv) a holder that is a broker-dealer, but only with respect
     to Exchange Securities received by such broker-dealer pursuant to an
     Exchange Offer in exchange for Registrable Securities acquired by the
     broker-dealer directly from the Company.

          "Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such
     rule promulgated under the Securities Act (or any successor provision), as
     the same may be amended from time to time.

          "Securities" shall mean, collectively, the 6.70% Senior Debentures due
     May 1, 2034 of the Company to be issued and sold to the Initial Purchasers,
     and securities issued in exchange therefor or in lieu thereof pursuant to
     the Indenture.

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
     any successor thereto, as the same may be amended from time to time.

          "Shelf Registration" shall have the meaning assigned thereto in
     Section 2(b) hereof.

          "Shelf Registration Statement" shall have the meaning assigned thereto
     in Section 2(b) hereof.

          "Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or
     any successor thereto, and the rules, regulations and forms promulgated
     thereunder, all as the same may be amended from time to time.

          "Trustee" shall mean The Bank of New York, as successor to Bank One
     Trust Company, National Association, or any successor thereof.

          "Underwritten Offering" shall mean a firm commitment offering of
     Securities by holders through an identified underwriter reasonably
     acceptable to the Company pursuant to a Shelf Registration Statement with
     respect to at least $20 million aggregate principal amount of Securities.

     Unless the context otherwise requires, any reference herein to a "Section"
or "clause" refers to a Section or clause, as the case may be, of this
Agreement, and the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Section or other subdivision.

     2.   Registration Under the Securities Act.

          (a)  Except as set forth in Section 2(b) below, the Company agrees to
file under the Securities Act, as soon as practicable, but no later than 90 days
after the Closing Date, a registration statement relating to an offer to
exchange (such registration

                                       4



statement, the "Exchange Registration Statement," and such offer, the "Exchange
Offer") any and all of the Securities for a like aggregate principal amount of
debt securities issued by the Company, which debt securities are substantially
identical to the Securities (and are entitled to the benefits of a trust
indenture which is substantially identical to the Indenture or is the Indenture
and which has been qualified under the Trust Indenture Act), except that they
have been registered pursuant to an effective registration statement under the
Securities Act and do not contain provisions for the Additional Interest
contemplated in Section 2(c) below (such new debt securities hereinafter called
"Exchange Securities"). The Company agrees to use its reasonable best efforts to
cause the Exchange Registration Statement to become effective under the
Securities Act as soon as practicable, but no later than 180 days after the
Closing Date. The Exchange Offer will be registered under the Securities Act on
the appropriate form and will comply in all material respects with all
applicable tender offer rules and regulations under the Exchange Act. The
Company further agrees to use its reasonable best efforts to commence and
complete the Exchange Offer promptly after the Effective Time and shall hold the
Exchange Offer open for not less than 20 Business Days and not more than 30
Business Days (unless otherwise required by applicable law) and exchange
Exchange Securities for all Registrable Securities that have been properly
tendered and not withdrawn on or prior to the expiration of the Exchange Offer.

     The Exchange Offer will be deemed to have been "completed" only if the debt
securities received by holders other than Restricted Holders in the Exchange
Offer for Registrable Securities are, upon receipt, transferable by each such
holder without restriction under the Securities Act and the Exchange Act and
without material restrictions under the blue sky or securities laws of a
substantial majority of the States of the United States of America. The Exchange
Offer shall be deemed to have been completed upon the earlier to occur of (i)
the Company having exchanged the Exchange Securities for all outstanding
Registrable Securities pursuant to the Exchange Offer and (ii) the Company
having exchanged, pursuant to the Exchange Offer, Exchange Securities for all
Registrable Securities that have been properly tendered and not withdrawn before
the expiration of the Exchange Offer, which shall be on a date that is not less
than 20 Business Days and not more than 30 Business Days following the
commencement of the Exchange Offer.

     The Company agrees (x) to include in the Exchange Registration Statement a
prospectus for use in any resales by any holder of Exchange Securities that is a
broker-dealer and (y) to keep such Exchange Registration Statement effective for
a period (the "Resale Period") beginning when Exchange Securities are first
issued in the Exchange Offer and ending upon the earlier of the expiration of
the 120th day after the Exchange Offer has been completed or such time as such
broker-dealers no longer own any Registrable Securities. With respect to such
Exchange Registration Statement, such holders shall have the benefit of the
rights of indemnification and contribution set forth in Sections 5(a), (c), (d)
and (e) hereof.

     The Company agrees, if requested by the Commission, that, prior to
effectiveness of the Exchange Registration Statement, it will provide a
supplemental letter to the Commission (A) stating that the Company is conducting
the Exchange Offer in reliance

                                       5



on the position of the Commission in Exxon Capital Holdings Corporation (pub.
avail. May 13, 1988) and Morgan Stanley and Co., Inc. (pub. avail. June 5,
1991); and (B) including a representation that the Company has not entered into
any arrangement or understanding with any person to distribute the New
Securities to be received in the Exchange Offer and that, to the Company's
knowledge, each holder participating in the Exchange Offer is acquiring the New
Securities in the ordinary course of business and has no arrangement or
understanding with any person to participate in the distribution of the New
Securities.

          (b)  If (i) on or prior to the time the Exchange Offer is completed
there is any change in law or to existing Commission interpretations such that
the Company is not permitted to effect the Exchange Offer as contemplated by
Section 2(a) hereof, (ii) for any other reason the Exchange Registration
Statement is not declared effective within 180 calendar days following the
Closing Date or the Exchange Offer is not consummated within 30 Business Days
after the Exchange Registration Statement is declared effective (provided that,
if the Exchange Registration Statement shall be declared effective after such
180-day period or if the Exchange Offer shall be consummated after such
30-Business Day period, then the Company's obligation under this clause (ii)
arising from the failure of the Exchange Registration Statement to be declared
effective within such 180-day period or the failure of the Exchange Offer to be
consummated within 30 Business Days after the Exchange Registration Statement
becomes effective, respectively, shall terminate), (iii) any Holder is not
eligible to participate in the Exchange Offer or elects to participate in the
Exchange Offer but does not receive freely tradeable Exchange Securities
pursuant to the Exchange Offer or (iv) upon the written request of any of the
Initial Purchasers within 90 days following the consummation of the Exchange
Offer with respect to Registrable Securities that are not permitted to be
exchanged for Exchange Securities in the Exchange Offer or if the Initial
Purchasers do not receive freely tradable Exchange Securities in the Exchange
Offer, then, in the case of each of clauses (i) through (iv), the Company shall,
in lieu of (or, in the case of clauses (iii) and (iv), in addition to)
conducting the Exchange Offer contemplated by Section 2(a), file under the
Securities Act as soon as practicable, but no later than the later of 30 days
after the time such obligation to file arises, a "shelf" registration statement
providing for the registration of, and the sale on a continuous or delayed basis
by the holders of, all of the Registrable Securities, pursuant to Rule 415 or
any similar rule that may be adopted by the Commission (such filing, the "Shelf
Registration" and such registration statement, the "Shelf Registration
Statement").

     The Company agrees to use its reasonable best efforts (x) to cause the
Shelf Registration Statement to become or be declared effective no later than
the later of 90 days after the date on which the Company is required to file
such Shelf Registration Statement as provided in the immediately preceding
paragraph and 180 days after the Closing Date and, subject to Section 2(f), to
keep such Shelf Registration Statement continuously effective for a period
ending on the earlier of the second anniversary of the Effective Time or such
time as there are no longer any Registrable Securities outstanding; provided,
however, that no holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement or to use the prospectus
forming a part thereof for resales of Registrable Securities unless such holder
is an Electing Holder, and (y) after

                                       6



the Effective Time of the Shelf Registration Statement, promptly upon the
request of any holder of Registrable Securities included therein that is not
then an Electing Holder, to take any action reasonably necessary to enable such
holder to use the prospectus forming a part thereof for resales of Registrable
Securities, including, without limitation, any action necessary to identify such
holder as a selling securityholder in the Shelf Registration Statement;
provided, however, that nothing in this clause (y) shall relieve any such holder
of the obligation to return a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(d)(iii) hereof prior to being named
therein. The Company further agrees to supplement or make amendments to the
Shelf Registration Statement, as and when required by the rules, regulations or
instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or rules and regulations
thereunder for shelf registration, and the Company agrees to furnish to each
Electing Holder copies of any such supplement or amendment promptly following
its filing with the Commission, but only if such amendment or supplement is not
made available on the Commission's EDGAR System.

          (c)  In the event that (i) the Company has not filed the Exchange
Registration Statement or Shelf Registration Statement on or before the date on
which such registration statement is required to be filed pursuant to Section
2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or
Shelf Registration Statement has not become effective or been declared effective
by the Commission on or before the date on which such registration statement is
required to become or be declared effective pursuant to Section 2(a) or 2(b),
respectively, or (iii) the Exchange Offer has not been completed within 30
Business Days after the initial effective date of the Exchange Registration
Statement relating to the Exchange Offer (if the Exchange Offer is then required
to be made) or (iv) any Exchange Registration Statement or Shelf Registration
Statement required by Section 2(a) or 2(b) hereof is filed and declared
effective but shall thereafter either be withdrawn by the Company or shall
become subject to an effective stop order issued pursuant to Section 8(d) of the
Securities Act suspending the effectiveness of such registration statement
(except as specifically permitted herein) without being succeeded promptly by an
additional registration statement filed and declared effective (each such event
referred to in clauses (i) through (iv), a "Registration Default" and each
period during which a Registration Default has occurred and is continuing, a
"Registration Default Period"), then, as liquidated damages for such
Registration Default, subject to the provisions of Sections 3(d)(ii) and 8(b),
additional interest ("Additional Interest"), in addition to the Base Interest,
shall accrue at a per annum rate of 0.25% until all Registration Defaults have
been cured.

          (d)  The Company shall take all reasonable actions necessary or
advisable to be taken by it to ensure that the transactions contemplated herein
are effected as so contemplated.

          (e)  Any reference herein to a registration statement as of any time
shall be deemed to include any document incorporated, or deemed to be
incorporated, therein by reference as of such time and any reference herein to
any post-effective amendment to a registration statement as of any time shall be
deemed to include any

                                       7



document incorporated, or deemed to be incorporated, therein by reference as of
such time.

          (f)  During any 365-day period, the Company may suspend the use of the
prospectus forming part of the Shelf Registration Statement or, with respect to
the use in any resales by a holder of Exchange Securities that is a
broker-dealer, the Exchange Registration Statement, for up to four periods not
to exceed 45 consecutive days (other than the consecutive 45-day period
immediately prior to the stated maturity of the Securities) or an aggregate of
90 days in any 12-month period if the Board of Directors of the Company shall
have determined in good faith that because of valid business reasons (not
including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of businesses or assets, availability and preparation
of financial information relative to the Company, any subsidiary or any proposed
acquisition, pending corporate developments and similar events, it is in the
best interests of the Company to suspend such use, and prior to suspending such
use the Company provides the holders with written notice of such suspension,
which notice need not specify the nature of the event giving rise to such
suspension.

     3.   Registration Procedures.

     If the Company files a registration statement pursuant to Section 2(a) or
Section 2(b), the following provisions shall apply:

          (a)  At or before the Effective Time of the Exchange Offer or the
Shelf Registration, as the case may be, the Company shall qualify the Indenture
under the Trust Indenture Act.

          (b)  In the event that such qualification would require the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

          (c)  In connection with the Company's obligations with respect to the
registration of Exchange Securities as contemplated by Section 2(a) (the
"Exchange Registration"), if applicable, the Company shall, as soon as
practicable (or as otherwise specified):

               (i)  prepare and file with the Commission, as soon as practicable
                    but no later than 90 days after the Closing Date, an
                    Exchange Registration Statement on any form which may be
                    utilized by the Company and which shall permit the Exchange
                    Offer and resales of Exchange Securities by broker-dealers
                    during the Resale Period to be effected as contemplated by
                    Section 2(a), and use its reasonable best efforts to cause
                    such Exchange Registration Statement to become effective as
                    soon as practicable thereafter, but no later than 180 days
                    after the Closing Date;

                                       8



              (ii)   as soon as practicable prepare and file with the Commission
                     such amendments and supplements to such Exchange
                     Registration Statement and the prospectus included therein
                     as may be necessary to effect and maintain the
                     effectiveness of such Exchange Registration Statement for
                     the periods and purposes contemplated in Section 2(a)
                     hereof and as may be required by the applicable rules and
                     regulations of the Commission and the instructions
                     applicable to the form of such Exchange Registration
                     Statement, and promptly provide each broker-dealer holding
                     Exchange Securities with such number of copies of the
                     prospectus included therein (as then amended or
                     supplemented), as such broker-dealer reasonably may request
                     prior to the expiration of the Resale Period, for use in
                     connection with resales of Exchange Securities;

              (iii)  promptly give written notice to each broker-dealer that has
                     requested or received copies of the prospectus included in
                     such registration statement (A) when such Exchange
                     Registration Statement or the prospectus included therein
                     or any prospectus amendment or supplement or post-effective
                     amendment has been filed, and, with respect to such
                     Exchange Registration Statement or any post-effective
                     amendment, when the same has become effective, (B) of any
                     request by the Commission for amendments or supplements to
                     such Exchange Registration Statement or prospectus or for
                     additional information, (C) of the issuance by the
                     Commission of any stop order suspending the effectiveness
                     of such Exchange Registration Statement, (D) of the receipt
                     by the Company of any notification with respect to the
                     suspension of the qualification of the Exchange Securities
                     for sale in any jurisdiction, or (E) at any time during the
                     Resale Period when a prospectus is required to be delivered
                     under the Securities Act, that such Exchange Registration
                     Statement, prospectus, prospectus amendment or supplement
                     or post-effective amendment does not conform in all
                     material respects to the applicable requirements of the
                     Securities Act and the Trust Indenture Act and the rules
                     and regulations of the Commission thereunder or contains an
                     untrue statement of a material fact or omits to state any
                     material fact required to be stated therein or necessary to
                     make the statements therein, in light of the circumstances
                     in which they were made, not misleading; and promptly give
                     written notice to counsel of the Initial Purchasers (1) of
                     any comments by the Commission (and promptly provide copies
                     thereof) and by the blue sky or securities commissioner or
                     regulator of any

                                       9



                    state with respect thereto or any request by the Commission
                    for amendments or supplements to such Exchange Registration
                    Statement or prospectus or for additional information, (2)
                    of the issuance by the Commission of any stop order
                    suspending the effectiveness of such Exchange Registration
                    Statement or the initiation or threatening of any
                    proceedings for that purpose, (3) of the receipt by the
                    Company of any notification with respect to the suspension
                    of the qualification of the Exchange Securities for sale in
                    any jurisdiction or the initiation or threatening of any
                    proceeding for such purpose, or (4) at any time during the
                    Resale Period when a prospectus is required to be delivered
                    under the Securities Act, that such Exchange Registration
                    Statement, prospectus, prospectus amendment or supplement or
                    post-effective amendment does not conform in all material
                    respects to the applicable requirements of the Securities
                    Act and the Trust Indenture Act and the rules and
                    regulations of the Commission thereunder or contains an
                    untrue statement of a material fact or omits to state any
                    material fact required to be stated therein or necessary to
                    make the statements therein, in light of the circumstances
                    in which they were made, not misleading;

               (iv) in the event that the Company would be required, pursuant to
                    Section 3(c)(iii)(E) above, to notify any broker-dealers
                    holding Exchange Securities, subject to Section 2(f), as
                    soon as practicable prepare and furnish to each such holder
                    a reasonable number of copies of a prospectus supplemented
                    or amended so that, as thereafter delivered to purchasers of
                    such Exchange Securities during the Resale Period, such
                    prospectus shall conform in all material respects to the
                    applicable requirements of the Securities Act and the Trust
                    Indenture Act and the rules and regulations of the
                    Commission thereunder and shall not contain an untrue
                    statement of a material fact or omit to state a material
                    fact required to be stated therein or necessary to make the
                    statements therein, in light of the circumstances in which
                    they were made, not misleading;

               (v)  use its reasonable best efforts to obtain the withdrawal of
                    any order suspending the effectiveness of such Exchange
                    Registration Statement or any post-effective amendment
                    thereto at the earliest practicable date;

               (vi) use its reasonable best efforts to (A) register or qualify
                    the Exchange Securities under the securities laws or blue
                    sky laws of such jurisdictions as are contemplated by
                    Section

                                       10



                     2(a) no later than the commencement of the Exchange Offer,
                     (B) keep such registrations or qualifications in effect and
                     comply with such laws so as to permit the continuance of
                     offers, sales and dealings therein in such jurisdictions
                     until the expiration of the Resale Period and (C) cooperate
                     with the Initial Purchasers in endeavoring to qualify the
                     Securities for sale under the securities laws of such
                     jurisdictions as the Initial Purchasers may reasonably have
                     designated in writing and will make such applications, file
                     such documents and furnish such information as may be
                     reasonably required for that purpose; provided, however,
                     that the Company shall not be required for any such purpose
                     to (1) qualify as a foreign corporation in any jurisdiction
                     wherein it would not otherwise be required to qualify but
                     for the requirements of this Section 3(c)(vi), (2) consent
                     to general service of process in any such jurisdiction or
                     (3) make any changes to its certificate of incorporation or
                     by-laws or any agreement between it and its stockholders;

              (vii)  use its reasonable best efforts to obtain the consent or
                     approval of each governmental agency or authority, whether
                     federal, state or local, which may be required to effect
                     the Exchange Registration, the Exchange Offer and the
                     offering and sale of Exchange Securities by broker-dealers
                     during the Resale Period;

              (viii) provide a CUSIP number for all Exchange Securities, not
                     later than the applicable Effective Time; and

              (ix)   comply in all material respects with all applicable rules
                     and regulations of the Commission, and make generally
                     available to its securityholders an earning statement of
                     the Company and its subsidiaries complying with Section
                     11(a) of the Securities Act (including, at the option of
                     the Company, Rule 158 thereunder).

          (d)  In connection with the Company's obligations with respect to the
Shelf Registration, if applicable, the Company shall, as soon as practicable (or
as otherwise specified):

              (i)    prepare and file with the Commission, as soon as
                     practicable but in any case within the time periods
                     specified in Section 2(b), a Shelf Registration Statement
                     on any form which may be utilized by the Company and which
                     shall register all of the Registrable Securities for resale
                     by the holders thereof in accordance with such reasonable
                     method

                                       11



                     or methods of disposition as may be specified by such of
                     the holders as, from time to time, may be Electing Holders
                     and use its reasonable best efforts to cause such Shelf
                     Registration Statement to become effective as soon as
                     practicable but in any case within the time periods
                     specified in Section 2(b);

              (ii)   mail the Notice and Questionnaire to the holders of
                     Registrable Securities within a reasonable period of time
                     following the date on which the obligation to file a Shelf
                     Registration Statement arose; no holder shall be entitled
                     to be named as a selling securityholder in the Shelf
                     Registration Statement as of the Effective Time, and no
                     holder who was mailed a Notice and Questionnaire shall be
                     entitled to use the prospectus forming a part thereof for
                     resales of Registrable Securities at any time unless, and
                     no holder shall be entitled to Additional Interest until,
                     such holder has returned a completed and signed Notice and
                     Questionnaire to the Company by the deadline for response
                     set forth therein; provided, however, holders of
                     Registrable Securities shall have no less than 20 calendar
                     days from the date on which the Notice and Questionnaire is
                     first mailed to such holders to return a completed and
                     signed Notice and Questionnaire to the Company;

              (iii)  after the Effective Time of the Shelf Registration
                     Statement, upon the request of any holder of Registrable
                     Securities that is not then an Electing Holder, promptly
                     send a Notice and Questionnaire to such holder; provided
                     that the Company shall not be required to take any action
                     to name such holder as a selling securityholder in the
                     Shelf Registration Statement or to enable such holder to
                     use the prospectus forming a part thereof for resales of
                     Registrable Securities until such holder has returned a
                     completed and signed Notice and Questionnaire to the
                     Company;

              (iv)   as soon as practicable prepare and file with the Commission
                     such amendments and supplements to such Shelf Registration
                     Statement and the prospectus included therein as may be
                     necessary to effect and maintain the effectiveness of such
                     Shelf Registration Statement for the period specified in
                     Section 2(b) hereof and as may be required by the
                     applicable rules and regulations of the Commission and the
                     instructions applicable to the form of such Shelf
                     Registration Statement, and promptly furnish to the
                     Electing Holders copies of any such supplement or
                     amendment;

                                       12



              (v)    comply in all material respects with the provisions of the
                     Securities Act with respect to the disposition of all of
                     the Registrable Securities covered by such Shelf
                     Registration Statement in accordance with the reasonable
                     intended methods of disposition by the Electing Holders
                     provided for in such Shelf Registration Statement;

              (vi)   in the event of an Underwritten Offering, provide (A) the
                     Electing Holders, (B) the underwriters (which term, for
                     purposes of this Agreement, shall include a person deemed
                     to be an underwriter within the meaning of Section 2(a)(11)
                     of the Securities Act), if any, thereof, (C) any sales or
                     placement agent therefor, (D) counsel for any such
                     underwriter or agent and (E) not more than one counsel for
                     all the Electing Holders the opportunity to participate in
                     the preparation of such Shelf Registration Statement, each
                     prospectus included therein or filed with the Commission
                     and each amendment or supplement thereto;

              (vii)  in the event of an Underwritten Offering, for a reasonable
                     period prior to the commencement of such Underwritten
                     Offering, and throughout the period specified in Section
                     2(b), make available at reasonable times at the Company's
                     principal place of business or such other reasonable place
                     for inspection by the persons referred to in Section
                     3(d)(vi) who shall certify to the Company that they have a
                     current intention to sell the Registrable Securities
                     pursuant to the Shelf Registration such financial and other
                     information and books and records of the Company, and cause
                     the officers, employees, counsel and independent certified
                     public accountants of the Company to respond to such
                     inquiries, as shall be reasonably necessary, in the
                     judgment of the respective counsel referred to in such
                     Section, to conduct a reasonable investigation within the
                     meaning of Section 11 of the Securities Act; provided,
                     however, that each such party shall be required to maintain
                     in confidence and not to disclose to any other person any
                     information or records reasonably designated by the Company
                     as being confidential, until such time as (A) such
                     information becomes a matter of public record (whether by
                     virtue of its inclusion in such registration statement or
                     otherwise) (other than disclosure by any such person named
                     in Section 3(d)(vi)), (B) such person shall be required so
                     to disclose such information pursuant to a subpoena or
                     order of any court or other governmental agency or body
                     having jurisdiction over the matter (subject to the
                     requirements of such order, and only after such person
                     shall have given the

                                       13



                     Company prompt prior written notice of such requirement),
                     or (C) subject to Section 2(f), such information is
                     required to be set forth in such Shelf Registration
                     Statement or the prospectus included therein or in an
                     amendment to such Shelf Registration Statement or an
                     amendment or supplement to such prospectus in order that
                     such Shelf Registration Statement, prospectus, amendment or
                     supplement, as the case may be, complies in all material
                     respects with applicable requirements of the federal
                     securities laws and the rules and regulations of the
                     Commission and does not contain an untrue statement of a
                     material fact or omit to state therein a material fact
                     required to be stated therein or necessary to make the
                     statements therein, in light of the circumstances in which
                     they were made, not misleading;

              (viii) promptly notify each of the Electing Holders, and, in any
                     Underwritten Offering, any sales or placement agent
                     therefor and any underwriter thereof (which notification
                     may be made through any managing underwriter that is a
                     representative of such underwriter for such purpose) and
                     confirm such notice in writing upon request, (A) when such
                     Shelf Registration Statement or the prospectus included
                     therein or any prospectus amendment or supplement or
                     post-effective amendment has been filed, and, with respect
                     to such Shelf Registration Statement or any post-effective
                     amendment, when the same has become effective, (B) any
                     request by the Commission for amendments or supplements to
                     such Shelf Registration Statement or prospectus or for
                     additional information, (C) of the issuance by the
                     Commission of any stop order suspending the effectiveness
                     of such Shelf Registration Statement, (D) of the receipt by
                     the Company of any notification with respect to the
                     suspension of the qualification of the Registrable
                     Securities for sale in any jurisdiction, or (E) if at any
                     time when a prospectus is required to be delivered under
                     the Securities Act, that such Shelf Registration Statement,
                     prospectus, prospectus amendment or supplement or
                     post-effective amendment does not conform in all material
                     respects to the applicable requirements of the Securities
                     Act and the Trust Indenture Act and the rules and
                     regulations of the Commission thereunder or contains an
                     untrue statement of a material fact or omits to state any
                     material fact required to be stated therein or necessary to
                     make the statements therein, in light of the circumstances
                     in which they were made, not misleading; and promptly give
                     written notice to counsel of the Initial Purchasers (1) of
                     any comments by

                                       14



                    the Commission (and promptly provide copies thereof) and by
                    the blue sky or securities commissioner or regulator of any
                    state with respect thereto or any request by the Commission
                    for amendments or supplements to such Shelf Registration
                    Statement or prospectus or for additional information, (2)
                    of the issuance by the Commission of any stop order
                    suspending the effectiveness of such Shelf Registration
                    Statement or the initiation or threatening of any
                    proceedings for that purpose, (3) of the receipt by the
                    Company of any notification with respect to the suspension
                    of the qualification of the Registrable Securities for sale
                    in any jurisdiction or the initiation or threatening of any
                    proceeding for such purpose, or (4) if at any time when a
                    prospectus is required to be delivered under the Securities
                    Act, that such Shelf Registration Statement, prospectus,
                    prospectus amendment or supplement or post-effective
                    amendment does not conform in all material respects to the
                    applicable requirements of the Securities Act and the Trust
                    Indenture Act and the rules and regulations of the
                    Commission thereunder or contains an untrue statement of a
                    material fact or omits to state any material fact required
                    to be stated therein or necessary to make the statements
                    therein, in light of the circumstances in which they were
                    made, not misleading;

               (ix) use its reasonable best efforts to obtain the withdrawal of
                    any order suspending the effectiveness of such registration
                    statement or any post-effective amendment thereto at the
                    earliest practicable date;

               (x)  if requested by any managing underwriter or underwriters or
                    any placement or sales agent in an Underwritten Offering or
                    any Electing Holder, promptly incorporate in a prospectus
                    supplement or post-effective amendment such information as
                    is required by the applicable rules and regulations of the
                    Commission relating to the terms of the sale of such
                    Registrable Securities, including information with respect
                    to the principal amount of Registrable Securities being sold
                    by such Electing Holder or agent or to any underwriters, the
                    name and description of such Electing Holder, agent or
                    underwriter, the offering price of such Registrable
                    Securities and any discount, commission or other
                    compensation payable in respect thereof, the purchase price
                    being paid therefor by such underwriters and with respect to
                    any other material terms of the offering of the Registrable
                    Securities to be sold by such Electing Holder or agent or to
                    such underwriters; and make all

                                       15



                     required filings of such prospectus supplement or
                     post-effective amendment promptly after notification of the
                     matters to be incorporated in such prospectus supplement or
                     post-effective amendment;

              (xi)   furnish to each Electing Holder and, with respect to an
                     Underwritten Offering, each placement or sales agent, if
                     any, therefor, each underwriter, if any, thereof and the
                     respective counsel referred to in Section 3(d)(vi) a
                     conformed copy of such Shelf Registration Statement, each
                     such amendment and supplement thereto (in each case
                     including, if requested, all exhibits thereto and documents
                     incorporated by reference therein to the extent not
                     available on the Commission's EDGAR system) and the
                     prospectus included in such Shelf Registration Statement
                     (including each preliminary prospectus and any summary
                     prospectus) as such Electing Holder, agent, if any, and
                     underwriter, if any, may reasonably request in order to
                     facilitate the offering and disposition of the Registrable
                     Securities owned by such Electing Holder, and offered or
                     sold by such agent or underwritten by such underwriter in
                     such Underwritten Offering and to permit such Electing
                     Holder, agent and underwriter to satisfy the prospectus
                     delivery requirements of the Securities Act; and the
                     Company hereby consents to the use of such prospectus
                     (including such preliminary and summary prospectus) and any
                     amendment or supplement thereto by each such Electing
                     Holder and by any such agent and underwriter in such
                     Underwritten Offering, in each case in the form most
                     recently provided to such person by the Company, in
                     connection with the offering and sale of the Registrable
                     Securities covered by the prospectus (including such
                     preliminary and summary prospectus) or any supplement or
                     amendment thereto;

              (xii)  use reasonable best efforts to (A) register or qualify the
                     Registrable Securities to be included in such Shelf
                     Registration Statement under such securities laws or blue
                     sky laws of such jurisdictions as any Electing Holder and
                     each placement or sales agent, if any, therefor and
                     underwriter, if any, thereof shall reasonably request, (B)
                     keep such registrations or qualifications in effect and
                     comply with such laws so as to permit the continuance of
                     offers, sales and dealings therein in such jurisdictions
                     during the period the Shelf Registration is required to
                     remain effective under Section 2(b) above and for so long
                     as may be necessary to enable any such Electing Holder,

                                       16



                     agent or underwriter to complete its distribution of
                     Securities pursuant to such Shelf Registration Statement
                     and (C) take such reasonable actions as may be reasonably
                     necessary or advisable to enable each such Electing Holder,
                     agent, if any, and underwriter, if any, to consummate the
                     disposition in such jurisdictions of such Registrable
                     Securities; provided, however, that the Company shall not
                     be required for any such purpose to (1) qualify as a
                     foreign corporation in any jurisdiction wherein it would
                     not otherwise be required to qualify but for the
                     requirements of this Section 3(d)(xii), (2) consent to
                     general service of process in any such jurisdiction or (3)
                     make any changes to its certificate of incorporation or
                     by-laws or any agreement between it and its stockholders;

              (xiii) use its reasonable best efforts to obtain the consent or
                     approval of each governmental agency or authority, whether
                     federal, state or local, which may be required to effect
                     the Shelf Registration or the offering or sale in
                     connection therewith or to enable the selling holder or
                     holders to offer, or to consummate the disposition of,
                     their Registrable Securities;

              (xiv)  unless any Registrable Securities shall be in book-entry
                     form only, cooperate with the Electing Holders and the
                     managing underwriters of an Underwritten Offering to
                     facilitate the timely preparation and delivery of
                     certificates representing Registrable Securities to be
                     sold, which certificates, if so required by any securities
                     exchange upon which any Registrable Securities are listed,
                     shall be penned, lithographed or engraved, or produced by
                     any combination of such methods, on steel engraved borders,
                     and which certificates shall not bear any restrictive
                     legends; and, in the case of an underwritten offering,
                     enable such Registrable Securities to be in such
                     denominations and registered in such names as the managing
                     underwriters may request at least two business days prior
                     to any sale of the Registrable Securities;

              (xv)   provide a CUSIP number for all Registrable Securities, not
                     later than the applicable Effective Time;

              (xvi)  in the event of an Underwritten Offering, enter into one or
                     more underwriting agreements, engagement letters, agency
                     agreements or similar agreements, as appropriate, including
                     customary provisions relating to indemnification and
                     contribution, and take such other actions in connection

                                       17



                     therewith as any Electing Holders aggregating at least 50%
                     in aggregate principal amount of the Registrable Securities
                     included therein shall request in order to expedite or
                     facilitate the disposition of such Registrable Securities;

             (xvii)  in the event of an Underwritten Offering and as required by
                     an the agreement referred to in Section 3(d)(xvi) hereof,
                     (A) make such representations and warranties to the
                     Electing Holders and the underwriters thereof in form,
                     substance and scope as are customarily made in connection
                     with an offering of debt securities pursuant to any
                     appropriate underwriting agreement and a registration
                     statement filed on the form applicable to the Shelf
                     Registration; (B) obtain an opinion of counsel to the
                     Company in customary form for such an offering; (C) obtain
                     a "cold comfort" letter or letters from the independent
                     certified public accountants of the Company to be in
                     customary form and covering such matters of the type
                     customarily covered by letters of such type and (D) deliver
                     such documents and certificates, including officers'
                     certificates, as may be reasonably requested and as are
                     customary for such offerings;

             (xviii) notify in writing each holder of Registrable Securities of
                     any amendment or waiver of this Agreement effected pursuant
                     to Section 8(h) hereof, which notices shall contain the
                     text of the amendment or waiver effected or a description
                     thereof;

             (xix)   in the case of an Underwritten Offering, in the event that
                     any broker-dealer registered under the Exchange Act shall
                     underwrite any Registrable Securities or participate as a
                     member of an underwriting syndicate or selling group or
                     "assist in the distribution" (within the meaning of the
                     Conduct Rules (the "Conduct Rules) of the National
                     Association of Securities Dealers, Inc. ("NASD") or any
                     successor thereto, as amended from time to time) thereof,
                     assist such broker-dealer in complying with the
                     requirements of such Conduct Rules; and

             (xx)    comply, in all material respects, with all applicable rules
                     and regulations of the Commission, and make generally
                     available to its securityholders an earning statement of
                     the Company and its subsidiaries complying with Section
                     11(a) of the Securities Act (including, at the option of
                     the Company, Rule 158 thereunder).

                                       18



          (e)  In the event that the Company would be required, pursuant to
Section 3(d)(viii)(E) above, to notify the Electing Holders, the placement or
sales agent, if any, therefor and the managing underwriters, if any, thereof,
the Company shall promptly prepare and furnish to each of the Electing Holders,
to each placement or sales agent, if any, and to each such underwriter, if any,
entitled to such notification a reasonable number of copies of a prospectus
supplemented or amended so that, as thereafter delivered to purchasers of
Registrable Securities, such prospectus shall conform in all material respects
to the applicable requirements of the Securities Act and the Trust Indenture Act
and the rules and regulations of the Commission thereunder and shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances in which they were made, not misleading.

          (f)  Each holder agrees that upon receipt of any notice from the
Company pursuant to Sections 2(f), 3(c)(iii)(E) or 3(d)(viii)(E) hereof, such
holder shall forthwith discontinue the disposition of Registrable Securities or
Exchange Securities, as the case may be, pursuant to the registration applicable
to such Registrable Securities or Exchange Securities, as the case may be, until
such holder shall have received copies of such amended or supplemented
prospectus, and if so directed by the Company, such holder shall deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such holder's possession of the prospectus covering such Registrable
Securities or Exchange Securities, as the case may be, at the time of receipt of
such notice.

          (g)  In the event of a Shelf Registration, in addition to the
information required to be provided by each Electing Holder in its Notice
Questionnaire, the Company may require such Electing Holder to furnish to the
Company such additional information regarding such Electing Holder and such
Electing Holder's intended method of distribution of Registrable Securities as
may be required in order to comply with the Securities Act. Each such Electing
Holder agrees to notify the Company as promptly as practicable of any inaccuracy
or change in information previously furnished by such Electing Holder to the
Company or of the occurrence of any event in either case as a result of which
any prospectus relating to such Shelf Registration contains or would contain an
untrue statement of a material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
or omits to state any material fact regarding such Electing Holder or such
Electing Holder's intended method of disposition of such Registrable Securities
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading, and promptly
to furnish to the Company any additional information required to correct and
update any previously furnished information or required so that such prospectus
shall not contain, with respect to such Electing Holder or the disposition of
such Registrable Securities, an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then existing.

     4.   Registration Expenses.

                                       19



     The Company agrees to bear and to pay or cause to be paid promptly all
expenses incident to the Company's performance of or compliance with this
Agreement, including (a) all Commission and any NASD registration, filing and
review fees and expenses including reasonable fees and disbursements of counsel
for the placement or sales agent or underwriters in connection with such
registration, filing and review, (b) all reasonable fees and expenses in
connection with the qualification of the Securities for offering and sale under
the State securities and blue sky laws referred to in Section 3(d)(xii) hereof,
provided that the Company shall not be required to (1) qualify as a foreign
corporation, (2) to file a general consent to service of process in any
jurisdiction where it is not now so qualified or required to file such a consent
or (3) make any changes to its certificate of incorporation or by-laws or any
agreement between it and its stockholders, (c) all reasonable expenses relating
to the preparation, printing, production, distribution and reproduction of each
registration statement required to be filed hereunder, each prospectus included
therein or prepared for distribution pursuant hereto, each amendment or
supplement to the foregoing, the reasonable expenses of preparing the Securities
for delivery and the expenses of printing or producing any underwriting
agreements, agreements among underwriters, selling agreements and all other
documents in connection with the offering, sale or delivery of Securities to be
disposed of (including certificates representing the Securities), (d) reasonable
fees and expenses of the Trustee under the Indenture, any agent of the Trustee
and any counsel for the Trustee and of any collateral agent or custodian, (e)
internal expenses (including all salaries and expenses of the Company's officers
and employees performing legal or accounting duties), (f) reasonable fees,
disbursements and expenses of counsel and independent certified public
accountants of the Company (including the expenses of any opinions or "cold
comfort" letters required by or incident to such performance and compliance),
(g) reasonable fees, disbursements and expenses of any "qualified independent
underwriter" engaged pursuant to Section 3(d)(xix) hereof, (i) reasonable fees,
disbursements and expenses of one counsel for the Electing Holders retained in
connection with a Shelf Registration, as selected by the Electing Holders of at
least a majority in aggregate principal amount of the Registrable Securities
held by Electing Holders (which counsel shall be reasonably satisfactory to the
Company), (j) any fees charged by securities rating services for rating the
Securities, and (k) reasonable fees, expenses and disbursements of any other
persons, including special experts, retained by the Company in connection with
such registration (collectively, the "Registration Expenses"). Notwithstanding
the foregoing, the holders of the Registrable Securities being registered shall
pay all agency fees and commissions and underwriting discounts and commissions
attributable to the sale of such Registrable Securities and the fees and
disbursements of any counsel or other advisors or experts retained by such
holders (severally or jointly), other than the counsel and experts specifically
referred to above.

     5.   Indemnification.

          (a)  Indemnification by the Company. The Company will indemnify and
hold harmless each of the holders of Registrable Securities included in an
Exchange Registration Statement, each of the Electing Holders of Registrable
Securities included in a Shelf Registration Statement and each person who
participates as a placement or sales agent or as an underwriter in any offering
or sale of such Registrable Securities against

                                       20



any Losses, joint or several, to which such holder, agent or underwriter may
become subject under the Securities Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Exchange
Registration Statement or Shelf Registration Statement, as the case may be,
under which such Registrable Securities were registered under the Securities
Act, or any preliminary, final or summary prospectus contained therein or
furnished by the Company to any such holder, Electing Holder, agent or
underwriter, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein (with
respect to a prospectus, in light of the circumstances under which they were
made) not misleading, and will reimburse such holder, such Electing Holder, such
agent and such underwriter for any legal or other expenses reasonably incurred
by them in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable to any such person in any such case to the extent that any such Loss
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, or
preliminary, final or summary prospectus, or amendment or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by such person expressly for use therein.

          (b)  Indemnification by the Holders and any Agents and Underwriters.
The Company may require, as a condition to including any Registrable Securities
in any registration statement filed pursuant to Section 2(b) hereof and to
entering into any underwriting agreement with respect thereto, that the Company
shall have received an undertaking reasonably satisfactory to it from the
Electing Holder of such Registrable Securities and from each underwriter named
in any such underwriting agreement or placement or sales agent, severally and
not jointly, to (i) indemnify and hold harmless the Company, and all other
holders of Registrable Securities, against any Losses to which the Company or
such other holders of Registrable Securities may become subject, under the
Securities Act or otherwise, insofar as such Losses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in such registration statement, or any
preliminary, final or summary prospectus contained therein or furnished by the
Company to any such Electing Holder, agent or underwriter, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (with respect to a prospectus, in light
of the circumstances under which they were made) not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Electing
Holder, underwriter or agent expressly for use therein, and (ii) reimburse the
Company for any legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that no such Electing Holder shall be
required to undertake liability to any person under this Section 5(b) for any
amounts in excess of the dollar amount of the proceeds to be received by such
Electing Holder from the sale of such Electing Holder's Registrable Securities
pursuant to such registration.

                                       21



          (c)  Notices of Claims, Etc. Promptly after receipt by an indemnified
party under subsection (a) or (b) above of written notice of the commencement of
any action, such indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party pursuant to the indemnification provisions of
or contemplated by this Section 5, notify such indemnifying party in writing of
the commencement of such action. No indemnification provided for in Section 5(a)
or 5(b) shall be available to any party who shall fail to give notice as
provided in this Section 5(c) if the party to whom notice was not given was
unaware of the proceeding to which such notice would have related and was
materially prejudiced by the failure to give such notice, but the failure to
give such notice shall not relieve the indemnifying party or parties from any
liability which it or they may have to the indemnified party for contribution or
otherwise than on account of the provisions of Section 5(a) or 5(b). In case any
such action shall be brought against any indemnified party and it shall notify
an indemnifying party of the commencement thereof, such indemnifying party shall
be entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party
(who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. Neither party shall, without the written
consent of the other party, effect the settlement or compromise of, or consent
to the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the other party from all liability arising
out of such action or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of the other
party.

          (d)  Contribution. If for any reason the indemnification provisions
contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient
to hold harmless an indemnified party in respect of any Losses (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party and the
indemnified party in connection with the statements or omissions which resulted
in such Losses (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this Section 5(d) were determined by
pro rata allocation (even if the holders or any agents or underwriters or all

                                       22



of them were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 5(d). The amount paid or payable by an indemnified party as a
result of the Losses (or actions in respect thereof) referred to above shall be
deemed to include any legal or other fees or expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 5(d), no holder
shall be required to contribute any amount in excess of the amount by which the
dollar amount of the proceeds received by such holder from the sale of any
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) exceeds the amount of any damages which such holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission, and no underwriter shall be required
to contribute any amount in excess of the amount by which the total price at
which the Registrable Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The holders' and any underwriters'
obligations in this Section 5(d) to contribute shall be several in proportion to
the principal amount of Registrable Securities registered or underwritten, as
the case may be, by them and not joint.

          (e)  The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director and partner of
each holder, agent and underwriter and each person, if any, who controls any
holder, agent or underwriter within the meaning of the Securities Act; and the
obligations of the holders and any agents or underwriters contemplated by this
Section 5 shall be in addition to any liability which the respective holder,
agent or underwriter may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company (including any
person who, with his consent, is named in any registration statement as about to
become a director of the Company) and to each person, if any, who controls the
Company within the meaning of the Securities Act.

     6.   Underwritten Offerings.

          (a)  Selection of Underwriters. If any of the Registrable Securities
covered by the Shelf Registration are to be sold pursuant to an Underwritten
Offering, the managing underwriter or underwriters thereof shall be designated
by Electing Holders holding at least a majority in aggregate principal amount of
the Registrable Securities to be included in such offering, provided that such
designated managing underwriter or underwriters is or are reasonably acceptable
to the Company.

          (b)  Participation by Holders. Each holder of Registrable Securities
hereby agrees with each other such holder that no such holder may participate in
any Underwritten Offering hereunder unless such holder (i) agrees to sell such
holder's Registrable Securities on the basis provided in any underwriting
arrangements approved

                                       23



by the persons entitled hereunder to approve such arrangements and (ii)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements.

     7.   Rule 144.

     The Company covenants to the holders of Registrable Securities that to the
extent it shall be required to do so under the Exchange Act, the Company shall
timely file the reports required to be filed by it under the Exchange Act or the
Securities Act (including the reports under Section 13 and 15(d) of the Exchange
Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission
under the Securities Act) and the rules and regulations adopted by the
Commission thereunder, and shall take such further action as any holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such holder to sell Registrable Securities without
registration under the Securities Act within the limitations of the exemption
provided by Rule 144 under the Securities Act, as such Rule may be amended from
time to time, or any similar or successor rule or regulation hereafter adopted
by the Commission. Upon the request of any holder of Registrable Securities in
connection with that holder's sale pursuant to Rule 144, the Company shall
deliver to such holder a written statement as to whether it has complied with
such requirements. Notwithstanding the foregoing, nothing in this Section 7
shall be deemed to require the Company to register any of its securities
pursuant to the Exchange Act.

     8.   Miscellaneous.

          (a)  No Inconsistent Agreements. The Company represents, warrants,
covenants and agrees that it has not granted, and shall not grant, registration
rights with respect to Registrable Securities or any other securities which
would be inconsistent with the terms contained in this Agreement.

          (b)  Specific Performance. The parties hereto acknowledge that there
would be no adequate remedy at law if the Company fails to perform any of its
obligations hereunder and that the Initial Purchasers and the holders from time
to time of the Registrable Securities may be irreparably harmed by any such
failure, and accordingly agree that the Initial Purchasers and such holders, in
addition to any other remedy to which they may be entitled at law or in equity,
shall be entitled to compel specific performance of the obligations of the
Company under this Agreement in accordance with the terms and conditions of this
Agreement, in any court of the United States or any State thereof having
jurisdiction.

          (c)  Notices. All notices, requests, claims, demands, waivers and
other communications hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand, if delivered personally or by courier,
or three days after being deposited in the mail (registered or certified mail,
postage prepaid, return receipt requested) as follows: If to the Company, to it
at 3240 Hillview Avenue, Palo Alto, CA 94304, and if to a holder, to the address
of such holder set forth in the security register or

                                       24



other records of the Company, or to such other address as the Company or any
such holder may have furnished to the other in writing in accordance herewith,
except that notices of change of address shall be effective only upon receipt.

          (d)  Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and the holders from time to time of the
Registrable Securities and the respective successors and assigns of the parties
hereto and such holders. In the event that any transferee of any holder of
Registrable Securities shall acquire Registrable Securities, in any manner,
whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be deemed a
beneficiary hereof for all purposes and such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such Registrable Securities such transferee shall be entitled to receive the
benefits of, and be conclusively deemed to have agreed to be bound by all of the
applicable terms and provisions of this Agreement. If the Company shall so
request, any such successor, assign or transferee shall agree in writing to
acquire and hold the Registrable Securities subject to all of the applicable
terms hereof.

          (e)  Survival. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any holder of Registrable Securities, any director, officer or partner of such
holder, any agent or underwriter or any director, officer or partner thereof, or
any controlling person of any of the foregoing, and shall survive delivery of
and payment for the Registrable Securities pursuant to the Purchase Agreement
and the transfer and registration of Registrable Securities by such holder and
the consummation of an Exchange Offer.

          (f)  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          (g)  Headings. The descriptive headings of the several Sections and
paragraphs of this Agreement are inserted for convenience only, do not
constitute a part of this Agreement and shall not affect in any way the meaning
or interpretation of this Agreement.

          (h)  Entire Agreement; Amendments. This Agreement and the other
writings referred to herein (including the Indenture and the form of Securities)
or delivered pursuant hereto which form a part hereof contain the entire
understanding of the parties with respect to its subject matter. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to its subject matter. This Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only by a written instrument
duly executed by the Company and the holders of at least a majority in aggregate
principal amount of the Registrable Securities

                                       25



at the time outstanding. Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any amendment or waiver effected
pursuant to this Section 8(h), whether or not any notice, writing or marking
indicating such amendment or waiver appears on such Registrable Securities or is
delivered to such holder.

          (i)  Inspection. For so long as this Agreement shall be in effect,
upon written request to the Company, a copy of this Agreement and a complete
list of the names and addresses of all the holders of Registrable Securities
shall be mailed to any holder of Registrable Securities for proper purposes only
(which shall include any purpose related to the rights of the holders of
Registrable Securities under the Securities, the Indenture and this Agreement).

          (j)  Counterparts. This agreement may be executed by the parties in
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.

                                       26



     If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Initial Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Initial Purchasers the
Company. It is understood that your acceptance of this letter on behalf of each
of the Initial Purchasers is pursuant to the authority set forth in a form of
agreement among the Initial Purchasers, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.

                                        Very truly yours,

                                        CNF INC.

                                        By: ____________________________
                                            Name: Mark C. Thickpenny
                                            Title: Vice President and Treasurer

Accepted as of the date hereof:

CITIGROUP GLOBAL MARKETS INC.
MORGAN STANLEY & CO. INCORPORATED,
on behalf of themselves and as representatives
of the Initial Purchasers

BY: CITIGROUP GLOBAL MARKETS INC.

By:_______________________________
Name: Stephen H. Woo
Title: Vice President

                                       27



                                                                       EXHIBIT A

                                    CNF INC.

                         INSTRUCTION TO DTC PARTICIPANTS

                                (Date of Mailing)

                     URGENT - IMMEDIATE ATTENTION REQUESTED

                         DEADLINE FOR RESPONSE: [DATE]*

The Depository Trust Company ("DTC") has identified you as a DTC Participant
through which beneficial interests in the CNF Inc. (the "Company") 6.70% Senior
Debentures due 2034 (the "Securities") are held. The Company is in the process
of registering the Securities under the Securities Act of 1933 for resale by the
beneficial owners thereof. In order to have their Securities included in the
registration statement, beneficial owners must complete and return the enclosed
Notice of Registration Statement and Selling Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the
enclosed materials as soon as possible as their rights to have the Securities
included in the registration statement depend upon their returning the Notice
and Questionnaire by [DEADLINE FOR RESPONSE]. Please forward a copy of the
enclosed documents to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions pertaining to this matter, please contact CNF Inc., 3240
Hillview Avenue, Palo Alto, California 94304, (650) [494-2900].

- ----------
*Not less than 20 calendar days from date of mailing.

                                      A-1



                                    CNF INC.

                        Notice of Registration Statement
                                       and
                      Selling Securityholder Questionnaire

                                     (Date)

Reference is hereby made to the Exchange and Registration Rights Agreement (the
"Registration Rights Agreement") between CNF Inc. (the "Company") and the
Initial Purchasers named therein. Pursuant to the Registration Rights Agreement,
the Company has filed with the United States Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the "Shelf Registration
Statement") for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the "Securities Act"), of the Company's 6.70% Senior
Debentures due 2034 (the "Securities"). A copy of the Registration Rights
Agreement is attached hereto. All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.

Each beneficial owner of Registrable Securities (as defined below) is entitled
to have the Registrable Securities beneficially owned by it included in the
Shelf Registration Statement. In order to have Registrable Securities included
in the Shelf Registration Statement, this Notice of Registration Statement and
Selling Securityholder Questionnaire ("Notice and Questionnaire") must be
completed, executed and delivered to the Company's counsel at the address set
forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners
of Registrable Securities who do not complete, execute and return this Notice
and Questionnaire by such date (i) will not be named as selling securityholders
in the Shelf Registration Statement and (ii) may not use the prospectus forming
a part thereof for resales of Registrable Securities.

Certain legal consequences arise from being named as a selling securityholder in
the Shelf Registration Statement and related Prospectus. Accordingly, holders
and beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Shelf Registration Statement and
related Prospectus.

The term "Registrable Securities" is defined in the Registration Rights
Agreement.

                                      A-2



                                    ELECTION

The undersigned holder (the "Selling Securityholder") of Registrable Securities
hereby elects to include in the Shelf Registration Statement the Registrable
Securities beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and Questionnaire, agrees to
be bound with respect to such Registrable Securities by the terms and conditions
of this Notice and Questionnaire and the Registration Rights Agreement,
including, without limitation, Section 5 of the Agreement, as if the undersigned
Selling Securityholder were an original party thereto.

Upon any sale of Registrable Securities pursuant to the Shelf Registration
Statement, the Selling Securityholder will be required to deliver to the Company
and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and
as Exhibit B to the Registration Rights Agreement.

The Selling Securityholder hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:

                                       A-3



                                  QUESTIONNAIRE

     (1)  (a)  Full Legal Name of Selling Securityholder:
               ________________________________________________________

          (b)  Full Legal Name of Registered Holder (if not the same as in
               (a) above) of Registrable Securities Listed in Item (3) below:
               ________________________________________________________

          (c)  Full Legal Name of DTC Participant (if applicable and if not the
               same as (b) above) Through Which Registrable Securities Listed in
               Item (3) below are Held:
               ________________________________________________________

     (2)  Address for Notices to Selling Securityholder:

                                ________________________________________________
                                ________________________________________________
                                ________________________________________________

          Telephone:            ________________________________________________

          Fax:                  ________________________________________________

          Contact Person:       ________________________________________________

     (3)  Beneficial Ownership of Securities:

          Except as set forth below in this Item (3), the undersigned
          does not beneficially own any Securities.

          (a)  Principal amount of Registrable Securities beneficially owned:

               _________________________________________________________________

               CUSIP No(s). of such Registrable Securities: ____________________

          (b)  Principal amount of Securities other than Registrable Securities
               beneficially owned:
               _________________________________________________________________
               CUSIP No(s). of such other Securities: __________________________

          (c)  Principal amount of Registrable Securities which the undersigned
               wishes to be included in the Shelf Registration Statement:
               _________________________________________________________________
               CUSIP No(s). of such Registrable Securities to be included in the
               Shelf Registration Statement:____________________________________

                                      A-4



     (4)  Beneficial Ownership of Other Securities of the Company:

          Except as set forth below in this Item (4), the undersigned Selling
          Securityholder is not the beneficial or registered owner of any other
          securities of the Company, other than the Securities listed above in
          Item (3).

          State any exceptions here:

     (5)  Relationships with the Company:

          Except as set forth below, neither the Selling Securityholder nor any
          of its affiliates, officers, directors or principal equity holders (5%
          or more) has held any position or office or has had any other material
          relationship with the Company (or its predecessors or affiliates)
          during the past three years.

          State any exceptions here:

     (6)  Plan of Distribution:

          Except as set forth below, the undersigned Selling Securityholder
          intends to distribute the Registrable Securities listed above in Item
          (3) only as follows (if at all): Such Registrable Securities may be
          sold from time to time directly by the undersigned Selling
          Securityholder or, alternatively, through underwriters, broker-dealers
          or agents. Such Registrable Securities may be sold in one or more
          transactions at fixed prices, at prevailing market prices at the time
          of sale, at varying prices determined at the time of sale, or at
          negotiated prices. Such sales may be effected in transactions (which
          may involve crosses or block transactions) (i) on any national
          securities exchange or quotation service on which the Registered
          Securities may be listed or quoted at the time of sale, (ii) in the
          over-the-counter market, (iii) in transactions otherwise than on such
          exchanges or services or in the over-the-counter market, or (iv)
          through the writing of options. In connection with sales of the
          Registrable Securities or otherwise, the Selling Securityholder may
          enter into hedging transactions with broker-dealers, which may in turn
          engage in short sales of the Registrable Securities in the course of
          hedging the positions they assume. The Selling Securityholder may also
          sell Registrable Securities short and deliver Registrable Securities
          to close out such short positions, or loan or pledge Registrable
          Securities to broker-dealers that in turn may sell such securities.

          State any exceptions here:

                                       A-5



          By signing below, the Selling Securityholder acknowledges that it
          understands its obligation to comply, and agrees that it will comply,
          with the provisions of the Exchange Act and the rules and regulations
          thereunder, particularly Regulation M.

          In the event that the Selling Securityholder transfers all or any
          portion of the Registrable Securities listed in Item (3) above after
          the date on which such information is provided to the Company, the
          Selling Securityholder agrees to notify the transferee(s) at the time
          of the transfer of its rights and obligations under this Notice and
          Questionnaire and the Agreement.

          By signing below, the Selling Securityholder consents to the
          disclosure of the information contained herein in its answers to Items
          (1) through (6) above and the inclusion of such information in the
          Shelf Registration Statement and related Prospectus. The Selling
          Securityholder understands that such information will be relied upon
          by the Company in connection with the preparation of the Shelf
          Registration Statement and related Prospectus.

          In accordance with the Selling Securityholder's obligation under
          Section 3(d) of the Agreement to provide such information as may be
          required by law for inclusion in the Shelf Registration Statement, the
          Selling Securityholder agrees to promptly notify the Company of any
          inaccuracies or changes in the information provided herein which may
          occur subsequent to the date hereof at any time while the Shelf
          Registration Statement remains in effect. All notices hereunder and
          pursuant to the Agreement shall be made in writing, by hand-delivery,
          first-class mail, or air courier guaranteeing overnight delivery as
          follows:

               (i)  To the Company:

                                       Eberhard G. H. Schmoller,
                                       Senior Vice President and General Counsel
                                       CNF Inc.
                                       3240 Hillview Avenue
                                       Palo Alto, California 94304

               (ii) With a copy to:

                                       Gregg A. Noel
                                       Skadden, Arps, Slate, Meagher & Flom LLP
                                       300 South Grand Avenue, Suite 3400
                                       Los Angeles, California 90071

Once this Notice and Questionnaire is executed by the Selling Securityholder and
received by the Company's counsel, the terms of this Notice and Questionnaire,
and the representations and warranties contained herein, shall be binding on,
shall inure to the benefit of and shall be enforceable by the respective
successors, heirs, personal representatives, and assigns of the Company and the
Selling Securityholder (with respect

                                       A-6



to the Registrable Securities beneficially owned by such Selling Securityholder
and listed in Item (3) above. This Agreement shall be governed in all respects
by the laws of the State of New York.

                                       A-7



IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.

Dated:_______________

      _______________________________________________________________________
      Selling Securityholder
      (Print/type full legal name of beneficial owner of Registrable Securities)

      By:______________________________________________________
      Name:
      Title:

PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON
OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

                                Gregg A. Noel
                                Skadden, Arps, Slate, Meagher & Flom LLP
                                300 South Grand Avenue, Suite 3400
                                Los Angeles, California 90071

                                       A-8



                                                                       EXHIBIT B

              NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

[_________________]
CNF Inc.
c/o [_______________]
[Address of [__________]]

Attention: Trust Officer

         Re: CNF Inc. (the "Company")
               % Senior Debentures due

Dear Ladies and Gentlemen:

Please be advised that ________________ has transferred $____________ aggregate
principal amount of the above-referenced Debentures pursuant to an effective
Registration Statement on Form [______] (File No. 333-_________) filed by the
Company.

We hereby certify that the prospectus delivery requirements, if any, of the
Securities Act of 1933, as amended, have been satisfied and that the above-named
beneficial owner of the Debentures is named as a "Selling Holder" in the
Prospectus dated ___________ or in supplements thereto, and that the aggregate
principal amount of the Debentures transferred are the Debentures listed in such
Prospectus opposite such owner's name.

Dated:

                                        Very truly yours,

                                        ________________________________________
                                        (Name)

                                        By:_____________________________________
                                        (Authorized Signature)

EX-5

                                                                       EXHIBIT 5

            [LETTERHEAD OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP]

                                  June 4, 2004

CNF Inc.
3240 Hillview Avenue
Palo Alto, California  94304

               Re:     CNF Inc.
                       Registration Statement on Form S-4

Ladies and Gentlemen:

         We have acted as special counsel to CNF Inc., a Delaware corporation
(the "Company"), in connection with the public offering of $300,000,000
aggregate principal amount of the Company's 6.70% Senior Debentures due 2034
(the "Exchange Debentures"). The Exchange Debentures will be exchanged (the
"Exchange Offer") for a like principal amount of the issued and outstanding
6.70% Senior Debentures due 2034 of the Company (the "Original Debentures")
under an Indenture, dated as of March 8, 2000 (as amended by the Supplemental
Indenture No. 1 dated as of April 30, 2004, the "Indenture"), by and between the
Company and The Bank of New York (as successor to Bank One Trust Company,
National Association), as Trustee (the "Trustee"), as contemplated by the
Exchange and Registration Rights Agreement, dated as of April 30, 2004 (the
"Registration Rights Agreement"), by and among the Company, Citigroup Global
Markets Inc. and Morgan Stanley & Co. Incorporated, as representative of the
initial purchasers named therein.

         This opinion is being furnished in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended
(the "Securities Act").

         In rendering the opinion set forth herein, we have examined and relied
on originals or copies of the following:

         (a)      the registration statement on Form S-4 of the Company relating
to the Exchange Debentures to be filed today with the Securities and Exchange
Commission (the "Commission") under the Securities Act (the "Registration
Statement");

         (b)      an executed copy of the Registration Rights Agreement;



CNF Inc.
June 4, 2004
Page 2

         (c)      an executed copy of the Indenture; and

         (d)      the form of the Exchange Debentures.

         We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the Company and such
agreements, certificates and receipts of public officials, certificates of
officers or other representatives of the Company and others, and such other
documents as we have deemed necessary or appropriate as a basis for the opinion
set forth below.

         In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as facsimile, electronic, certified or photostatic
copies, and the authenticity of the originals of such copies. In making our
examination of documents executed or to be executed, we have assumed that the
parties thereto had or will have the power, corporate or other, to enter into
and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and the execution and
delivery by such parties of such documents and, except to the extent expressly
set forth in our opinion below, the validity and binding effect thereof on such
parties. To the extent our opinion set forth below relates to the enforceability
of the choice of New York law and choice of New York forum provisions of the
Exchange Debentures, our opinion is rendered in reliance upon N.Y. Gen. Oblig.
Law Sections 5-1401, 5-1402 (McKinney 2001) and N.Y. C.P.L.R. 327(b) (McKinney
2001) and is subject to the qualification that such enforceability may be
limited by public policy considerations of any jurisdiction, other than the
courts of the State of New York, in which enforcement of such provisions, or of
a judgment upon an agreement containing such provisions, is sought. We have also
assumed that the Company has complied with all aspects of applicable laws of
jurisdictions other than the State of New York in connection with the
transactions contemplated by the Indenture and the Registration Rights
Agreement. We have assumed that the execution and delivery by the Company of the
Indenture and the Exchange Debentures and the performance by the Company of its
obligations thereunder do not and will not violate, conflict with or constitute
a default under any agreement or instrument to which the Company or its
properties is subject, except for those agreements and instruments which have
been identified to us by the Company as being material to it and which are
listed as exhibits to the Registration Statement. As to any facts material to
the opinions expressed herein that we did not independently establish or verify,
we have relied upon statements and representations of officers and other
representatives of the Company and others and of public officials.

         Our opinion set forth herein is limited to the laws of the State of New
York that, in our experience, are applicable to securities of the type covered
by the Registration Statement and, to the extent that judicial or regulatory
orders or decrees or consents, approval, licenses, authorizations, validations,
filings, recordings or registrations with governmental authorities are relevant,
to those required under such laws (all of the foregoing being referred to as
"Opined on Law"). We do not express any opinion with respect to the law of any
jurisdiction other than Opined on Law or as to the effect of any such
non-opined-on law on the opinion herein stated.



CNF Inc.
June 4, 2004
Page 3

         Based upon and subject to the foregoing and the limitations,
qualifications, exceptions and assumptions set forth herein, we are of the
opinion that when the Exchange Debentures (in the form examined by us) have been
duly executed and authenticated in accordance with the terms of the Indenture
and have been delivered upon consummation of the Exchange Offer against receipt
of Original Debentures surrendered in exchange therefor in accordance with the
terms of the Registration Rights Agreement and the Exchange Offer, the Exchange
Debentures will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).

         We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement. We also consent to the reference to
our firm under the caption "Legal Matters" in the Registration Statement. In
giving this consent, we do not thereby admit that we are included in the
category of persons whose consent is required under Section 7 of the Securities
Act or the rules and regulations of the Commission promulgated thereunder. This
opinion is expressed as of the date hereof unless otherwise expressly stated,
and we disclaim any undertaking to advise you of any subsequent changes in the
facts stated or assumed herein or of any subsequent changes in applicable law.

                                Very truly yours,



                                /s/ SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP

EX-12.A

                                                                               .
                                                                               .
                                                                               .

                                                                   EXHIBIT 12(a)

                                    CNF INC.
           COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO FIXED CHARGES



                                                          THREE MONTHS
                                                          ENDED MARCH 31,                  YEAR ENDED DECEMBER 31,
                                                          ---------------  ---------------------------------------------------------
(DOLLARS IN THOUSANDS)                                    2004     2003      2003       2002        2001         2000        1999
- ----------------------                                   ------   -------  --------   ---------   ---------   ---------   ----------
                                                                                                     
Fixed Charges:
  Interest expense                                       $ 9,040  $ 9,272  $ 30,071   $  23,558   $  27,992   $  29,972   $  25,972
  Capitalized interest                                        --       46       241         455         864       4,636       5,864
  Amortization of debt expense                               334      331     1,354       1,321       1,064       1,044         908
  Dividend requirement on Series B Preferred Stock (1)     2,469    2,534    10,072      10,331      10,606      10,808      10,992
Interest component of rental expense (2)                   6,486    7,383    17,138      19,564      25,033      38,161      41,363
                                                         -------  -------  --------   ---------   ---------   ---------   ---------
Fixed Charges                                            $18,329  $19,566  $ 58,876   $  55,229   $  65,559   $  84,621   $  85,099
                                                         =======  =======  ========   =========   =========   =========   =========
Earnings (Loss):
  Income (Loss) from continuing operations before taxes
    (3)                                                  $43,326  $29,435  $156,016   $ 146,244   $(695,933)  $ 261,196   $ 332,260
  (Income) Loss from equity-method investment             (2,392)  (2,976)  (20,718)    (18,188)      9,415         560          --
                                                         -------  -------- --------   ---------   ---------   ---------   ---------
                                                          40,934   26,459   135,298     128,056    (686,518)    261,756     332,260
  Fixed charges                                           18,329   19,566    58,876      55,229      65,559      84,621      85,099
    Capitalized interest                                      --      (46)     (241)       (455)       (864)     (4,636)     (5,864)
    Preferred dividend requirements (4)                   (2,469)  (2,534)  (10,072)    (10,331)    (10,606)    (10,808)    (10,992)
                                                         -------  -------  --------   ---------   ---------   ---------   ---------
                                                         $56,794  $43,445  $183,861   $ 172,499   $(632,429)  $ 330,933   $ 400,503
                                                         =======  =======  ========   =========   =========   =========   =========
  Ratio                                                     3.1x     2.2x      3.1x        3.1x       (9.6)x        3.9x        4.7x
Deficiency in the coverage of fixed charges by earnings
  (loss) before fixed charges                                 --        --       --          --    (697,988)         --          --
                                                         =======  ======== ========   =========   =========   =========   =========


- -----------------------------
(1)   Dividends on shares of the Series B cumulative convertible preferred stock
      are used to pay debt service on notes issued by the CNF's Thrift and Stock
      Plan.

(2)   Estimate of the interest portion of lease payments.

(3)   For the year ended December 31, 2001, results included a $652.2 million
      loss from restructuring charges at Forwarding and Menlo Worldwide
      Logistics' $47.5 million loss from the business failure of a customer.

(4)   Preferred stock dividend requirements included in Fixed Charges but not
      deducted in the determination of Income (Loss) from Continuing Operations
      Before Income Taxes.

EX-12.B

                                                                   EXHIBIT 12(b)

                                    CNF INC.
              COMPUTATION OF RATIOS OF EARNINGS (LOSS) TO COMBINED
                   FIXED CHARGES AND PREFERRED STOCK DIVIDENDS



                                                          THREE MONTHS
                                                          ENDED MARCH 31,                  YEAR ENDED DECEMBER 31,
                                                         ----------------  ---------------------------------------------------------
(DOLLARS IN THOUSANDS)                                     2004    2003      2003       2002        2001         2000        1999
- ----------------------                                   -------  -------  --------   ---------   ---------   ---------   ----------
                                                                                                     
Combined Fixed Charges and Preferred Stock Dividends:
    Interest expense                                     $ 9,040  $ 9,272  $ 30,071   $ 23,558    $  27,992   $  29,972   $ 25,972
    Capitalized interest                                      --       46       241        455          864       4,636      5,864
    Amortization of debt expense                             334      331     1,354      1,321        1,064       1,044        908
    Dividend requirement on Series B Preferred
      Stock (1)                                            2,469    2,534    10,072     10,331       10,606      10,808     10,992
    Dividend requirement on preferred securities of
      subsidiary trust                                        --       --     6,250      6,250        6,250       6,250      6,250
  Interest component of rental expense (2)                 6,486    7,383    17,138     19,564       25,033      38,161     41,363
                                                         -------  -------  --------   --------    ---------   ---------   --------
Fixed Charges                                            $18,329  $19,566  $ 65,126   $ 61,479    $  71,809   $  90,871   $ 91,349
                                                         =======  =======  ========   ========    =========   =========   ========
Earnings (Loss):
  Income (Loss) from continuing operations before taxes
    (3)                                                  $43,326  $29,435  $156,016   $146,244    $(695,933)  $ 261,196   $332,260
  (Income) Loss from equity-method investment             (2,392)  (2,976)  (20,718)   (18,188)       9,415         560         --
                                                         -------  -------  --------   ---------   ---------   ---------   --------
                                                          40,934   26,459   135,298    128,056     (686,518)    261,756    332,260
  Fixed charges                                           18,329   19,566    65,126     61,479       71,809      90,871     91,349
    Capitalized interest                                      --      (46)     (241)      (455)        (864)     (4,636)    (5,864)
    Preferred dividend requirements (4)                   (2,469)  (2,534)  (10,072)   (10,331)     (10,606)    (10,808)   (10,992)
                                                         -------  -------  --------   --------    ---------   ---------   --------
                                                         $56,794  $43,445  $190,111   $178,749    $(626,179)  $ 337,183   $406,753
                                                         =======  =======  ========   ========    =========   =========   ========
  Ratio                                                     3.1x     2.2x       2.9x       2.9x        (8.7)x       3.7x       4.5x
Deficiency in the coverage of fixed charges by earnings
  (loss) before fixed charges                                 --       --        --         --     (697,988)         --         --
                                                         =======  =======  ========   ========    =========   =========   ========


- -----------------------------
(1)   Dividends on shares of the Series B cumulative convertible preferred stock
      are used to pay debt service on notes issued by the CNF's Thrift and Stock
      Plan.

(2)   Estimate of the interest portion of lease payments.

(3)   For the year ended December 31, 2001, results included a $652.2 million
      loss from restructuring charges at Forwarding and Menlo Worldwide
      Logistics' $47.5 million loss from the business failure of a customer.

(4)   Preferred stock dividend requirements included in Combined Fixed Charges
      but not deducted in the determination of Income (Loss) from Continuing
      Operations Before Income Taxes.

EX-23.1

                                                                    EXHIBIT 23.1



            CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the use of our reports dated January 26, 2004, with respect to the
consolidated balance sheets of CNF Inc. as of December 31, 2003 and 2002, and
the related consolidated statements of operations, shareholders' equity, and
cash flows for the years then ended, and the related financial statement
schedule, incorporated herein by reference and to the reference to our firm
under the heading "Experts" in the Registration Statement and related
Prospectus.

Our reports refer to the revisions to the 2001 consolidated financial statements
to include the transitional disclosures required by Statement of Financial
Accounting Standards No. 142, Goodwill and Other Intangible Assets, for the
change in the method of accounting for goodwill, which was adopted by CNF Inc.
as of January 1, 2002, as described in Note 1 to the consolidated financial
statements, as well as the adjustments that were applied to restate the
disclosures of reportable segments reflected in the 2001 consolidated financial
statements to conform to the 2003 and 2002 composition of reportable segments,
as discussed in Note 16 to the consolidated financial statements. However, we
were not engaged to audit, review, or apply any procedures to the 2001
consolidated financial statements other than with respect to such revisions and
adjustments.


/s/  KPMG LLP
San Francisco, California
June 3, 2004

EX-25

                                                                      EXHIBIT 25

================================================================================

                                    FORM T-1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                            STATEMENT OF ELIGIBILITY
                   UNDER THE TRUST INDENTURE ACT OF 1939 OF A
                    CORPORATION DESIGNATED TO ACT AS TRUSTEE

                      CHECK IF AN APPLICATION TO DETERMINE
                      ELIGIBILITY OF A TRUSTEE PURSUANT TO
                              SECTION 305(b)(2) [ ]

                           ---------------------------

                              THE BANK OF NEW YORK

               (Exact name of trustee as specified in its charter)

New York                                                    13-5160382
(State of incorporation                                     (I.R.S. employer
if not a U.S. national bank)                                identification no.)

One Wall Street, New York, N.Y.                             10286
(Address of principal executive offices)                    (Zip code)

                           ---------------------------

                                    CNF Inc.
               (Exact name of obligor as specified in its charter)

Delaware                                                    94-1444798
(State or other jurisdiction of                             (I.R.S. employer
incorporation or organization)                              identification no.)

3240 Hillview Avenue
Palo Alto, California                                       94304
(Address of principal executive offices)                    (Zip code)

                           ---------------------------

                        6.70% Senior Debentures due 2034
                       (Title of the indenture securities)

================================================================================



1.       GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
         TRUSTEE:

         (a)      NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
                  WHICH IT IS SUBJECT.



                 Name                                               Address
                 ----                                               -------
                                                      
Superintendent of Banks of the State of                  2 Rector Street, New York, N.Y.
New York                                                 10006, and Albany, N.Y. 12203

Federal Reserve Bank of New York                         33 Liberty Plaza, New York, N.Y.
                                                         10045

Federal Deposit Insurance Corporation                    Washington, D.C.  20429

New York Clearing House Association                      New York, New York   10005


         (b)      WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.

         Yes.

2.       AFFILIATIONS WITH OBLIGOR.

         IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
         AFFILIATION.

         None.

16.      LIST OF EXHIBITS.

         EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
         ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
         RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
         C.F.R. 229.10(d).

         1.       A copy of the Organization Certificate of The Bank of New York
                  (formerly Irving Trust Company) as now in effect, which
                  contains the authority to commence business and a grant of
                  powers to exercise corporate trust powers. (Exhibit 1 to
                  Amendment No. 1 to Form T-1 filed with Registration Statement
                  No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
                  Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
                  filed with Registration Statement No. 33-29637.)

         4.       A copy of the existing By-laws of the Trustee. (Exhibit 4 to
                  Form T-1 filed with Registration Statement No. 33-31019.)

         6.       The consent of the Trustee required by Section 321(b) of the
                  Act. (Exhibit 6 to Form T-1 filed with Registration Statement
                  No. 33-44051.)

                                     - 2 -


         7.       A copy of the latest report of condition of the Trustee
                  published pursuant to law or to the requirements of its
                  supervising or examining authority.

                                     - 3 -


                                    SIGNATURE

         Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 20th day of May, 2004.

                                                 THE BANK OF NEW YORK

                                                 By:  /S/    MARY LAGUMINA
                                                      --------------------------
                                                      Name:  MARY LAGUMINA
                                                      Title: VICE PRESIDENT

                                     - 4 -


                                                                       EXHIBIT 7

                       Consolidated Report of Condition of

                              THE BANK OF NEW YORK

                    of One Wall Street, New York, N.Y. 10286
                     And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
2003, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.



                                                         Dollar Amounts
                                                          In Thousands
                                                      
ASSETS
Cash and balances due from depository institutions:
   Noninterest-bearing balances and
   currency and coin ..................................   $ 3,752,987
   Interest-bearing balances ..........................     7,153,561
Securities:
   Held-to-maturity securities ........................       260,388
   Available-for-sale securities ......................    21,587,862
Federal funds sold and securities purchased under
   agreements to resell
   Federal funds sold in domestic offices .............       165,000
   Securities purchased under agreements to
   resell .............................................     2,804,315
Loans and lease financing receivables:
   Loans and leases held for sale .....................       557,358
   Loans and leases, net of unearned
     income ...........................................    36,255,119
   LESS: Allowance for loan and
     lease losses .....................................       664,233
   Loans and leases, net of unearned
     income and allowance .............................    35,590,886
Trading Assets ........................................     4,892,480
Premises and fixed assets (including capitalized
   leases) ............................................       926,789
Other real estate owned ...............................           409
Investments in unconsolidated subsidiaries and
   associated companies ...............................       277,788
Customers' liability to this bank on acceptances
   outstanding ........................................       144,025
Intangible assets
   Goodwill ...........................................     2,635,322
   Other intangible assets ............................       781,009




                                                            
Other assets ..............................................      7,727,722
                                                               -----------
Total assets ..............................................    $89,257,901
                                                               ===========

LIABILITIES
Deposits:
   In domestic offices ....................................    $33,763,250
   Noninterest-bearing ....................................     14,511,050
   Interest-bearing .......................................     19,252,200
   In foreign offices, Edge and Agreement
     subsidiaries, and IBFs ...............................     22,980,400
   Noninterest-bearing ....................................        341,376
   Interest-bearing .......................................     22,639,024
Federal funds purchased and securities sold under
     agreements to repurchase
   Federal funds purchased in domestic
     offices ..............................................        545,681
   Securities sold under agreements to
     repurchase ...........................................        695,658
Trading liabilities .......................................      2,338,897
Other borrowed money:
   (includes mortgage indebtedness and obligations
   under capitalized leases) ..............................     11,078,363
Bank's liability on acceptances executed and
   outstanding ............................................        145,615
Subordinated notes and debentures .........................      2,408,665
Other liabilities .........................................      6,441,088
                                                               -----------
Total liabilities .........................................    $80,397,617
                                                               ===========
Minority interest in consolidated
   subsidiaries ...........................................        640,126

EQUITY CAPITAL
Perpetual preferred stock and related
   surplus ................................................              0
Common stock ..............................................      1,135,284
Surplus ...................................................      2,077,255
Retained earnings .........................................      4,955,319
Accumulated other comprehensive income ....................         52,300
Other equity capital components ...........................              0
                                                               -----------
Total equity capital ......................................      8,220,158
                                                               -----------
Total liabilities minority interest and equity capital.....    $89,257,901
                                                               ===========



                                     - 6 -


         I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition is true and
correct to the best of my knowledge and belief.

                                                     Thomas J. Mastro,
                                 Senior Vice President and Comptroller

         We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We declare that it has been examined by
us, and to the best of our knowledge and belief has been prepared in conformance
with the instructions and is true and correct.

Thomas A. Renyi
Gerald L. Hassell                      Directors
Alan R. Griffith

                                     - 7 -

EX-99.4

FORM OF LETTER OF TRANSMITTAL

EX-99.5

FORM OF NOTICE OF GUARANTEED DELIVERY

EX-99.6

FORM OF LETTER TO CLIENTS

EX-99.7

FORM OF LETTER TO BROKERS,DEALERS,BANKS,& NOMINEES