UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
July 2, 1998
Date of Report (Date of earliest event reported)
CONSOLIDATED DELIVERY & LOGISTICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 0-26954 22-3350958
(State or other jurisdiction of (Commission File (IRS Employer
incorporation or organization) Number) Identification No.)
380 Allwood Road, Clifton, New Jersey 07012
(Address of principal (Zip Code)
executive offices)
(Registrant's telephone number, including area code) (973) 471-1005
NOT APPLICABLE
(Former name or former address, if changed since last report.)
ITEM 2. Acquisition or Disposition of Assets
On July 2, 1998, Consolidated Delivery & Logistics, Inc. ("CDL")
entered into an agreement (the "Asset Purchase Agreement") with its
subsidiary, Click Messenger Service, Inc. ("Click") and Metro Courier
Network, Inc. ("Metro") and Dennis P. Roccaforte, Metro's controlling
shareholder, providing for the purchase of all assets and certain
liabilities of Metro by Click. Under the terms of the Asset Purchase
Agreement, the assets included Metro's accounts receivable, customer
list, machinery and equipment, inventories, license to use Metro's
intellectual property assets, prepaid expenses and general intangibles,
and the liabilities included trade payables, accrued expenses,
assumption of equipment and real property leases and the obligation to
perform continuing services required under acquired executory
contracts.
The purchase price for the assets was $4.25 million plus contingent
payments, with $2.5 million in cash and a $1.75 million convertible
note (the "Note"). The Note will bear interest at the rate of 7% per
annum, with interest payable quarterly, and is due July 2001. The Note
is subordinate to all indebtedness due or to become due to CDL's senior
lender, First Union Commercial Corporation or its affiliates. The Note
is convertible in its entirety at the option of the holder at any time
through July 1, 2001 into fully paid shares of CDL's common stock at a
conversion price of $7 per share. The Note is convertible in its
entirety at the option of CDL when the average closing sales price of
CDL's common stock equals or exceeds $7 per share over a 90 day period.
In addition, a contingent earn out in the aggregate amount of up to
$1,500,000 is payable to Metro based on the achievement of certain
financial goals by the newly formed division during the two year period
following the closing. The purchase price under the Asset Purchase
Agreement was determined by arm's length negotiations between the
parties based on the market value of the assets purchased and sold. CDL
financed the acquisition with proceeds from its revolving credit
facility with First Union Commercial Corporation.
The description above of the Asset Purchase Agreement and Note is a
summary and does not purport to be complete. Reference should be made
to the copies of such documents filed as exhibits to this report for a
complete description of their terms.
ITEM 7. Financial Statements and Exhibits
a. Financial Statement of Business Acquired.
It is impracticable to provide the required financial statements
for Metro at this time. The statements will be filed as an
amendment to this report on Form 8-K as soon as they are
prepared and not later than 60 days after the deadline for
filing this Form 8-K.
b. Pro Forma Financial Information
It is impracticable to provide the required pro forma financial
statements for Metro at this time. The statements will be filed
as an amendment to this report on Form 8-K as soon as they are
prepared and not later than 60 days after the deadline for
filing this Form 8-K.
c. Exhibits
10.1 Asset Purchase Agreement dated July 2, 1998 by and between
Consolidated Delivery & Logistics, Inc., Click Messenger
Service, Inc., Metro Courier Network, Inc. and Dennis
Roccaforte.
10.2 7% Subordinated Convertible Note Due 2001 of Consolidated
Delivery & Logistics, Inc.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: July 16, 1998 CONSOLIDATED DELIVERY & LOGISTICS, INC.
(Registrant)
By: /s/ Albert W. Van Ness, Jr.
Albert W. Van Ness, Jr.
Chairman of the Board, Chief Executive
Officer and Chief Financial Officer
Exhibit 10.1
ASSET PURCHASE AGREEMENT
DATED
AS OF JULY 2, 1998
BY AND BETWEEN
CONSOLIDATED DELIVERY & LOGISTICS, INC.,
CLICK MESSENGER SERVICE, INC.,
METRO COURIER NETWORK, INC.
AND
DENNIS ROCCAFORTE
C6074/1
07/16/988KMET
TABLE OF CONTENTS
ARTICLE I - Certain Definitions.............................................1
Section 1.1. Certain Definitions.......................................1
Section 1.2. Interpretation............................................6
ARTICLE II - Purchase and Sale of Assets; Assumption of Liabilities;
Additional Covenants........................................................7
Section 2.1. Purchase and Sale of Assets...............................7
Section 2.2. Purchase Price............................................7
Section 2.3. Settlement of the Purchase Price..........................7
Section 2.4. Allocation of the Purchase Price..........................8
Section 2.5. Closing...................................................8
ARTICLE III - Representations and Warranties of the Seller..................9
Section 3.1. Organization and Qualification of the Seller..............9
Section 3.2. Authorization.............................................9
Section 3.3. Non-contravention.........................................9
Section 3.4. No Consents..............................................10
Section 3.5. The Purchased Assets.....................................10
Section 3.6. Personal Property........................................10
Section 3.7. Real Property............................................10
Section 3.8. Predecessor Status.......................................10
Section 3.9. Employment Matters; No Collective Bargaining Agreement...11
Section 3.10. Financial Statements.....................................11
Section 3.11. Absence of Certain Developments..........................11
Section 3.12. Governmental Authorizations; Licenses....................12
Section 3.13. Litigation...............................................12
Section 3.14. Undisclosed Liabilities..................................13
Section 3.15. Taxes................................................ ...13
Section 3.16. Insurance............................................. ..13
Section 3.17. Environmental Matters....................................13
Section 3.18. Proprietary Rights.......................................14
Section 3. 19. Material Customers' Contracts and Commitments............14
Section 3.20. Accounts Receivable.................................... .15
Section 3.21. Books and Records........................................15
Section 3.22. Brokers..................................................15
Section 3.23. Full Disclosure..........................................15
ARTICLE IV - Representations and Warranties of the Purchaser...............15
Section 4.1. Organization.............................................15
Section 4.2. Authorization............................................16
Section 4.3. Non-contravention........................................16
Section 4.4. No Consents..............................................16
Section 4.5. Registration Statement...................................16
Section 4.6. Brokers..................................................16
ARTICLE V - Covenants and Agreements.......................................16
Section 5.1. Closing Documents........................................16
Section 5.2. Transfer and Property Taxes..............................17
Section 5.3. Non-Competition and Confidentiality Agreement............17
Section 5.4. Best Efforts; Further Assurances.............. ..........18
Section 5.5. Employment Matters.......................................19
Section 5.6. Compliance with Securities Act...........................19
ARTICLE VI - Conditions to Closing.........................................20
Section 6.1. Mutual Conditions .......................................20
Section 6.2. Conditions to the Purchaser's Obligations. ..............21
Section 6.3. Conditions to the Seller's Obligations...................22
ARTICLE VII - Survival of Representations and Warranties; Indemnification..24
Section 7.1. Survival of Representations and Warranties...............24
Section 7.2. Indemnification..........................................24
Section 7.3. Procedures for Claims................................... 24
Section 7.4. Procedures for Inter-Party Claims........................25
ARTICLE VIII - Miscellaneous...............................................25
Section 8.1. Notices. ................................................25
Section 8.2. Expenses. ...............................................26
Section 8.3. Governing Law; Consent to Jurisdiction. .................26
Section 8.4. Assignment; Successors and Assigns; No Third Party Rights27
Section 8.5. Counterparts. ...........................................27
Section 8.6. Titles and Headings. ....................................27
Section 8.7. Entire Agreement. .......................................27
Section 8.8. Amendment and Modification. .............................27
Section 8.9. Public Announcement. ....................................27
Section 8.10. Waiver. .................................................27
Section 8.11. Severability.............................................27
Section 8.12. No Strict Construction. .................................28
Section 8.13. Risk of Loss.............................................28
Schedules
Schedule 1.1AL Assumed Liabilities
Schedule 1.1PA Purchased Assets
Schedule 3.1 Foreign Qualification
Schedule 3.3 Contravention of Agreements
Schedule 3.4 Consents
Schedule 3.6 Encumbrances
Schedule 3.8 Predecessor Names
Schedule 3.9 Employee List
Schedule 3.10 GAAP Disclosures
Schedule 3.11 Certain Developments
Schedule 3.12 Authorizations
Schedule 3.13 Litigation
Schedule 3.15 Tax Contests
Schedule 3.16 Insurance Policies
Schedule 3.17 Environmental Matters
Schedule 3.18 Proprietary Rights
Schedule 3.19 Material Customers, Contracts and Commitments
Schedule 3.20 Accounts Receivable
Exhibits
Exhibit A Allocation of Purchase Price (To be delivered post-closing)
Exhibit B Form of Convertible Note
Exhibit C Form of Contingent Convertible Notes
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of July 2, 1998, by and
between CONSOLIDATED DELIVERY & LOGISTICS, INC., a Delaware corporation ("CDL"),
CLICK MESSENGER SERVICE, INC., a New Jersey corporation (the "Purchaser"), METRO
COURIER NETWORK, INC. a [Massachusetts] corporation (the "Seller"), and DENNIS
P. ROCCAFORTE (the "Shareholder").
W I T N E S S E T H:
WHEREAS, prior to the date hereof, the Seller has engaged in
the small package express delivery business and related operations (the
"Business"); and
WHEREAS, the Seller desires to sell and transfer to the
Purchaser, and the Purchaser desires to purchase and assume from the Seller, all
of the assets and certain scheduled liabilities relating to the Business, all as
more specifically provided herein; and
WHEREAS, the Purchaser is a wholly owned subsidiary of CDL;
WHEREAS, the Shareholder is the controlling 50%
shareholder of the Seller (with his parents owning the remaining 50%);
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and intending to be legally bound, the Seller, the
Shareholder, the Purchaser and CDL agree as follows:
ARTICLE I
Certain Definitions
Section 1.1. Certain Definitions. As used in this
Agreement, the following terms have the respective meanings set forth below.
"Affiliate" means, with respect to any Person, any other
Person who directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person. The term
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlled" and "controlling" have meanings correlative thereto.
"Agreement" means this Asset Purchase Agreement.
"Assumed Liabilities" means only the following liabilities:
(a) trade payables and accrued expenses of Seller originating in the ordinary
course of business and listed on Schedule 1.1AL; (b) the obligations arising
after the Closing Date under the real estate leases and leases of certain
equipment listed on Schedule 1.1AL, and (c) the obligations of the Seller to
perform, after the Closing Date, continuing services required under executory
contracts with the customers of Seller detailed on Schedule 3.19 and which are
expressly assumed by the Purchaser at the Closing. No other liabilities are to
be assumed by the Purchaser.
"Authorizations" has the meaning ascribed to such term in
Section 3.12.
"Business" has the meaning ascribed to such term in the first
recital to this Agreement.
"Business Day" means a day, other than a Saturday or Sunday,
on which commercial banks in New Jersey and Massachusetts are open for the
general transaction of business.
"Closing" has the meaning ascribed to such term in
Section 2.5.
"Closing Date" has the meaning ascribed to such term in
Section 2.5.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contingent Convertible Notes" means First Contingent
Convertible Note and the Second Contingent Convertible Note.
"Conversion Value" with respect to the Common Stock of CDL
means $7.00 per share, as adjusted from time to time after the date hereof
pursuant to Section 3.06 of the Convertible Note.
"Convertible Note" means the promissory note of CDL in the
principal amount of $1,750,000, bearing interest at the rate of 7% per annum and
convertible into shares of the Common Stock of CDL at the Conversion Value, all
on the terms set forth in the form of convertible note attached hereto as
Exhibit B.
"Damages" has the meaning ascribed to such term in
Section 7.2.
"Division" shall mean the former business of the Seller,
involving utilization of the Purchased Assets to provide delivery services to
the customers on the Customer List, as operated by the Purchaser as a separate
profit center.
"EBIT" means net earnings before interest and taxes, computed
in accordance with GAAP.
"Encumbrances" has the meaning ascribed to such term in
Section 3.3.
"Environmental Laws" means any federal, state and local law,
statute, ordinance, rule, regulation, license, permit, authorization, approval,
consent, court order, judgment, decree, injunction, code, requirement or
agreement with any Governmental Authority, (x) relating to pollution (or the
investigation or cleanup thereof or the filing of information with respect
thereto), human health or the protection of air, surface water, ground water,
drinking water supply, land (including land surface or subsurface), plant and
animal life or any other natural resource, or (y) concerning exposure to, or the
use, storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production or disposal of Regulated Substances, in each case
as amended and as now or hereafter in effect.
"Excluded Liabilities" means any and all liabilities or
obligations of the Seller or of the Affiliates of the Seller, of any kind or
nature, whether or not relating to the Business or the Purchased Assets, and
whether known or unknown, absolute, accrued, contingent or otherwise, or whether
due or to become due, arising out of events or transactions or facts occurring
on, prior to, or after the Closing Date, other than Assumed Liabilities, but
specifically including as Excluded Liabilities all amounts due to the
Shareholder or any related or Affiliated party and all expenses of this
transaction.
"Financial Statements" has the meaning ascribed to such term
in Section 3.10.
"First Benchmark" shall mean $1,085,000.
"First Contingent Convertible Note" means the contingent
promissory note of CDL in the principal amount of up to $375,000, bearing
interest at the rate of 0% per annum until the date ninety (90) days after the
last day of the First Measurement Period and 7% per annum thereafter and
convertible (after the date ninety (90) days after the end of the First
Measurement Period) at fair market value (as defined in the First Contingent
Convertible Note) on the date that notice of conversion is given to or by CDL,
all on the terms set forth in the form of note attached hereto as Exhibit C-1.
"First Sum" and "Second Sum" have the meanings ascribed to
such terms in Section 2.3.
"First Measurement Period" shall mean a period of twelve (12)
consecutive calendar months, beginning on the Selected Date.
"First Period Synergy Savings" means the cost reduction
savings during the First Measurement Period achieved by the Northeast Division
of CDL (but excluding the Division) from payroll reductions, occupancy expense
reductions, vehicle expense reductions and the like which are created solely
through the efforts of the Shareholder. It is the intent of this definition and
the definition of Second Period Synergy Savings that savings which impact the
financial results of the Division shall NOT be included as Synergy Savings.
"GAAP" means generally accepted accounting principles as in
effect in the United States on the date of this Agreement.
"Governmental Authority" means any national, federal, state,
provincial, county, municipal or local government, foreign or domestic, or the
government of any political subdivision of any of the foregoing, or any entity,
authority, agency, ministry or other similar body exercising executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to government, including any authority or other quasi-governmental
entity established to perform any of such functions.
"Indemnified Party" has the meaning ascribed to such term in
Section 7.2.
"Indemnifying Party" has the meaning ascribed to such term in
Section 7.2.
"Material Adverse Change" means a material adverse change in
the Business of the Seller, or in the financial condition, results of operations
or prospects (financial and other) of the Seller's Business or the Purchased
Assets.
"NMS" means the Nasdaq National Market System.
"Person" means an individual, partnership, corporation, joint
stock company, unincorporated organization or association, trust or joint
venture, or a governmental agency or political subdivision thereof.
"Purchase Price" has the meaning ascribed to such term in
Section 2.2.
"Purchased Assets" means all of the right, title and interest
in and to all assets used in the conduct of the Business, wherever located,
whether tangible or intangible (including, without limitation, goodwill). The
Purchased Assets include, without limitation, the following:
(a) all cash, accounts receivable and notes receivable
and all reserves related thereto, deposits, advances and manufacturer and
supplier rebates (the "Accounts Receivable");
(b) a list of all customers with whom the Seller (i) currently
does business, (ii) will do business between the date hereof and the date of
Closing, or (iii) has done business with since January 1, 1996, which customer
list shall include names, addresses, contact persons, and telephone (the
"Customer List");
(c) all rights of the Seller to transact business with such
current, former or future customers on the Customer List, all rights under any
executory contract, agreement or purchase order form, or contract with, any
customer on the Customer List or supplier, related to the Business to which the
Seller or any of its Affiliates is a party that is designated on Schedule 3.19
including an assignment of any contracts listed on Schedule 3.19 between a
customer on the Customer List or supplier, and the Seller;
(d) the machinery and equipment (including spare parts) and
business machines, automobiles, trucks, trailers, fork-lift trucks, and other
vehicles, furniture, fixtures, supplies, capital improvements in process, tools
and all other tangible personal property employed in the conduct of the Business
or owned by the Seller, including those assets listed on Schedule 1.1PA;
(e) all inventories, including, supplies and
packaging and shipping materials (the "Inventory");
(f) all authorizations, consents, approvals, licenses,
orders, permits, exemptions of, filings or registrations with, any
Governmental Authority;
(g) all patents, patent registrations, patent applications,
trademarks, service marks, trademark and service mark registrations and
applications therefor, copyrights, copyright registrations, copyright
applications, technology, inventions, computer software, data and documentation
(including electronic media), product drawings, trade secrets, know-how,
customer lists, processes, other intellectual property and proprietary
information or rights related to or used in the conduct of the Business; and
permits, licenses or other agreements to or from third parties regarding the
foregoing (the "Proprietary Rights");
(h) use of the corporate name and logo for Metro Courier
Network;
(i) all telephone numbers in the name of the Seller or
used in the Business;
(j) all prepaid rentals, deposit (including security
deposits), advances and other prepaid expenses; and
(k) all other assets used in the conduct of the Business,
whether or not reflected on the books and records of the Seller, including
without limitation, the Business as a going concern, its goodwill and
franchises, its rights to insurance proceeds with respect to its assets, its
restrictive covenants and obligations of present and former employees, agents,
representatives, independent contractors and others, all books, records, files
and papers relating to, or necessary to the conduct of, the Business, including
without limitation, operating and training manuals, computer programs, manuals
and data, catalogs, quotations, bids, sales and promotional materials,
correspondence, trade association memberships (to the extent transferable),
research and development records, prototypes and models, lists of present and
former suppliers, customer credit information, customers' pricing information,
business plans, studies and analyses, whether prepared by the Seller or a third
party, relating to the Business, books of account, accounting records and other
records relating to the Business.
"Regulated Substances" means pollutants, contaminants,
hazardous or toxic substances, compounds or related materials or chemicals,
hazardous materials, hazardous waste, flammable explosives (including, but not
limited to radon, radioactive materials, asbestos, urea formaldehyde foam
insulation and polychlorinated biphenyls), medical waste or by-products,
petroleum and petroleum products (including, but not limited to, waste petroleum
and petroleum products) as regulated under applicable Environmental Laws.
"SEC" has the meaning ascribed to such term in Section 5.12.
"SEC Documents" has the meaning ascribed to such term in
Section 5.6.
"Second Benchmark" shall mean $1,248,000.
"Second Contingent Convertible Note" means the contingent
promissory note of CDL in the principal amount of up to $375,000, bearing
interest at the rate of 0% per annum until the date ninety (90) days after the
last day of the Second Measurement Period and 7% per annum thereafter and
convertible (after the date ninety (90) days after the end of the Second
Measurement Period) at fair market value (as defined in the Second Contingent
Convertible Note) on the date that notice of conversion is given to or by CDL,
all on the terms set forth in the form of note attached hereto as Exhibit C-2.
"Second Measurement Period" shall mean a period of twelve (12)
consecutive calendar months, beginning on the date one year after the Selected
Date.
"Second Period Synergy Savings" means the cost reduction
savings during the Second Measurement Period achieved by the Northeast Division
of CDL (but excluding the Division) from payroll reductions, occupancy expense
reductions, vehicle expense reductions and the like which are created solely
through the efforts of the Shareholder.
"Securities Act" means the Securities Act of 1933, as amended.
"Selected Date" means the first day of any calendar month in
the period from July 1, 1998 through June 1, 1999 which is designated by the
Shareholder as the "Selected Date" in writing to the Purchaser on or prior to
June 1, 1999. If no such Selected Date is chosen by the Shareholder, the
Selected Date shall be deemed to be June 1, 1999.
"Seller's Accountant" means Leonard, Mulherin & Greene, the
firm of independent certified public accountants which has audited Seller's
books and records.
"Survival Period" has the meaning ascribed to such term in
Section 7.1
"Third Party Claim" has the meaning ascribed to such term in
Section 7.3.
"Working Capital" means current assets less current
liabilities, as defined in GAAP.
Section 1.2. Interpretation. Unless otherwise indicated to the
contrary herein by the context or use thereof: (i) the words, "herein,"
"hereto," "hereof" and words of similar import refer to this Agreement as a
whole and not to any particular Section or paragraph hereof; (ii) words
importing the masculine gender shall also include the feminine and neutral
genders, and vice versa; and (iii) words importing the singular shall also
include the plural, and vice versa.
ARTICLE II
Purchase and Sale of Assets; Assumption of Liabilities;
Additional Covenants
Section 2.1. Purchase and Sale of Assets. Upon the terms and
subject to the conditions of this Agreement and on the basis of the
representations, warranties and agreements contained herein, at the Closing (as
defined in Section 2.5), the Seller shall sell, assign, transfer, convey and
deliver to the Purchaser all of the Seller's right, title and interest in and to
the Purchased Assets and the Purchaser shall purchase such Purchased Assets from
the Seller and assume the Assumed Liabilities. EXCEPT AS OTHERWISE EXPRESSLY
PROVIDED IN THIS AGREEMENT, THE PURCHASER IS NOT ASSUMING, NOR SHALL IT IN ANY
MANNER BECOME LIABLE FOR, ANY LIABILITIES OR OBLIGATIONS OF ANY KIND OR NATURE
WHATSOEVER OF THE SELLER OR ITS AFFILIATES.
Section 2.2. Purchase Price.
(a) The aggregate purchase price (the "Purchase
Price") to be paid by the Purchaser for the Purchased Assets shall be
$4,250,000 plus the contingent payments pursuant to Section 2.3(b) and (c).
(b) Seller represents and warrants that (i) all
assets on its balance sheet at December 31, 1997 remain as assets at the
Closing Date except for de minimis sales in the ordinary course and (ii) its
Working Capital at the Closing Date is not less than its Working Capital at
December 31, 1997.
Section 2.3. Settlement of the Purchase Price. (a) On the
Closing Date, the Purchaser shall pay the Seller the Purchase Price by delivery
of (a) a check or wire transfer in the sum of $2,500,000, and (b) the
Convertible Note in the principal amount of $1,750,000 and (c) the Contingent
Convertible Notes in the aggregate contingent principal amount of up to
$750,000.
(b) First Period Earn Out. (i) On or before the
date forty-five (45) days after the end of the First Measurement Period, CDL
shall determine: (A) the EBIT of the Division for the First Measurement Period,
to be computed in accordance with GAAP, except that EBIT shall be reduced by a
corporate charge equal to two (2%) of the gross revenues of the Division during
the First Measurement Period and (B) the First Period Synergy Savings. If (x)
the sum of the amounts described in clause (A) and (B) (the "First Sum") does
not exceed the First Benchmark, or (y) the First Sum exceeds the First Benchmark
but the closing sales price of CDL's Common Stock as reported on the NMS on the
date thirty (30) days after the end of the First Measurement Period) (the "First
Period Price"), is less than the Conversion Value and the Purchaser has made the
payment required by (b)(ii) below, then the principal amount of the First
Contingent Convertible Note shall be automatically reduced by Three Hundred
Seventy-Five Thousand ($375,000) Dollars, from $375,000 to zero, and the First
Contingent Convertible Note shall be discharged in full and canceled.
(ii) If the First Sum equals or exceeds the
First Benchmark after the First Measurement Period, then the Purchaser shall pay
the Seller either (x) $750,000 in cash (if the First Period Price is less than
the Conversion Value) or (y) $375,000 in cash (if the First Period Price equals
or exceeds the Conversion Value) plus the conversion rights under the First
Contingent Convertible Note.
(c) Second Period Earn Out. (i) On or before
the date forty-five (45) days after the end of the Second Measurement Period,
CDL shall determine: (A) the EBIT of the Division for the Second Measurement
Period, to be computed in accordance with GAAP, except that EBIT shall be
reduced by a corporate charge equal to two (2%) of the gross revenues of the
Division during the Second Measurement Period and (B) the Second Period Synergy
Savings. If (x) the sum of the amounts in clause (A) and (B) above (the "Second
Sum") does not exceed the Second Benchmark, or (ii) if the Second Sum exceeds
the Second Benchmark but the closing sales price of CDL's Common Stock as
reported on the NMS on the date thirty (30) days after the end of the Second
Measurement Period (the "Second Period Price"), is less than the Conversion
Value and the Purchaser has made the payment required by (c)(ii) below, then the
principal amount of the Second Contingent Convertible Note shall be
automatically reduced by Three Hundred Seventy-Five Thousand ($375,000) Dollars,
from $375,000 to zero, and the Second Contingent Convertible Note shall be
discharged in full and canceled.
(ii) If the Second Sum equals or exceeds the
Second Benchmark after the Second Measurement Period, then the Purchaser shall
pay the Seller either (x) $750,000 in cash (if the Second Period Price is less
than the Conversion Value) or (y) $375,000 in cash (if the Second Period Price
equals or exceeds the Conversion Value).
(d) General Earn Out Provisions. CDL shall
cause the books and records of the Division to be maintained as a separate
profit center during the First Measurement Period and the Second Measurement
Period, so that the amounts due pursuant to the Contingent Payment can be
determined. All determinations by CDL's independent public accountants hereunder
shall be final and binding absent manifest error.
Section 2.4. Allocation of the Purchase Price. The Purchase
Price shall be allocated as set forth in Exhibit A hereto. The Purchaser, CDL,
the Shareholder and the Seller shall use such allocation in filing their
respective Internal Revenue Service Form 8594s and any other tax filings.
Section 2.5. Closing. The closing of the transactions
contemplated hereby (the "Closing") shall take place at the offices of CDL at
380 Allwood Road, Clifton New Jersey 07012 on July 2, 1998 at 11:00 a.m.,
effective as of the commencement of business on that date, or at such other time
and date thereafter as the Purchaser, CDL, the Seller and the Shareholder may
mutually agree, which date shall be referred to as the "Closing Date".
ARTICLE III
Representations and Warranties of the Seller and the Shareholder
The Seller and the Shareholder jointly and severally represent
and warrant to the Purchaser and CDL as follows:
Section 3.1. Organization and Qualification of the Seller. The
Seller is a corporation duly organized, validly existing and in good standing
under the laws of the State of Massachusetts, with full power and authority,
corporate and other, to own or lease its property and assets and to carry on the
Business as presently conducted, and is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which the
Seller is currently conducting the Business or where the failure to be so
qualified and in good standing would not reasonably be expected to result in a
Material Adverse Change. Each jurisdiction in which the Seller conducts the
Business is listed on Schedule 3.1. The Shareholder is the sole the Shareholder
of the Seller. The Seller has no subsidiary corporations.
Section 3.2. Authorization. The Seller has full power and
authority, corporate and other, to execute and deliver this Agreement, the
instruments of transfer and other documents and to perform its obligations
hereunder and thereunder, all of which have been duly authorized by all
requisite corporate action. Each of this Agreement and each such instrument of
transfer has been or, at the time of delivery will be, duly authorized, executed
and delivered by the Seller and, to the extent appropriate, the Shareholder and
constitutes or, at the time of delivery will constitute, a valid and binding
agreement of the Seller or the Shareholder, as the case may be, enforceable
against the Seller and/or the Shareholder, as the case may be, in accordance
with its terms.
Section 3.3. Non-contravention. Except as otherwise set forth
in Schedule 3.3, neither the execution and delivery of this Agreement or the
instruments of transfer nor the performance by the Seller and the Shareholder of
their respective obligations hereunder and thereunder will (i) contravene any
provision contained in the Seller's Certificate of Incorporation or By-laws,
copies of which previously have been delivered to the Purchaser and CDL, (ii)
result in a material breach (with or without the lapse of time, the giving of
notice or both) of or constitute a material default under (A) any contract,
agreement, commitment, indenture, mortgage, lease, pledge, note, license, permit
or other instrument or obligation or (B) any judgment, order, decree, law, rule
or regulation or other restriction of any Governmental Authority, in each case
to which the Seller or the Shareholder is a party or by which either is bound or
to which any of either of its assets or properties are subject, (iii) result in
the creation or imposition of any lien, claim, charge, mortgage, pledge,
security interest, equity, restriction or other encumbrance (collectively,
"Encumbrances") on any of the Seller's assets or properties, or (iv) result in
the acceleration of, or permit any Person to accelerate or declare due and
payable prior to its stated maturity, any liability.
Section 3.4. No Consents. Except as set forth in Schedule 3.4,
no notice to, filing with, or authorization, registration, consent or approval
of any Governmental Authority or to the best knowledge of the Seller or the
Shareholder, other Person is necessary for the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby by the Seller or the Shareholder and the assignment of the
benefits of any material agreements of Seller to the Purchaser.
Section 3.5. The Purchased Assets. No third party (including
any Affiliate) owns or has any interest by lease, license or otherwise in any of
the Purchased Assets, except for the lessor under the equipment leases listed on
Schedule 1.1AL. After the Closing, the Purchaser will have good and marketable
title to the Purchased Assets, free and clear of all Encumbrances.
Section 3.6. Personal Property. Except as otherwise set forth
in Schedule 3.6, the Seller has good and marketable title to (or valid leasehold
or contractual interests in) all personal property comprising the Purchased
Assets, free and clear of any Encumbrances. To the best knowledge of Seller and
the Shareholder, all machinery, equipment, furniture, fixtures and other
personal property used in the Business and included in the Purchased Assets is
in good operating condition and fit for operation in the ordinary course of
business (subject to normal wear and tear) with no defects that could interfere
with the conduct of normal operations of such equipment, furniture, fixtures and
other personal property and are suitable for the purposes for which they are
currently being used.
Section 3.7. Real Property. The Seller does not own any real
property or real estate. Seller has delivered true and complete copies of its
real property leases for its Business premises located at 175 Bay State Drive,
Braintree, Massachusetts and 576 Mammoth Road, Londonderry, New Hampshire (the
"Leased Real Property") which is its only real estate lease. The Seller is in
compliance with all terms and conditions of such leases and is subject to no
past due obligations or contingent liabilities in respect of such leased
premises. To the best knowledge of Seller and the Shareholder, the landlord
under such leases also are in compliance with the terms and conditions of such
leases. Seller has received any and all consents necessary to assign such leases
to the Purchaser and has given all required notifications. The Seller has valid
leasehold title to the Leased Real Property, free and clear of all Encumbrances.
To the best knowledge of Seller and the Shareholder, all plants, structures and
buildings leased by of the Companies are in good operating condition and fit for
operation in the ordinary course of business (subject to normal wear and tear)
with no structural or other defects that could interfere with the conduct of
normal operations of such facilities and are suitable for the purposes for which
they are currently being used. To the best knowledge of the Seller and the
Shareholder, the Seller is not in violation of any building, zoning,
anti-pollution, health, occupational safety or other law, ordinance or
regulation regarding its plants, structures and equipment or their operations.
Section 3.8. Predecessor Status. Set forth in Schedule 3.8 is
a listing of all names of all predecessor companies of the Seller, including the
names of any entities from whom within the last five years the Seller previously
acquired significant assets. The Seller has never been a subsidiary or division
of another corporation or a part of any acquisition which was later rescinded.
The Seller was formed on March 5, 1992 and has never been known by any other
name.
Section 3.9. Employment Matters; No Collective Bargaining
Agreement. (a) It has no employee benefit plans of any kind or nature (including
but not limited to plans under ERISA) except for a 401(k) plan and a
contributory employee health and life insurance plan. The Purchaser and CDL
shall have no obligation under or related to either such plan to any employee of
the Seller hired by the Purchaser. There are no employment or compensation
agreements with any employees of the Seller. All employees of the Seller are
employees-at-will.
(b) No employees of the Seller have been, or are currently
represented by, any labor union or covered by any collective bargaining
agreement nor, to the best of the Shareholder's or the Seller's knowledge, is
any organization campaign to establish such representation in progress. There is
no pending or, to the Shareholder's or the Seller's knowledge, threatened labor
dispute involving the Seller, the Seller has not experienced any labor
interruption, strike, slowdown, picketing, work stoppage or other labor dispute
over the past three years, nor to the Shareholder's or the Seller's knowledge,
has any application or complaint about the Seller been filed by an employee or
any union with the National Labor Relations Board or any comparable state or
local agency since inception and the Seller considers its relationship with its
employees to be good. The Seller is not bound by nor subject to (and none of its
assets or properties are bound by or subject to) any arrangement with any labor
union.
(c) Schedule 3.9c contains a true and complete list as of July
1, 1998 of the employees currently employed by the Seller, indicating the title
or position of each and a description of any agreements concerning such
employees and the current compensation payable by the Seller to each employee.
Section 3.10. Financial Statements. The Seller has previously
delivered unaudited financial statements and will shortly after Closing furnish
to the Purchaser, on an audited basis, (i) a true and complete copy of the
Seller's balance sheet as of December 31, 1997 and the related statements of
earnings and cash flows for the fiscal year ended December 31, 1997 with notes
thereto, audited by Sellers' Accountants which are set forth on Schedule 3.10,
and (ii) a true and complete copy of the Seller's unaudited balance sheet as of
May 31, 1998 and the related unaudited statements of earnings and cash flows for
the five months then ended, certified by the Seller's chief financial officer
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in conformity with GAAP, applied on a consistent basis throughout the
respective periods and present fairly in all material respects the financial
condition and results of operations of the Seller as of and for the periods
included therein.
Section 3.11. Absence of Certain Developments. Except as set
forth in Schedule 3.11, since May 31, 1998, there has not been any Material
Adverse Change, or any development which could reasonably be expected to result
in a prospective Material Adverse Change. Except as set forth in Schedule 3.11,
since May 31, 1998, the Seller has conducted the Business in the ordinary and
usual course consistent with past practices and has not (i) sold, leased,
transferred or otherwise disposed of any of the assets of the Business to any
Person, including, without limitation, the Shareholder (other than dispositions
in the ordinary course of business consistent with past practices), (ii)
breached, terminated or amended in any material respect any contract or lease to
which the Seller is a party or to which it is bound or to which its properties
are subject, (iii) suffered any material loss, damage or destruction whether or
not covered by insurance, (iv) made any change in the accounting methods or
practices it follows, whether for general financial or tax purposes, (v)
incurred any liabilities (other than in the ordinary course of business) none of
which individually or in the aggregate, are material, (vi) incurred, created or
suffered to exist any Encumbrances on the Purchased Assets, (vii) made any plan,
agreement or arrangement granting any preferential rights to purchase or acquire
any of the Purchased Assets or requiring consent of any party to the transfer of
the Purchased Assets or assignment of the accounts to be assumed by the
Purchaser (as detailed on Schedule 3.19), (viii) entered into any contract or
other agreement requiring the Seller to make payments in excess of $5,000 per
annum, individually or in the aggregate, other than in the ordinary course of
business consistent with past practices, or (ix) entered into any agreement to
do any of the foregoing.
Section 3.12. Governmental Authorizations; Licenses. The
Business has been operated to the best knowledge of Seller and the Shareholder
in compliance with all applicable laws, rules, regulations, codes, ordinances,
orders, policies and guidelines of all Governmental Authorities, including but
not limited to, those related to: pricing, sales or distribution of products,
antitrust, trade regulation, trade practices, sanitation, land use and similar
laws. The Seller has all permits, licenses, approvals, certificates, titles,
fuel permits, franchises, operating authorities (including any necessary FAA or
ICC operating authorities), state operating licenses or registrations and other
interstate or intrastate regulatory licenses and other authorizations, and has
made all notifications, registrations, certifications and filings with all
Governmental Authorities, necessary or advisable for the operation of the
Business as currently conducted by the Seller, except for those which,
individually or in the aggregate could not reasonably be expected to result in a
Material Adverse Change. There is no action, case or proceeding pending or, to
the Shareholder's or Seller's best knowledge after due investigation, threatened
by any Governmental Authority with respect to (i) any alleged violation by the
Seller or its Affiliates of any law, rule, regulation, code, ordinance, order,
policy or guideline of any Governmental Authority, or (ii) any alleged failure
by the Seller or its Affiliates to have any permit, license, approval,
certification or other authorization required in connection with the operation
of the Business. No notice of any violation of such laws has been received by
the Seller, any Affiliate of the Seller or the Shareholder. Schedule 3.12 sets
forth a true and complete list of all of the Seller's permits, licenses,
approvals, certificates, registrations and other authorizations relating to the
Business (the "Authorizations"). Such Authorizations are in full force and
effect and neither the Seller nor the Shareholder have received notification of
the suspension or cancellation of, or the intent to cancel, terminate or not
renew, any thereof. The Shareholder and the Seller have no grounds to believe
that any of the authorizations listed on Schedule 3.12 will not be transferable
to the Purchaser.
Section 3.13. Litigation. Except as otherwise set forth in
Schedule 3.13, there are no lawsuits, actions, proceedings, claims, orders or
investigations by or before any Governmental Authority pending or, to the
Shareholder's or the Seller's knowledge, threatened against the Seller, its
Affiliates or the Shareholder relating to the Business, the Purchased Assets, or
seeking to enjoin the transactions contemplated hereby and, there are no facts
or circumstances known to the Shareholder or the Seller that could result in a
claim for damages or equitable relief which, if decided adversely, could
reasonably be expected to result in a Material Adverse Change, individually or
in the aggregate.
Section 3.14. Undisclosed Liabilities. Other than those
reflected in the Financial Statements or Schedule 1.1AL, there are no
liabilities of the Seller of any kind or nature whatsoever, whether known or
unknown, absolute, accrued, contingent or otherwise, or whether due or to become
due, other than liabilities incurred in the ordinary course of business and
consistent with past practices since the date of the Financial Statements, and,
to the best knowledge of Seller and the Shareholder, there exists no facts or
circumstances (other than general economic conditions) that could reasonably be
expected to result in any such liability.
Section 3.15. Taxes. All federal, state, county, local and
foreign tax returns and reports of the Seller or any Affiliate of the Seller
required to be filed which relate to or affect the Business or the Purchased
Assets have been duly filed. To the best knowledge of Seller or the Shareholder,
there are no examinations in progress or claims against Seller for federal,
state, local and other taxes (including penalties and interest) for any period
or periods and no notice of any claim for taxes, whether pending or threatened
has been received. All federal, state, county, local, foreign and any other
taxes (including all income, withholding and employment taxes), assessments
(including interest and penalties), fees and other governmental charges with
respect to the employees, properties, assets, income or franchises of the Seller
or any Affiliate of the Seller relating to or affecting the Business or the
Purchased Assets have been paid or duly provided for, or are being contested in
good faith by appropriate proceedings as disclosed on Schedule 3.15 and adequate
reserves therefor have been established pursuant to GAAP, or have arisen after
the date hereof in the ordinary course of business.
There are no tax liens on any of the Purchased Assets.
Section 3.16. Insurance. At all times prior to the execution
of this Agreement, the Seller has maintained certain insurance policies covering
the Purchased Assets and the Business. Such insurance policies are currently in
full force and have remained in full force and effect through the Closing.
Schedule 3.16 lists all insurance policies in effect with respect to the Seller
or its Business during the past three (3) years, showing, as to each policy or
binder, the carrier, policy number, coverage limits, expiration dates, annual
premiums, deductibles or retention levels and a general description of the type
of coverage provided.
Section 3.17. Environmental Matters. Except as set forth on
Schedule 3.17, (i) to the best knowledge of Seller and the Shareholder, and
without inquiry, the Business is being and has been conducted in compliance with
all Environmental Laws, (ii) to the best knowledge of Seller and the
Shareholder, the Business has, and at all times has had, all permits, licenses
and other approvals and authorizations required under applicable Environmental
Laws for the operation of the Business, (iii) neither the Seller nor the
Shareholder have received any notice from any Governmental Authority that the
Seller or any of its Affiliates may be a potentially responsible party in
connection with any waste disposal site or facility used, directly or
indirectly, by or otherwise related to the Business, (iv) no reports have been
filed, or have been required to be filed, by the Seller or the Shareholder,
concerning the release of any Regulated Substance or the violation of any
Environmental Law, on or at the properties used in the Business; (v) there have
been no environmental investigations, studies, audits, tests, reviews, or other
analyses conducted by or which are in the possession of the Seller or any
Affiliate of the Seller relating to the Business, true and complete copies of
which have not been delivered to the Purchaser and CDL prior to the date hereof,
(vi) to the best knowledge of the Seller and the Shareholder, no Regulated
Substance has been disposed of, transferred, released or transported from the
Seller's business premises, other than as permitted under applicable
Environmental Law pursuant to appropriate regulations, permits or
authorizations, and (vii) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or other proceedings
pending or, to the best knowledge of Seller and the Shareholder, threatened
against the Business or the Seller or any Affiliate of the Seller with respect
to the Business or the Purchased Assets relating to any violations, or alleged
violations, of any Environmental Law.
Section 3.18. Proprietary Rights. (a) Except as disclosed in
Schedule 3.18, the Seller owns and possesses all right, title and interest in
the Proprietary Rights. Upon consummation of the transactions contemplated
hereby, the Purchaser will own all right, title and interest in, the Proprietary
Rights. The Seller has taken all necessary or desirable action to protect the
Proprietary Rights and the transactions contemplated by this Agreement will have
no material adverse effect on the Seller's right, title and interest in the
Proprietary Rights.
(b) No claim by any third party contesting the validity,
enforceability, use or ownership of any Proprietary Rights has been made, is
currently pending or, to the Seller's knowledge, is threatened. The Seller has
not received any notice of, nor is it aware of any fact which indicates a
likelihood of, any infringement or misappropriation by, or conflict with, any
third party with respect to any of the Proprietary Rights. To the best knowledge
of the Seller and the Shareholder, the Seller has not infringed, misappropriated
or otherwise conflicted with any rights of any third parties, nor is it aware of
any infringement, misappropriation or conflict which will occur as a result of
the continued operation of the Business as now conducted.
Section 3.19. Material Customers, Contracts and Commitments.
(a) Except to the extent set forth a Schedule 3.19, no one customer or group of
related customers of the Seller account for more than 5% of the Seller's
revenues. Except to the extent set forth on Schedule 3.19, (i) none of the
Seller's customers with revenues greater than 5% of the total revenues have
canceled or substantially reduced or, to the knowledge of the Shareholder or the
Seller are currently attempting or threatening to cancel or substantially reduce
service and (ii) the Seller has complied with all material commitments and
obligations pertaining to them, to the best of Seller's or the Shareholder's
knowledge respectively, and is not in default under any such contracts and
agreements and no notice of default has been received. Schedule 3.19 lists the
ten (10) largest customers (in terms of sales) of the Seller for the fiscal year
ended December 31, 1997 and the first quarter of 1998 the revenues received from
each such customer during fiscal 1997 and the first quarter of 1998.
(b) Except as disclosed in Schedule 3.19, the Seller is not
in, nor has the Seller given or received notice of, any material default or
claimed, purported or alleged material default, or facts that, with notice or
lapse of time, or both, would constitute a material default (or give rise to a
termination right) on the part of any party in the performance of any obligation
to be performed under any of its contracts with its customers.
(c) Seller has no written contracts with its customers.
Section 3.20. Accounts Receivable. Schedule 3.20 sets forth a
true and complete listing of all Accounts Receivable and an aging schedule
reflecting the aggregate amount of all Accounts Receivable outstanding at May
31, 1998 and at a date within 5 days of the date hereof (i) 30 days or less,
(ii) more than 30 days but less than or equal to 60 days, (iii) more than 60
days but less than or equal to 90 days and, (iv) more than 90 days. All of the
Accounts Receivable have arisen in the ordinary and regular course of business,
represent bona fide transactions with third parties and are not subject to any
material counterclaims or material offsets (except for those for which adequate
reserves have been established in accordance with GAAP), have been billed and
are collectible within 90 days of the date created.
Section 3.21. Books and Records. The books and records of the
Seller, including financial records and books of account, are complete and
accurate and have been maintained in accordance with GAAP, to the extent
applicable, and sound business practices.
Section 3.22. Brokers. No Person is or will be entitled to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the Seller or the Shareholder in connection with this Agreement or any of the
transactions contemplated hereby.
Section 3.23. Full Disclosure. No representation or warranty
made by the Shareholder or the Seller in this Agreement, any Schedule, any
Exhibit or any certificate delivered, or to be delivered, by or on behalf of the
Seller or the Shareholder pursuant hereto contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
There is no fact or circumstance that the Shareholder or the Seller has not
disclosed to the Purchaser and CDL in writing that the Shareholder or the Seller
presently believe has resulted in a Material Adverse Change or could reasonably
be expected to have a material adverse effect on the ability of the Seller or
the Shareholder to perform their obligations under this Agreement and the
instruments of transfer.
ARTICLE IV
Representations and Warranties of the Purchaser and CDL
The Purchaser and CDL represent and warrant to the Seller and
the Shareholder as follows:
Section 4.1. Organization. The Purchaser and CDL are each
corporations duly organized, validly existing and in good standing under the
laws of the State of New Jersey and Delaware, respectively and have full power
and authority, corporate and other, to own their respective property and assets
and to carry on their respective businesses as presently conducted except where
the failure to be so qualified would not have material adverse effect on their
respective businesses.
Section 4.2. Authorization. The Purchaser and CDL have full
power and authority, corporate and other, to execute and deliver this Agreement
and to perform their respective obligations hereunder, all of which have been
duly authorized by all requisite corporate action. This Agreement, has been or,
at the time of delivery will be, duly authorized, executed and delivered by the
Purchaser and CDL and constitute or, at the time of delivery will constitute, a
valid and binding agreement of the Purchaser and CDL, enforceable against the
Purchaser and CDL in accordance with its terms.
Section 4.3. Non-contravention. Neither the Purchaser nor CDL
is subject to any provision of their respective Certificates of Incorporation or
By-laws or any agreement, instrument, law, rule, regulation, order, decree or
judgment of any Governmental Authority or other restriction that would prevent
the consummation of the transactions contemplated by this Agreement.
Section 4.4. No Consents. No notice to, filing with, or
authorization, registration, consent or approval of any Governmental Authority
or other Person is necessary for the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby by the
Purchaser and CDL.
Section 4.5. SEC Documents. Seller and the Shareholder
acknowledge receipt of the SEC Documents. The SEC Documents adequately and
correctly describe the business of CDL as at their respective dates, and the
Seller may rely thereon. There has been no material change in the business or
financial condition of CDL since May 15, 1998. The SEC Documents do not contain
any untrue statement of a material fact nor omit to state a material fact
necessary to make the statements contained therein not misleading.
Section 4.6. Brokers. No person is or will be entitled to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the Purchaser or CDL in connection with this Agreement or any of the
transactions contemplated hereby.
ARTICLE V
Covenants and Agreements
Section 5.1. Closing Documents. The Shareholder and Seller
shall, prior to or on the Closing Date, execute and deliver, or cause to be
executed and delivered to the Purchaser and CDL, the documents or instruments
described in Section 6.2. The Purchaser and CDL shall, prior to or on the
Closing Date, execute and deliver, or cause to be executed and delivered, to the
Seller and the Shareholder, the documents or instruments described in Section
6.3.
Section 5.2. Transfer and Property Taxes. (a) The Seller shall
pay any transfer, sales, purchase, use or similar tax under the laws of any
Governmental Authority arising out of or resulting from the purchase of the
Purchased Assets. The Seller shall prepare and file the required tax returns and
other required documents with respect to the taxes and fees required to be paid
by the Seller pursuant to the preceding sentence and shall promptly provide the
Purchaser and CDL with evidence of the payment of such taxes and fees.
(b) The Shareholder or the Seller shall (i) prepare and file
all tax returns reporting the income attributable to the Purchased Assets or the
operation of the Business for all periods ending prior to or on the Closing
Date, (ii) prepare and file all income tax returns reporting the income of the
Seller arising on the Closing Date from the sale to the Purchaser and CDL of the
Purchased Assets, (iii) be responsible for the conduct of all tax examinations
relating to the tax returns referred to in (i) and (ii) above, and (iv) pay all
taxes attributable to the Purchased Assets or the operation of the Business due
with respect to the tax returns referred to in (i) and (ii) above. The Purchaser
and/or CDL shall prepare and file all tax returns reporting the income
attributable to the ownership of the Purchased Assets and the operation of the
Business for all periods beginning after the Closing and shall be liable for and
pay all taxes due in respect of such tax returns.
Section 5.3. Non-Competition and Confidentiality
Agreement. For a period of three (3) years after the Closing Date, the
Shareholder and the Seller will not directly or indirectly:
(i) engage in the small package delivery
business in competition with the Purchaser or CDL or any of
the subsidiaries of either thereof, in the State of
Massachusetts or within 250 miles of any border thereof (the
"Territory");
(ii) call upon any person who is, at that
time, an employee of the Purchaser or CDL (including the
subsidiaries of either thereof) in a managerial capacity for
the purpose or with the intent of enticing such employee away
from or out of the employ of the Purchaser or CDL;
(iii) call upon any person or entity (x)
which is, at that time, or which has been, within one (1) year
prior to that time, a customer of the Purchaser or CDL
(including the subsidiaries of either thereof) or (y) which
was a customer of the Seller in the 18 month period preceding
the Closing, for the purpose of soliciting or selling products
or services in direct competition with the Purchaser or CDL
anywhere in the United States; or
(iv) use for its own benefit or divulge or
convey to any third party, any Confidential Information (as
hereinafter defined) relating to the Business. For purposes of
this Agreement, Confidential Information consists of all
information, knowledge or data relating to the Business
including, without limitation, customer and supplier lists,
formulae, trade know-how, processes, secrets, consultant
contracts, pricing information, marketing plans, product
development plans, business acquisition plans and all other
information relating to the operation of the Business not in
the public domain or otherwise publicly available. Information
which enters the public domain or is publicly available loses
its confidential status hereunder so long as the Shareholder
or the Seller does not directly or indirectly cause such
information to enter the public domain.
Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit the Shareholder from acquiring, as an investment, not more
than one percent (1%) of the capital stock of a competing business whose stock
is traded on a national securities exchange or over-the-counter.
The Shareholder and the Seller acknowledge that the
restrictions contained in this Section 5.3 are reasonable and necessary to
protect the legitimate interests of the Purchaser and CDL and that any breach by
any of the Shareholder or the Seller of any provision hereof will result in
irreparable injury to the Purchaser and CDL. The Seller and the Shareholder
acknowledge that, in addition to all remedies available at law, the Purchaser
and CDL shall be entitled to equitable relief, including injunctive relief, and
an equitable accounting of all earnings, profits or other benefits arising from
such breach and shall be entitled to receive such other damages, direct or
consequential, as may be appropriate. Neither the Purchaser nor CDL shall be
required to post any bond or other security in connection with any proceeding to
enforce this Section 5.3.
It is specifically agreed that the three (3) year period
stated at the beginning of this Section 5.3, during which the agreements and
covenants of the Shareholder and the Seller shall be effective, shall be
computed by excluding from such period any time during which either the
Shareholder or the Seller is in violation of any provision of this Section 5.3.
All of the covenants on this section 5.3 shall be construed as
an agreement independent of any other provision in this Agreement, and the
existence of any claim of Seller or the Shareholder against Purchaser or CDL
shall not constitute a defense to the enforcement of such covenants.
Section 5.4. Best Efforts; Further Assurances. (a) Subject to
the terms and conditions herein provided, the Shareholder and the Seller shall
use their best efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement. Each of the Seller and the
Shareholder, will use their respective best efforts to obtain consents of all
Governmental Authorities and third parties necessary to the consummation of the
transactions contemplated by this Agreement. In the event that at any time after
Closing any further action is necessary to carry out the purposes of this
Agreement, the Seller and the Shareholder shall take all such action without any
further consideration therefor.
(b) The Seller and the Shareholder also shall take such
actions and deliver such documents as the Purchaser may reasonably request from
time to time to perfect the Purchaser's title and ability to use and dispose of
the Purchased Assets. In addition, the Seller and rhe Shareholder shall use
their best efforts to provide CDL with any financial or other information
required for SEC disclosure or other governmental compliance.
Section 5.5. Employment Matters. (a) Except as otherwise set
forth in (b) below, neither the Purchaser nor CDL or any of the subsidiaries of
either thereof will have any liability or responsibility as to any employee of
the Seller except as set forth below. Neither CDL nor the Purchaser shall have
any obligation to hire any employees of the Seller, but the Purchaser may offer
employment any employees of the Seller; provided, that the Seller shall
terminate such employees immediately prior to their employment by the Purchaser
and remain solely responsible for all amounts due to such employees through the
termination date unless such liabilities are set forth on Schedule 1.1AL.
(b) The Purchaser agrees that it will not terminate the
employment of any of the employees listed on Schedule 5.5 until the end of the
Second Measurement Period unless such termination is for Cause or with the
consent of the Shareholder. For purposes of this Agreement, Cause shall mean, to
the maximum extent permitted by law (a) commission of an act of dishonesty in
the performance of an employee's duties or engaging in conduct materially
detrimental to the business of the Purchaser or CDL or (b) conviction of a
felony or (c) willful misconduct resulting in a loss or damage to the Purchaser
or CDL.
Section 5.6. Compliance with the Securities Act.
(a) The Seller and the Shareholder acknowledge that the
Convertible Note and the Contingent Convertible Note to be delivered to the
Seller pursuant to this Agreement, and the CDL Common Stock which may be issued
upon conversion thereof, have not been and will not be registered under the 1933
Act and therefore may not be resold without compliance with the 1933 Act. The
Convertible Note, the Contingent Convertible Note and, if converted the CDL
Common Stock (the "Restricted Securities") are being acquired by the Seller and
the Shareholder solely for their own accounts, for investment purposes only, and
with no present intention of distributing, selling or otherwise disposing of it
in connection with the distribution of such shares, except that upon dissolution
the Seller may transfer the Restricted Securities to the Shareholder, subject to
compliance with applicable securities laws. The Seller and the Shareholder
covenant, warrant and represent that the Restricted Securities will not be
offered, sold, assigned, pledged, hypothecated, transferred or otherwise
disposed of except after full compliance with all of the applicable provisions
of the Act and the rules and regulations of the SEC. The note or certificates
representing the Restricted Securities shall bear the following legend:
The securities represented hereby were not issued in a
transaction registered under the Securities Act of 1933, as
amended ("Securities Act"), or any applicable state securities
laws and may not be sold, pledged, hypothecated, or otherwise
transferred unless such sale or transfer is covered by an
effective registration statement under the Securities Act and
applicable state securities laws or, in the opinion of counsel
to the holder and the issuer, is exempt from the registration
requirements of the Securities Act and such laws.
(b) Economic Risk; Sophistication. The Seller and the
Shareholder are able to bear the economic risk of an investment in the
Restricted Securities, can afford to sustain a total loss of such investment and
have such knowledge and experience in financial and business matters including
investments in unregistered securities, that they are capable of evaluating the
merits and risks of the proposed investment and/or the Shareholder has employed
a purchaser representative who is qualified by training and experience in
business and financial matters to evaluate the merits and risks of an investment
in CDL and therefore have the capacity to protect their own interests in
connection with their acquisition of the Restricted Securities.
(c) The Shareholder represents that he, or his purchaser
representative, has read and reviewed the information provided pursuant to this
Agreement and the other documentation and information furnished by CDL
(including CDL's Form 10-K for the year ended December 31, 1997, its Form 10-Q
for the quarter ended March 31, 1998, and its proxy statement for its annual
meeting to be held on June 6, 1998) (the "SEC Documents") and has had an
adequate opportunity to ask questions and receive answers from the officers of
CDL concerning, among other matters, CDL, its management, and its plans for the
operation of its business. CDL has provided to the Seller and Shareholder an
opportunity to obtain any and all additional information necessary for them to
verify the accuracy of the information provided herein or delivered pursuant
hereto.
(d) Seller and the Shareholder agree not to sell, pledge,
transfer or dispose of any of the shares of CDL Common Stock issued upon
conversion of the Convertible Note or the Contingent Convertible Note except
pursuant to an effective registration statement or in compliance with Rule 145
or in compliance with another exemption from the registration requirements of
the Securities Act.
Section 5.7. Audited Financial Statements of the Company; SEC
and Other Governmental Disclosure and Reporting Requirements. All fees and
expenses incurred in connection with any audits of the financial statements of
the Seller, including without limitation the audited financial statements of the
Company for the twelve months ended December 31, 1997 and the twelve months
ended December 31, 1996 shall be the sole responsibility of the Seller and the
Shareholder.
ARTICLE VI
Conditions to Closing
Section 6.1. Mutual Conditions. The respective obligations of
each party to consummate the transactions contemplated by this Agreement shall
be subject to the fulfillment at or prior to Closing of the condition that (A)
no Governmental Authority of competent jurisdiction shall have (i) enacted,
issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order which is in effect; or (ii)
commenced or threatened any action or proceeding, which in either case would
prohibit consummation of the transactions contemplated by this Agreement and (B)
no action or proceeding before a court or any other governmental agency or body
shall have been instituted or threatened to restrain or prohibit the
transactions, contemplated by this Agreement.
Section 6.2. Conditions to the Purchaser's and CDL's
Obligations. The obligations of the Purchaser and CDL to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
prior to or at Closing of each of the following conditions:
(a) All representations and warranties made by the Shareholder
and the Seller in this Agreement and the Schedules hereto shall be true, correct
and complete as of the Closing Date as though such representations and
warranties were made as of the Closing Date, and the Shareholder and the Seller
shall have duly performed or complied with all of the covenants, obligations and
conditions to be performed or complied with by them under the terms of this
Agreement on or prior to or at Closing.
(b) There shall have been no (i) Material Adverse Change, or
any development which could reasonably be expected to result in a prospective
Material Adverse Change, or (ii) material damage, destruction or loss to, or any
other material and adverse change in, the Purchased Assets or the Business,
regardless of insurance coverage.
(c) (i) All authorizations, consents, waivers, approvals or
other actions required in connection with the execution, delivery and
performance of this Agreement by the Shareholder and the Seller and the
consummation by the Shareholder and the Seller of the transactions contemplated
hereby shall have been obtained and shall be in full force and effect; (ii) the
Seller shall have obtained any authorizations, consents, waivers, approvals or
other actions required to prevent a material breach or default by the Seller
under any contract to which the Seller is a party or for the continuation of any
agreement to which the Seller is a party and which relates and is material to
the Purchased Assets or the Business and is being assumed by the Purchaser; and
(iii) all authorizations, consents, waivers, approvals or other actions
necessary to permit the Purchaser to operate the Business in compliance with all
applicable laws immediately after the Closing shall have been obtained and shall
be in full force and effect.
(d) Prior to or at Closing, the Shareholder or the Seller, as
the case may be, shall have delivered to the Purchaser and CDL all instruments
of assignment, transfer and conveyance identified herein and such other closing
documents as shall be reasonably requested by the Purchaser and CDL in form and
substance acceptable to the Purchaser's counsel, including the following:
(i) such instruments of sale, transfer, assignment,
conveyance and delivery (including all vehicle titles), in form and
substance reasonably satisfactory to counsel for the Purchaser
(including without limitation a Bill of Sale and an Assignment and
Assumption Agreement), as are required in order to transfer to the
Purchaser good and marketable title to the Purchased Assets, free and
clear of all Encumbrances;
(ii) a certificate of the Chairman, President or a
Vice President of the Shareholder and the Seller, dated the Closing
Date, to the effect that (1) the Person signing such certificate is
familiar with this Agreement and (2) the conditions specified in
Section 6.2(a), (b) and (c) have been satisfied;
(iii) a certificate of the Secretary or Assistant
Secretary of the Shareholder and the Seller, dated the Closing Date, as
to the incumbency of any officer of the Shareholder or the Seller
executing this Agreement or any document related thereto and covering
such other matters as the Purchaser and CDL may reasonably request;
(iv) a certified copy of (1) the Certificate of
Incorporation and By-laws of the
Seller and all amendments thereto, (2) a certificate, dated as of no
later than 10 days prior to the Closing Date, duly issued by the
Secretary of State of the States of New York and Delaware, showing the
Seller and the Shareholder each is in good standing and authorized to
do business in such jurisdiction, and (3) the resolutions of the
Seller's and the Shareholder's Boards of Directors authorizing the
execution, delivery and consummation of this Agreement, the instruments
of transfer and the transactions contemplated hereby;
(v) an opinion of Craig and Macauley, counsel to the
Shareholder and the Seller, dated the Closing Date, in form and
substance reasonably satisfactory to counsel for the Purchaser and CDL;
(vi) audited financial statements of the Seller as
contemplated by Section 5.7;
(vii) Assignments of Leases and Landlord consents and
Estoppel Certificates from each landlord for any lease being assigned
by Seller to Purchaser, all to Purchaser's reasonable satisfaction;
(viii) the Shareholder shall have entered into
an employment agreement on terms satisfactory to the Purchaser; and
(ix) such other documents or instruments as the
Purchaser and CDL reasonably request to effect the transactions
contemplated hereby.
(e) all actions, proceedings, instruments and documents
required to carry out this Agreement or incidental hereto and all other related
legal matters shall have been approved by counsel to the Purchaser and CDL.
Section 6.3. Conditions to the Shareholder's and the Seller's
Obligations. The obligations of the Shareholder and the Seller to consummate the
transactions contemplated by this Agreement shall be subject to the fulfillment
at or prior to the Closing of each of the following conditions:
(a) All representations and warranties made by the Purchaser
and CDL in this Agreement shall be true and correct in all material respects as
of the Closing Date, and the Purchaser and CDL shall have duly performed or
complied in all material respects with all of the covenants, obligations and
conditions to be performed or complied with by them under the terms of this
Agreement on or prior to or at Closing.
(b) All authorizations or approvals required in connection
with the execution, delivery and performance of this Agreement, by the Purchaser
and CDL and the consummation by the Purchaser and CDL of the transactions
contemplated hereby shall have been obtained and shall be in full force and
effect.
(c) Prior to or at Closing, the Purchaser and CDL shall have
delivered to the Shareholder and the Seller such closing documents as shall be
reasonably requested by the Shareholder and the Seller in form and substance
reasonably acceptable to the Shareholder's counsel, including the following:
(i) the Assignment and Assumption Agreement
executed by the Purchaser and dated the Closing Date;
(ii) certificates of the President or a Vice
President of the Purchaser and of CDL respectively, dated the Closing
Date, to the effect that (1) the Person signing such certificate is
familiar with this Agreement and (2) the conditions specified in
Section 6.3(a) and (b) have been satisfied;
(iii) certificates of the Secretary or Assistant
Secretary of the Purchaser and CDL, respectively dated the Closing
Date, as to the incumbency of any officer of the Purchaser and CDL
executing this Agreement, or any document related thereto and covering
such other matters as the Seller may reasonably request;
(iv) a certified copy of (1) the Certificate of
Incorporation and By-laws of the Purchaser and all amendments thereto
and (2) the resolutions of the Purchaser's Board of Directors and CDL's
Board of Directors authorizing the execution, delivery and consummation
of this Agreement and the transactions contemplated hereby;
(v) an opinion of Lowenstein Sandler PC, counsel to
the Purchaser and CDL, dated the Closing Date, in form and substance
reasonably satisfactory to counsel for the Shareholder and the Seller;
and
(vi) payment of the Purchase Price as set forth in
Section 2.2.
ARTICLE VII
Survival of Representations and Warranties; Indemnification
Section 7.1. Survival of Representations and Warranties.
Except as set forth below, the representations and warranties provided for in
this Agreement shall survive the Closing for two (2) years from the Closing Date
for the benefit of the parties hereto and their successors and assigns. The
representations and warranties provided for in Sections 3.13 and 3.15 shall
survive the Closing and remain in full force and effect for six (6) years. The
survival period of each representation or warranty as provided in this Section
7.1 is hereinafter referred to as the "Survival Period." No claim shall be
brought hereunder unless the aggregate claims exceed $5,000.
Section 7.2. Indemnification. (a) The Shareholder and the
Seller jointly and severally shall indemnify, defend and hold harmless the
Purchaser and CDL or any of their respective Affiliates, officers, directors,
employees, agents and representatives, and any Person claiming by or through any
of them, against and in respect of any and all claims, costs, expenses, damages,
liabilities, losses or deficiencies (including, without limitation, counsel's
fees and other costs and expenses incident to any suit, action or proceeding)
(the "Damages") arising out of, resulting from or incurred in connection with
(i) any inaccuracy in any representation or the breach of any warranty made by
the Seller or the Shareholder in this Agreement for the applicable Survival
Period, (ii) the breach by the Shareholder or the Seller of any covenant or
agreement to be performed by them hereunder, and (iii) any Excluded Liability.
Seller agrees to pay or otherwise satisfy all of its obligations and liabilities
in the ordinary course of business.
(b) The Purchaser and CDL shall indemnify, defend and hold
harmless the Shareholder and the Seller or any of their respective affiliates,
officer, directors, employees, agents and representatives and any Person
claiming by or through either of them, against and in respect of any and all
damages arising out of, resulting from or incurred in connection with (i) any
inaccuracy in any representation or the breach of any warranty made by the
Purchaser and CDL in this Agreement for the applicable Survival Period, (ii) the
breach by the Purchaser or CDL of any covenant or agreement to be performed by
them hereunder, and (iii) any Assumed Liability.
(c) Any Person providing indemnification pursuant to the
provisions of this Section 7.2 is hereinafter referred to as an "Indemnifying
Party" and any Person entitled to be indemnified pursuant to the provisions of
this Section 7.2 is hereinafter referred to as an "Indemnified Party."
Section 7.3. Procedures for Third Party Claims. In the case of
any claim for indemnification arising from a claim of a third party (a "Third
Party Claim"), an Indemnified Party shall give prompt written notice to the
Indemnifying Party of any claim or demand which such Indemnified Party has
knowledge and as to which it may request indemnification hereunder. The
Indemnifying Party shall have the right to defend and to direct the defense
against any such Third Party Claim, in its name or in the name of the
Indemnified Party, as the case may be, at the expense of the Indemnifying Party,
and with counsel selected by the Indemnifying Party unless (i) such Third Party
Claim seeks an order, injunction or other equitable relief against the
Indemnified Party, or (ii) the Indemnified Party shall have reasonably concluded
that (x) there is a conflict of interest between the Indemnified Party and the
Indemnifying Party in the conduct of the defense of such Third Party Claim or
(y) the Indemnified Party has one or more defenses not available to the
Indemnifying Party. Notwithstanding anything in this Agreement to the contrary,
the Indemnified Party shall, at the expense of the Indemnifying Party, cooperate
with the Indemnifying Party, and keep the Indemnifying Party fully informed, in
the defense of such Third Party Claim. The Indemnified Party shall have the
right to participate in the defense of any Third Party Claim with counsel
employed at its own expense; provided, however, that, in the case of any Third
Party Claim or demand described in clause (i) or (ii) of the second preceding
sentence or as to which the Indemnifying Party shall not in fact have employed
counsel to assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party.
The Indemnifying Party shall have no indemnification obligations with respect to
any such Third Party Claim or demand which shall be settled by the Indemnified
Party without the prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld or delayed.
Section 7.4. Procedures for Inter-Party Claims. In the event
that an Indemnified Party determines that it has a claim for Damages against an
Indemnifying Party hereunder (other than as a result of a Third Party Claim),
the Indemnified Party shall give prompt written notice thereof to the
Indemnifying Party, specifying the amount of such claim and any relevant facts
and circumstances relating thereto. The Indemnified Party shall provide the
Indemnifying Party with reasonable access to its books and records for the
purpose of allowing the Indemnifying Party a reasonable opportunity to verify
any such claim for Damages. The Indemnified Party and the Indemnifying Party
shall negotiate in good faith regarding the resolution of any disputed claims
for Damages. Promptly following the final determination of the amount of any
Damages claimed by the Indemnified Party, the Indemnifying Party shall pay such
Damages to the Indemnified Party by wire transfer or check made payable to the
order of the Indemnified Party, without interest. In the event that the
Indemnified Party is required to institute legal proceedings in order to recover
Damages hereunder, the cost of such proceedings (including costs of
investigation and reasonable attorneys' fees and disbursements) shall be added
to the amount of Damages payable to the Indemnified Party.
ARTICLE VIII
Miscellaneous
Section 8.1. Notices. All notices or other communications
required or permitted hereunder shall be in writing and shall be delivered
personally, by facsimile or sent by certified, registered or express air mail,
postage prepaid, and shall be deemed given when so delivered personally, or by
facsimile, or if mailed, five days after the date of mailing, as follows:
If to the Purchaser or CDL: 380 Allwood Road
Clifton, New Jersey 07012
Telephone: (201) 471-1005
Facsimile: (201) 471-5519
Attention: Mark Carlesimo, Esq.
With a copy to: Lowenstein Sandler PC
65 Livingston Avenue
Roseland, New Jersey 07068
Telephone: (201) 992-8700
Facsimile: (201) 992-5820
Attention: Alan Wovsaniker, Esq.
If to the Seller or the Shareholder :
Metro Courier Network
175 Bay Street Drive
Braintree, MA 02184
Telephone: (617)
Facsimile: (617)
Attention: Mr. Dennis Roccaforte
With a copy to: Craig and MaCauley
600 Atlantic Avenue
Boston, MA 02210
Telephone: (617) 367-9500
Facsimile: (617) 742-1766
Attention: John Snyder, Esq.
Section 8.2. Expenses. Regardless of whether the transactions
provided for in this Agreement are consummated, except as otherwise provided
herein, each party hereto shall pay its own expenses incident to this Agreement
and the transactions contemplated herein.
Section 8.3. Governing Law; Consent to Jurisdiction This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New Jersey, without reference to the choice of law
principles thereof. Each of the parties hereto irrevocably submits to the
non-exclusive jurisdiction of the courts of the State of New Jersey and the
United States District Court for the District of New Jersey for the purpose of
any suit, action, proceeding or judgment relating to or arising out of this
Agreement and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same methods as are specified for the giving
of notices under this Agreement. Each of the parties hereto irrevocably consents
to the jurisdiction of any such court in any such suit, action or proceeding and
to the laying of venue in such court. Each party hereto irrevocably waives any
objection to the laying of venue of any such suit, action or proceeding brought
in such courts and irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Section 8.4. Assignment; Successors and Assigns; No Third
Party Rights. Except as otherwise provided herein, this Agreement may not be
assigned by operation of law or otherwise, and any attempted assignment shall be
null and void. The Purchaser and CDL may assign all of their rights under this
Agreement to any Affiliate; provided such Affiliate assumes all of the
obligations of the Purchaser and CDL remains liable hereunder. No such
assignment shall relieve Purchaser or CDL of their obligations hereunder. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and legal representatives. This
Agreement shall be for the sole benefit of the parties to this Agreement and
their respective successors, assigns and legal representatives and is not
intended, nor shall be construed, to give any Person, other than the parties
hereto and their respective successors, assigns and legal representatives, any
legal or equitable right, remedy or claim hereunder.
Section 8.5. Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an original agreement,
but all of which together shall constitute one and the same instrument.
Section 8.6. Titles and Headings. The headings and table of
contents in this Agreement are for reference purposes only, and shall not in any
way affect the meaning or interpretation of this Agreement.
Section 8.7. Entire Agreement. This Agreement, including the
Schedules and Exhibits attached thereto, constitutes the entire agreement among
the parties with respect to the matters covered hereby and supersedes all
previous written, oral or implied understandings among them with respect to such
matters.
Section 8.8. Amendment and Modification. This Agreement may
only be amended or modified in writing signed by the party against whom
enforcement of such amendment or modification is sought.
Section 8.9. Public Announcement. Except as may be required by
law, neither the Seller, on the one hand, or the Purchaser, on the other hand,
shall issue any press release or otherwise publicly disclose this Agreement or
the transactions contemplated hereby or any dealings between or among the
parties in connection with the subject matter hereof without the prior approval
of the other. In the event that any such press release or other public
disclosure shall be required, the party required to issue such release or other
disclosure shall consult in good faith with the other party hereto with respect
to the form and substance of such release or other disclosure prior to the
public dissemination thereof.
Section 8.10. Waiver. Any of the terms or conditions of this
Agreement may be waived at any time by the party or parties entitled to the
benefit thereof, but only by a writing signed by the party or parties waiving
such terms or conditions.
Section 8.11. Severability. The invalidity of any portion
hereof shall not affect the validity, force or effect of the remaining portions
hereof. If it is ever held that any restriction hereunder is too broad to permit
enforcement of such restriction to its fullest extent, such restriction shall be
enforced to the maximum extent permitted by law.
Section 8.12. No Strict Construction. Each of the Purchaser,
CDL, the Seller and the Shareholder acknowledge that this Agreement has been
prepared jointly by the parties hereto, and shall not be strictly construed
against any party.
Section 8.13. Risk of Loss. Prior to the Closing, the risk of
loss with respect to the Purchased Assets shall remain with the Seller. In the
event of any material casualty, in addition to any other rights the Purchaser
may have hereunder, the Purchaser shall have the right to terminate this
Agreement upon giving written notice of its election to terminate to the Seller.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CONSOLIDATED DELIVERY &
LOGISTICS, INC.
By: /S/ Albert W. Van Ness, Jr.
Name: Albert W. Van Ness, Jr.,
Title: Chairman
CLICK MESSENGER SERVICE, INC.
By: /S/ Mark Carlesimo
Name: Mark Carlesimo
Title: Vice President
METRO COURIER NETWORK, INC.
By: /S/ Dennis Roccaforte
Name: Dennis Roccaforte
Title: President
/S/ Dennis Roccaforte
Dennis Roccaforte
Exhibit 10.2
This Note has been, and any shares issued upon conversion
pursuant to the terms hereof ("Underlying Shares") will be,
acquired for investment and not with a view to, or for sale in
connection with, any distribution thereof within the meaning
of the Securities Act of 1933, as amended ("Act"). This Note,
and any securities issued upon conversion pursuant to this
Note, have not been registered under the Securities Act of
1933, or any state securities law, and may be offered and sold
only if registered pursuant to the provisions of that Act or
those laws or if an exemption from registration is available.
Notwithstanding any other provisions contained herein, no
transfer of this security, the Underlying Shares, or of any
interest in either thereof shall be made unless the conditions
specified in Article Four hereof have been fulfilled.
TRANSFER IS ALSO RESTRICTED BY SECTION 6.04.
7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
OF CONSOLIDATED DELIVERY & LOGISTICS, INC.
Registered Holder: Metro Courier Network, Inc.
July 2, 1998
Address: 175 Bay State Drive No. N-1
Braintree, MA 02184
Principal Amount: $1,750,000 Clifton, New Jersey
Due: July 2, 2001
FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"), hereby promises to pay
to the holder above named (herein called the "Holder"), or its order or its
registered assign(s), the principal sum above stated on July 2, 2001 and to pay
interest thereon at the rate of seven percent (7%) per annum from the date
hereof. Interest shall be computed on the balance of principal outstanding from
time to time, and payable quarterly, beginning on October 1, 1998.
Both principal hereof and interest thereon are payable in
lawful money of the United States of America at the Holder's address above or
such other address as the Holder shall designate in writing delivered to the
Company from time to time. Prior to any sale or other disposition of this Note,
the Holder will endorse hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.
PREPAYMENT
The Company may prepay this debt, in whole or in part, without
premium or penalty at any time on and after the "Trigger Date" (as defined
below) and from time to time thereafter in its discretion; provided that it
gives the Holder ten (10) days advance written notice of its intent to prepay;
during which period the Holder may exercise its conversion rights.
ARTICLE ONE
SUBORDINATION
Anything contained herein to the contrary notwithstanding, the
indebtedness evidenced by this Note shall be fully subordinate and junior in
right of payment, to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including, without limitation, all indebtedness due
to First Union Commercial Corporation or its affiliates, or any other bank or
similar financial institution (hereinafter a "bank"), direct or indirect,
absolute or contingent, due or to become due, whether now outstanding or
hereafter created, and any and all renewals of the foregoing by operation of law
or otherwise. Such indebtedness of the Company to which the indebtedness
evidenced by this Note and the interest thereon is subordinate and junior being
sometimes hereinafter referred to as "Senior Debt" and also includes without
limitation all debt or financing from time to time arranged by First Union
Commercial Corporation or its affiliates.
(i) In the event of any insolvency or
bankruptcy proceedings, and any receivership, liquidation,
reorganization or other similar proceedings in connection
therewith, relative to the Company or to its creditors, as
such, or to its property, and in the event of any proceedings
for voluntary liquidation, dissolution or other winding up of
the Company, whether or not involving insolvency or
bankruptcy, and in the event of any execution sale, then the
holders of Senior Debt shall be entitled to receive payment in
full of all principal of, and premium on and interest on all
Senior Debt (including any such interest which may accrue
after the commencement of any such proceedings) before the
Holder of this Note is entitled to receive any further payment
on account of principal of or premium, if any, on this Note,
and to that end the holders of Senior Debt shall be entitled
to receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash or
property or securities, which may be payable or deliverable in
any such proceedings in respect to this Note except with
respect to interest payments.
(ii) The Company shall not be required to
make, directly or indirectly, and the Holder shall not be
entitled to accept, receive (directly or indirectly) or
retain, any payment or prepayment of principal or premium
hereunder if and so long as a payment default under the terms
of any Senior Debt shall have occurred and shall be
continuing.
(iii) In the event that this Note is
declared due and payable before its expressed maturity because
of the occurrence of a default hereunder (under circumstances
when the provisions of clause (i) above shall not be
applicable), and within 90 days of such declaration, the
holders of the Senior Debt accelerate the indebtedness
evidenced by such Senior Debt, the holders of all Senior Debt
shall be entitled to receive payment in full of all principal
and interest on all Senior Debt (including any such interest
which may accrue after the commencement of any proceedings
referred to in clause (i) above) before the Holder of this
Note shall receive any further payment on account of the
principal of or premium, if any, on this Note.
Unless an event described in (i), (ii) or (iii) above shall
occur, principal of and accrued interest on this Note shall be payable as
provided on the first page; and in the event the payment is suspended as
provided in (i), (ii) or (iii) above, any amount previously received by the
Holder hereof prior to the effective date of such event and payable to the
Holder in accordance with the terms hereof shall be and remain the property of
the Holder, the subordination provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).
In case cash, securities or other property otherwise payable
or deliverable to the Holder of this Note shall have been applied pursuant to
the provisions of this Note to the payment of Senior Debt in full, then and in
each such case, the holder or holders of the Senior Debt at the time any
payments or distributions are received by such holder(s) of Senior Debt in
excess of the amount sufficient to pay all Senior Debt in full, (a) shall pay
over such excess to the Holder of this Note and (b) the Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full. Senior Debt shall not be considered to be paid in
full unless and until all of the obligations which constitute a part of Senior
Debt have been paid in full.
In furtherance of such subordination, the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable authority, after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand, collect, file proofs
of claim with respect to, receive and take any and all proceedings for the
recovery of any and all monies due or to become due on account of this Note.
No present or future holder of Senior Debt shall be prejudiced
in his right to enforce subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative rights of the holder(s) of Senior Debt
on the one hand and the Holder of this Note on the other hand, and nothing
herein shall impair as between the Company and the Holder of this Note, the
obligation of the Company, which is unconditional and absolute, to pay to the
Holder hereof the principal hereof and premium, if any, and interest hereon in
accordance with its terms, nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the occurrence of a default hereunder or, in connection therewith,
from exercising all remedies otherwise permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property otherwise payable or deliverable to the Holder of
this Note.
In furtherance of this Subordination the Holder(s) agree to
execute and deliver any and all documents requested by the Company for delivery
to its creditors (in the form as requested by such creditors) in order to
implement or verify this Subordination.
ARTICLE TWO
EVENTS OF DEFAULT
If any of the following events of default (each, an "Event of
Default") shall occur, the Holder hereof, at its option, may declare all sums of
principal and accrued interest then remaining unpaid hereon and all other
amounts payable hereunder immediately due and payable.
2.01 Events of Default
For purposes of this instrument, an Event of Default will be
deemed to have occurred if:
(a) the Company shall fail to pay any
installment of principal or interest on this Note and such
non-payment shall continue for a period of fifteen (15) days
from the date due; or
(b) a receiver, liquidator or trustee of the
Company or of any property of the Company, shall be appointed
by court order; or the Company shall be adjudged bankrupt or
insolvent; or any of the property of the Company shall be
sequestered by court order; or a petition to reorganize the
Company under any bankruptcy, reorganization or insolvency law
shall be filed against the Company and shall not be dismissed
within 60 days after such filing; or
(c) the Company shall file a petition in
voluntary bankruptcy or requesting reorganization under any
provision of any bankruptcy, reorganization or insolvency law
or shall consent to the filing of any petition against it
under any such law; or
(d) the Company shall make a formal or
informal assignment for the benefit of its creditors or admit
in writing its inability to pay its debts generally when they
become due or shall consent to the appointment of a receiver,
trustee or liquidator of the Company or of all or any part of
the property of the Company.
2.02 Remedies on Default
If an Event of Default shall have occurred, in addition to its
rights and remedies under this Note, and any other instruments, the Holder may
at its option by written notice to the Company declare all indebtedness to
Holder hereunder to be due and payable, whereupon the same shall forthwith
mature and become due and payable together with interest accrued thereon,
without any further notice to and without presentment, demand, protest or notice
of protest, all of which are hereby waived. In addition, after an Event of
Default, interest shall be payable hereunder at the rate of eleven percent (11%)
per annum.
Subject to the rights of holders of Senior Debt, the Holder
may proceed to protect and enforce its rights by suit in equity, action at law
or other appropriate proceedings, including, without limitation, action for the
specific performance of any agreement contained herein or in any other
instrument, or for an injunction against a violation of any of the terms hereof
or thereof, or in aid of the exercise of any right, power or remedy granted
hereby or by law, equity or otherwise.
ARTICLE THREE
CONVERSION PRIVILEGE/OBLIGATION
The Company hereby grants to the Holder of this Convertible
Note the right to convert this Note into fully paid and non-assessable shares of
the Company's Common Stock, $.001 par value (the "Common Stock"), at the
"Conversion Price" per share. The "Conversion Price" is defined as Seven Dollars
and 00/100 ($7.00). The right to convert may be exercised by the Holder at any
time after the date hereof up to and including, July 1, 2001, except as provided
herein. The number of shares of Common Stock into which this Note may be
converted shall be determined by taking (a) the sum of (1) the full principal
amount of this Note, namely $1,750,000, and (2) any interest due and unpaid from
the date of issue to the date of purchase, and dividing said sum by (b) the
Conversion Price, which Conversion Price is subject to adjustment as provided in
Section 3.06 below. The right to convert may only be exercised with respect to
the entire amount due on the Note at the exercise date. The amount and kind of
securities purchasable pursuant to the rights granted hereby and the purchase
price for such securities are subject to adjustment as provided hereunder.
The Company also shall have the right to convert this Note
into fully paid and non-assessable shares of Common Stock at any time after the
Trigger Date at the Conversion Price per share, in accordance with the formula
provided above, but only if a registration statement required under Article Five
is then effective. The Company also may only convert with respect to the entire
amount set forth above.
For purposes of this Note, the "Trigger Date" shall mean the
first business day after the date on which the average closing sales price as
reported by the National Association of Securities Dealers over a 90 calendar
day period (which 90 day period begins after the date hereof) equals or exceeds
the Conversion Price.
3.01 Whole Shares. Upon conversion, only whole shares
shall be issued. Any remainder due hereunder which is insufficient to purchase a
whole share of Common Stock shall be paid by the Company in cash.
3.02 Exercise Procedure.
(a) The Conversion privilege shall be deemed to have been
exercised (the "Exercise Time") when either (x) the Company shall have received
from the Holder all of the following:
(i) a properly completed Exercise
Agreement in form annexed hereto executed by the person exercising such
conversion privilege; and
(ii) this Note; and
(iii) if this Note shall not be registered
in the name of the person exercising such conversion
privilege, an assignment or assignments as described in
Section 3.04 hereof evidencing an assignment of such Note to
the person exercising the same, in which case the Holder shall
comply with Article Four hereof and submit proof, including
opinions of Holder's counsel, that the assignment and exercise
comply with all federal and state securities laws.
or (y) the Company shall have delivered to the Holder its notice of exercise in
writing. Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company. Exercise of the Company's conversion privilege shall be
effective notwithstanding any failure or delay of the Holder on delivering the
Note to the Company, and no interest shall accrue hereunder after the Company
sends Holder its notice of exercise of the conversion privilege.
(b) Certificates for the underlying shares acquired shall be
delivered to the Holder within 20 days after the Exercise Time (or the date of
delivery of the Note to the Company, if later).
3.03 Exercise Agreement. The Exercise Agreement shall be in
the form set forth at the end of this Note. If the Conversion Shares are not to
be issued in the name of the persons to whom the Note is registered, such
Agreement shall also state the name of the persons to whom the certificates for
the Conversion Shares are to be issued. Such Exercise Agreement shall be dated
the actual date of execution thereof.
3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall provide that the person executing the same
thereby sells, assigns and transfers to the person(s) named therein the rights
evidenced by this Note to purchase the number of the underlying shares stated
therein. Such Assignment shall be dated the actual date of execution thereof.
The Assignee shall be required to provide the Company with proof of compliance
with all applicable federal and state securities laws.
3.05 Authorization and Issuance of Conversion Shares. The
Company covenants and agrees that:
(a) The Underlying Shares issuable upon any exercise of the
conversion privilege shall be deemed to have been issued to the person
exercising such privilege at the Exercise Time, and the person exercising such
privilege shall be deemed for all purposes to have become the record holder of
such Underlying Shares at the Exercise Time.
(b) All Underlying Shares which may be issued upon any whole
or partial exercise will, upon issuance, be fully paid and non-assessable and
free from all taxes, liens and charges with respect to the issue thereof.
(c) The Company will take all such action as may be necessary
and reasonably within its powers to assure that all underlying shares issuable
upon exercise may be issued without violation of any applicable law or
regulation. The Company will not take any action which would result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the conversion privilege in full, together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of Common Shares then authorized by the Company's
Certificate of Incorporation.
(d) The issuance of certificates for the Underlying Shares
upon exercise of the conversion privilege shall be made without charge to the
registered Holder(s) thereof for any issuance tax in respect thereof or other
costs incurred by the Company in connection with the exercise and the related
issuance of the underlying shares.
3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:
(a) Whenever after the date hereof the Company shall (i)
declare and pay a dividend to the holders of its shares of common stock in
shares of its common stock, or in other securities immediately convertible into
shares of common stock, (ii) split the outstanding shares of its common stock
into a greater number of outstanding shares of common stock, or (iii) combine
the outstanding shares of its common stock into a smaller number of outstanding
shares of common stock, the maximum number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire
initial indebtedness represented hereby that number of shares of common stock
which he would have held had the entire initial indebtedness of this Note been
converted immediately prior to the effective date of such action and had that
action been effectuated with respect to those converted shares. In any such
event the Conversion Price will be altered accordingly so that any conversion
taking place after any event described in (i), (ii), and/or (iii) above may be
accomplished at the same cost that would have obtained had the shares been
converted immediately prior to such action. For purposes of this subparagraph
(a), the effective date for any stock dividend referred to in clause (i) above
shall be deemed to be the record date fixed for the determination of the holders
of common stock entitled to receive such dividend.
(b) In the case after the date hereof of any capital
reorganization or any reclassification of the capital stock of the Company or in
case of the consolidation of the Company with or merger of the Company into
another corporation or the conveyance of all or substantially all of the
properties and assets of the Company to another corporation, adequate provision
shall be made whereby this Note shall thereafter be convertible into the number
of shares of stock or other securities or property to which a holder of the
number of shares of common stock of the Company deliverable upon conversion of
this Note immediately prior to such reorganization, reclassification,
consolidation, merger or conveyance would have been entitled upon consummation
of such reorganization, reclassification, consolidation, merger or conveyance;
and, in any such case, appropriate adjustment (as determined by the board of
directors) shall be made in the application of the provisions herein set forth
with respect to the rights and interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, to the shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.
ARTICLE FOUR
RESTRICTIONS ON TRANSFER
The Holder, by acceptance hereof, acknowledges that it
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the Underlying Shares, if any, without registration
under the Act, the New Jersey Uniform Securities Law, or any other state
securities law.
Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this offering is being made pursuant to the exemption from
registration with the Securities and Exchange Commission ("SEC") afforded by
Sections 3(b) and/or 4(2) of the Act relating to transactions by an issuer not
involving any public offering. The Holder understands that the Company has no
present intention, and is under no obligation to, register the Note or the
Underlying Shares under the Act, or any applicable state law, except as set
forth in Article Five hereof.
The Holder understands that due to lack of registration, the
Note and the Underlying Shares will be restricted securities, that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are registered under the Act and any applicable state securities
law, or an exemption from such laws is available and the Company is supplied
with an opinion of counsel to the Holder, satisfactory to the Company, that
registration is not required under any of such laws, and in the opinion of
counsel for the Company, such sale, transfer, or pledge will not cause the
Company to fail to be in compliance with the exemption provisions under which
the Note or the Underlying Shares were issued.
The Holder has such knowledge and experience in financial and
business affairs that it is capable of evaluating the merits and risks of the
prospective investment.
The Holder is able to bear the economic risk of this
investment. An investment in the Note and the Underlying Shares is suitable for
the Holder in light of its financial position and investment objectives, with
full knowledge that this investment could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received thereon. The Holder can
afford a total loss of this investment.
The Note is being, and the Underlying Shares will be,
purchased for the Holder's own account for investment purposes and not with a
view to the resale or distribution thereof by the Holder.
Prior to the date hereof, the Holder has had ample opportunity
to ask questions of and receive answers from the officers and directors of the
Company, concerning the Company, the Note, and the Company's business and to
obtain any additional information which was considered necessary to verify the
information supplied by those individuals.
The Holder understands that a restrictive legend in
substantially the following form shall be placed on the certificate(s)
representing the Underlying Shares:
"The shares represented by this certificate have not
been registered under the Securities Act of 1933, as amended
("Act"). Such shares have been acquired for investment and may
not be publicly offered or sold in the absence of (1) an
effective registration statement for such shares under the
Act; (2) opinions of counsel to the Company and to the holder
hereof and presented to the Company prior to any proposed
transfer to the effect that registration is not required under
the Act; or (3) a letter presented to the Company, prior to
any proposed transfer, from the staff of the Securities and
Exchange Commission, to the effect that it will not take any
enforcement action if the proposed transfer is made without
registration under the Act."
Except as set forth in the documents which the Holder has
reviewed, no representations or warranties have been made to the Holder by the
Company. In entering into this transaction, the Holder is not relying upon any
information, other than the results of its own independent investigation.
ARTICLE FIVE
REGISTRATION RIGHTS
The Company agrees to file a registration statement on Form
S-3 with the Securities and Exchange Commission ("Commission") under the
Securities Act covering the shares of Common Stock into which this Note may be
converted (i.e., the Underlying Shares) with thirty (30) days after the date
hereof; and use its best efforts to cause such registration statement to become
effective as soon as possible thereafter. The Company shall not be obligated to
cause to become effective more than one registration statement with respect to
the Underlying Shares. If for any reason, the registration statement does not
become effective on or before the Trigger Date, then the Holder shall have the
option to reduce the Conversion Price to the closing sales price as reported by
the NASD on the date that the registration statement does become effective.
At any time and from time to time, the Holder agrees without
further consideration, to take such actions and to execute and deliver such
documents as may be reasonably requested by the Company in order to effectuate
the purposes of this Article Five including, without limitation, supplying
information with respect to the Holder that may be necessary or required for
inclusion in the registration statement. In the event that such information or
other material requested by the Company is not provided to the Company within a
reasonable period of time following delivery of written notice requesting such
information, then the Company's obligations under this Article Five shall be
suspended as to such Holder.
The Company will pay all expenses incurred in complying with
Article Five hereof, including, without limitation, all registration and filing
fees (including all expenses incident to filing with the National Association of
Securities Dealers, Inc.), reasonable fees and disbursements of counsel to the
Company, securities law and blue sky fees and expenses (except where such
payment is prohibited by law or applicable regulation). All underwriting
discounts and selling commissions applicable to the sales of the Underlying
Shares and any state or federal transfer taxes payable with respect to the sales
of the Underlying Shares and all fees and disbursements of counsel for the
Holder, if any, in each case arising in connection with registration of the
Underlying Shares under Article Five hereof, shall be payable by the Holder.
ARTICLE SIX
MISCELLANEOUS
6.01 Failure or Delay Not Waiver. No failure or delay on the
part of the Holder hereof in the exercise of any power, right, or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.
6.02 Notices. Any notice herein required or permitted to be
given shall be given by federal express or similar overnight courier or by same
day courier service or by certified mail, return receipt requested, if to the
Holder, at the address set forth on the first page hereof, or,
If to the Company:
Consolidated Delivery & Logistics, Inc., 380 Allwood Road, Clifton, New Jersey
07012, Attn: General Counsel.
6.03 Amendments. The term "Note" or "this Note" and all
reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.
6.04 Assignability. This Note shall be binding upon the
Company, its successors and assigns, and shall inure to the benefit of Holder,
its successors and assigns. This Note may not be transferred or assigned prior
to July 2, 2000. This is the Convertible Note issued pursuant to an Asset
Purchase Agreement dated this date among the Company, the Holder and others.
6.05 Governing Law. This Note has been executed in and
shall be governed by the laws of the State of New Jersey.
6.06 No Personal Liability. No officer, director,
shareholder, employee, consultant or agent of the Company shall be personally
liable for repayment of this Note.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed in its name by its duly authorized officer and its corporate seal to be
affixed hereto.
CONSOLIDATED DELIVERY & LOGISTICS, INC.
By: \S\ Albert W. Van Ness, Jr.
Albert W. Van Ness, Jr., Chairman
The undersigned hereby guarantees payment of the obligations of the Company
hereunder.
CLICK MESSENGER SERVICE, INC.
By: \S\ Mark Carlesimo
Mark Carlesimo, Vice President
ASSIGNMENT
FOR VALUE RECEIVED ______________________________________
___________________________________________________________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Note, with respect to the conversion thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:
Name of Address Address No. of Shares
Date:
Signature:___________________
Witness:_____________________
EXERCISE AGREEMENT
Date:__________
The undersigned, pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the Company's Common Stock as provided in the Note, and
makes payment in full therefore by conversion and application to the extent
necessary to pay the Conversion Price for such shares of all or each part of the
principal amount of the Note and interest due thereon as shall be necessary as
provided in the Note. The undersigned hereby represents and warrants that the
shares of Common Stock to be acquired upon exercise are being acquired for its
own account, without any present intention of reoffering, reselling or
distributing such Common Stock, except to the extent permitted under the
Securities Act of 1933, as amended.
Signature_____________________
Address_______________________
_______________________