Exhibit 10.25
Execution Copy
RESTRUCTURING AND EXCHANGE AGREEMENT
This RESTRUCTURING AND EXCHANGE AGREEMENT, dated as of April
14, 2004 (this "Agreement"), is made among CD&L, Inc., a Delaware corporation
("CDL" or the "Company"), BNP Paribas (successor in interest to Paribas Capital
Funding LLC), Exeter Venture Lenders L.P. and Exeter Capital Partners IV, L.P.
(collectively, the "Lenders"), and those individuals listed on Schedule I
annexed hereto (collectively, the "Investors").
Background: CDL is presently indebted to the Lenders in the
sum of $11.0 million pursuant to the Company's Senior Subordinated Promissory
Notes (the "Notes") issued pursuant to a Senior Subordinated Loan Agreement
among CDL and the Lenders dated as of January 29, 1999, as amended (the "Loan
Agreement"). Such Notes are due and payable in January 2006. The Investors have
indicated a willingness to purchase certain of the Notes from the Lenders, and
to invest additional funds in CDL. However, the Investors are only willing to
make such investment, and CDL is only willing to accept the investment, if the
Lenders first agree to restructure the terms of the Notes. After extensive
negotiations, the Investors, the Lenders and CDL have agreed to a financial
restructuring of CDL which will include a number of transactions, as follows:
(a) The Lenders will exchange Notes in the aggregate principal
amount of $4.0 million for shares of the Series A Convertible Redeemable
Preferred Stock of CDL, par value $.001 per share ("Preferred Stock") with a
liquidation preference of $4.0 million, and otherwise on the terms set forth in
the form of Certificate of Designations, Preferences and Rights of Series A
Convertible Redeemable Preferred Stock of CD&L, Inc. attached as Exhibit A
hereto (the "Certificate of Designation");
(b) The Lenders will amend the terms of the $7.0 million
balance of the Notes, and then exchange the original Notes for the amended and
restated notes, which will consist of two series of convertible notes, the
Series A Convertible Subordinated Debentures the "Series A Convertible Notes")
in the principal amount of $3.0 million and the Series B Convertible
Subordinated Debentures ("Series B Convertible Notes") in the principal amount
of $4.0 million (collectively, the "Convertible Notes"). The Loan Agreement will
be amended and restated to reflect the terms of the substituted Series A
Convertible Notes and the Series B Convertible Notes. The terms of the two
series of Convertible Notes will be identical except for the conversion rate, as
further provided below and in the Amended and Restated Senior Subordinated Loan
Agreement among CDL and various lenders signatories thereto dated as of the date
hereof pursuant to which the Convertible Notes will be issued (the "Amended Loan
Agreement");
(c) The Investors will purchase the Series A Convertible Notes
from the Lenders for a purchase price of $3.0 million;
(d) CDL will issue an additional $1.0 million of Series A
Convertible Notes to the Investors for an additional payment of $1.0 million
pursuant to the Amended Loan Agreement, the proceeds of which shall be used in
part to pay interest due as of the date hereof on the Notes;
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(e) The Investors, the Lenders and CDL will enter into a
Stockholders Agreement dated the date hereof (the "Stockholders Agreement") to
reflect certain agreements between them with respect to CDL;
(f) The Investors, the Lenders and CDL will enter into a
Registration Rights Agreement dated as of the date hereof (the "Registration
Rights Agreement") pursuant to which the shares of CDL common stock issuable
upon conversion of the Preferred Stock and the Convertible Notes will be
registered for resale with the Securities and Exchange Commission;
(collectively, the foregoing transactions are referred to as the "Transaction".
This Agreement, the Stockholders Agreement, the Registration Rights Agreement,
the Amended Loan Agreement, the Convertible Notes and the Certificate of
Designation for the Preferred Stock are collectively referred to as the
"Transaction Documents".)
A committee of the independent directors of CDL has been
advised by the Financial Advisor (as defined below) that the Transaction is fair
to stockholders of CDL from a financial point of view. Consummation of the
Transaction is subject to a number of conditions, including, but not limited to,
receipt hereafter of written confirmation of such advice from the Financial
Advisor.
As a result of the Transaction, the Lenders will hereafter own
all of the Series A Preferred Stock and all of the Series B Convertible Notes.
The Investors will own all of the Series A Convertible Notes.
Now, therefore, in consideration of the foregoing and the
representations, warranties and conditions set forth below, the parties hereto,
intending to be legally bound, hereby agree as follows:
1. The Preferred Stock.
(a) Issuance. At the Closing, CDL agrees to issue and
sell to the Lenders, in the amounts indicated on Schedule I, and the Lenders
agree to purchase from CDL, an aggregate number of shares of CDL's Preferred
Stock with a liquidation preference of $4.0 million. The terms of the Preferred
Stock shall be as set forth in the Certificate of Designation, which will be
modified as follows:
(i) The conversion price of the Preferred
Stock (the "Conversion Price") shall be market value, defined as the average of
the closing prices of the Company's Common Stock on the American Stock Exchange
for each of the last five (5) trading days ending on and including the last
trading day immediately prior to the Closing Date;
(ii) After the Conversion Price is
determined, the issue price (the "Issue Price") will be fixed at ten (10) times
the Conversion Price, and the number of Preferred Shares to be issued will be
fixed at the quotient of $4.0 million divided by the Issue Price; and
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(iii) The Certificate of Designation will
be filed as provided in Section 8(e) hereof.
(b) Purchase Price. In consideration for the issuance
of the Preferred Shares, the Lenders shall deliver to CDL, in exchange and for
cancellation and discharge, Notes in the aggregate principal amount of $4.0
million.
(c) Delivery. The exchange of the Notes for the
Preferred Shares shall take place at a Closing (the "Closing") to be held on the
date hereof or at such other time and place as CDL, the Investors and the
Lenders may mutually determine (the "Closing Date") after satisfaction of all
conditions described in Sections 7, 8 and 9 below. As per paragraph (a) above,
while the Note will be delivered to CDL at the Closing, the Preferred Shares
will be delivered to the Lenders promptly after the Certificate of Designation
is filed.
2. The Convertible Notes.
(a) Creation of Series A Convertible Notes and Series
B Convertible Notes. At the Closing, CDL and the Lenders agree to restate the
terms of Notes with a principal balance of $7.0 million into (i) Series A
Convertible Notes in the principal amount of $3.0 million in the form of Exhibit
B annexed hereto, with each Lender to receive the principal amount of Series A
Convertible Notes set forth opposite such Lender's name on Schedule I annexed
hereto; and (ii) Series B Convertible Notes in the principal amount of $4.0
million in the form of Exhibit C hereto, with each Lender to receive the
principal amount of Series B Convertible Notes set forth opposite such Lender's
name on Schedule I hereto. The conversion price of the Series A Notes shall be
the Conversion Price. The conversion price of the Series B Notes shall be twice
(2x) the Conversion Price.
(b) At the Closing, the Lenders shall deliver the
original Notes to CDL, and the Lenders shall receive the Convertible Notes in
the denominations provided above in exchange and substitution and replacement
therefor.
(c) Investor Purchase. At the Closing, CDL agrees to
issue and sell to the Investors, and the Investors agree to purchase Series A
Convertible Notes in the principal amount of $1.0 million, with each Investor to
purchase that principal amount of Series A Convertible Notes set forth opposite
such Investor's name on Schedule I hereto.
(d) Purchase from Lenders. At the Closing, the
Investors agree to purchase from the Lenders, and the Lenders agree to sell to
the Investors, all of their Series A Convertible Notes in the aggregate
principal amount of $3.0 million, with each Lender to sell, and each Investor to
purchase, the amount of Series A Convertible Notes set forth opposite such
Lender's and Investors name on Schedule I hereto. Delivery of the Series A Notes
to the Investors shall be made within ten days after the Closing, with the
appropriate Closing Price inserted into each Convertible Note.
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(e) Use of Proceeds. The proceeds of the sale and
issuance of the $1.0 million Series A Convertible Notes shall be used by CDL
first to pay all interest due to date under the Notes and, thereafter, for
general corporate purposes.
(f) Payments. CDL will make all cash payments due
under the Series A Convertible Notes and the Series B Convertible Notes in
immediately available funds on the date such payments are due in the manner and
at the address for such purpose specified in the Amended Loan Agreement.
3. Closing Deliveries.
(a) At the Closing, the Lenders shall deliver to CDL and the
Investors:
(i) (to CDL only): the Notes duly endorsed for
cancellation;
(ii) an executed counterpart to this Agreement signed
by a duly authorized officer of each Lender;
(iii) an executed counterpart to the Registration
Rights Agreement signed by a duly authorized officer or officers, as
the case may be, of each Lender;
(iv) an executed counterpart to the Stockholders
Agreement signed by a duly authorized officer or officers, as the case
may be, of each Lender;
(v) an executed counterpart to the Amended Loan
Agreement signed by a duly authorized officer or officers, as the case
may be, of each Lender;
(vi) (to the Investors only): the Series A
Convertible Notes in the principal amount of $3.0 million duly endorsed
for transfer; and
(vii) such other documents as shall be reasonably
requested by CDL or the Investors.
(b) At the Closing, the Investors shall deliver to CDL and
Lenders:
(i) (to the Lenders only): $3 million by wire
transfer of immediately available funds to an account or accounts
designated in writing by the Lenders, as further indicated on Schedule
I;
(ii) (to CDL only): $1 million by wire transfer of
immediately available funds to an account designated in writing by CDL;
(iii) an executed counterpart to this Agreement
signed by each Investor;
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(iv) an executed counterpart to the Registration
Rights Agreement signed by each Investor;
(v) an executed counterpart to the Stockholders
Agreement signed by each Investor;
(vi) an executed counterpart to the Amended Loan
Agreement signed by each Investor;
(vii) (to CDL only): the Series A Convertible Notes
received from the Lenders duly endorsed for transfer; and
(viii) such other documents as shall be reasonably
requested by the Lenders and CDL.
(c) At the Closing, CDL shall deliver to the Lenders and the
Investors:
(i) (to the Lenders only, and as soon as practical
after the Closing and the filing of the Certificate of Designation):
certificates representing the Preferred Shares;
(ii) (to the Lenders only, and as soon as practical
after the Closing and the determination of the Conversion Price):
Series A Notes in the principal amount of $3 million;
(iii) (to the Lenders only, and as soon as practical
after the Closing and the determination of the Conversion Price):
Series B Notes in the principal amount of $4 million;
(iv) (to the Investors only, and as soon as practical
after the Closing and the determination of the Conversion Price):
Series A Notes in the principal amount of $1 million;
(v) (to the Investors only upon delivery by the
Investors to CDL of the duly endorsed Series A Convertible Notes
originally delivered to the Lenders pursuant to clause (ii) above):
replacement Series A Convertible Notes issued to the Investors;
(vi) an executed counterpart to this Agreement signed
by a duly authorized officer of CDL;
(vii) an executed counterpart to the Registration
Rights Agreement signed by a duly authorized officer of CDL;
(viii) an executed counterpart of the Stockholders
Agreement signed by a duly authorized officer of CDL;
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(ix) an executed counterpart to the Amended Loan
Agreement signed by a duly authorized officer of CDL; and
(x) such other documents as shall be reasonably
requested by the Lenders or the Investors.
4. Representations and Warranties of CDL. CDL represents and
warrants to the Investors and the Lenders as follows:
4.1 Corporate Organization. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, and has all requisite corporate power and authority to own, operate
and lease its properties and to carry on its business as and in the places where
such properties are now owned, operated and leased or such business is now being
conducted.
4.2 Capitalization. The authorized capital of the Company
consists of 2,000,000 shares of preferred stock, par value $0.001 per share (the
"Preferred Stock"), and 30,000,000 shares of common stock, par value $0.001 per
share (the "Common Stock"). Immediately prior to the execution of this
Agreement, 7,658,660 shares of Common Stock and no shares of Preferred Stock
were issued and outstanding.
4.3 Authorization. The Company has the necessary corporate
power and authority to enter into the Transaction Documents and to assume and
perform its obligations thereunder. The execution and delivery of the
Transaction Documents and the performance by the Company of its obligations
hereunder and thereunder have been duly authorized by the Board of Directors of
the Company. The Transaction Documents have been duly executed and delivered by
the Company and constitute a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with their respective terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
4.4 Approvals and Consents. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary or required as to the Company in
order to constitute the Transaction Documents as valid, binding and enforceable
obligations of the Company in accordance with their respective terms.
4.5 No Conflicts. The execution, delivery and performance of
the Transaction Documents by the Company, compliance by the Company with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or constitute a
material breach of any of the terms or provisions of, or a default under, the
certificate of incorporation or by laws of the Company, (ii) result in a
violation or breach of, conflict with, constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation, payment or acceleration) under, or result in the creation of any
lien on any of the properties or assets of the Company or any of its
subsidiaries under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, guarantee, license, franchise, permit, agreement,
understanding, arrangement, contract, commitment, lease, franchise agreement or
other instrument or obligation (whether oral or written) or (iii) violate or
conflict in any material respect with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Company or its property.
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4.6 American Stock Exchange. The Company has received
assurances that the American Stock Exchange ("Amex") will not require approval
by the stockholders of CDL for the transactions contemplated by this Agreement
and that the consummation of the transactions contemplated by this Agreement and
the other Transaction Documents is in compliance with the listing requirements
of Amex.
5. Representations and Warranties of the Lenders. Each Lender
represents and warrants to the Company and the Investors severally and not
jointly as follows:
5.1 Organization and Existence. Each Lender is a limited
partnership or limited liability company duly organized and validly existing
under the laws of its jurisdiction of organization.
5.2 Authorization. The execution, delivery and performance by
each Lender of the Transaction Documents to which it is a party and the
consummation by the Lender of the transactions contemplated hereby and thereby
are within the powers of the Lender and have been duly authorized by all
necessary action (corporate or other) on the part of the Lender. Each of the
Transaction Documents to which each Lender is a party has been duly executed and
delivered by the Lender and constitutes a legal, valid and binding obligation of
the Lender enforceable against the Lender in accordance with their respective
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
5.3 Approvals and Consents. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary or required as to each Lender in
order to constitute the Transaction Documents as a valid, binding and
enforceable obligation of the Lender in accordance with their respective terms.
5.4 No Conflicts. The execution, delivery and performance of
the other Transaction Documents by the Lender, compliance by the Lender with all
provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not (i) conflict with or constitute a
material breach of any of the terms or provisions of, or a default under, the
certificate of incorporation or by laws, limited partnership agreement,
operating agreement or other organizational documents of the Lender, or (ii)
violate or conflict in any material respect with any applicable law or any rule,
regulation, judgment, order or decree of any court or any governmental body or
agency having jurisdiction over the Lender or its property.
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5.5 Investment. Each Lender is acquiring the Preferred Shares
and Convertible Notes being purchased by it for its own account as principal,
not as a nominee or agent, for investment purposes only, and not with a view to,
or for, resale, distribution or fractionalization thereof in whole or in part.
No Lender has entered into any contract, undertaking, agreement or arrangement
with any person to sell, transfer or pledge to such person or anyone else the
Note being purchased by it, and no Lender has any present plans or intentions to
enter into any such contract, undertaking, agreement or arrangement.
5.6 Exemption From Registration. Each Lender acknowledges that
the offer and sale of the Preferred Shares and the Convertible Notes is intended
to be exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), by virtue of Section 4(2) of the Securities Act and the
provisions of Regulation D promulgated thereunder ("Regulation D"). In
furtherance thereof, each Lender represents and warrants to the Company as
follows:
(i) Each Lender has the financial ability to bear
the economic risk of its investment, has adequate means for providing for its
current needs and contingencies and has no need for liquidity with respect to
its investment in the Company; and
(ii) Each Lender has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Preferred Stock and the Convertible Notes.
5.7 Accredited Investor. Each Lender is an
"accredited investor," as that term is defined in Rule 501 of Regulation D.
5.8 Available Information. Each Lender:
(i) Has been furnished with any and all documents
that may have been made available by the Company upon request of the Lender for
a reasonable time prior to the date hereof;
(ii) Has been provided an opportunity for a
reasonable time prior to the date hereof to obtain additional information
concerning the Company and all other information to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense;
(iii) Has been given the opportunity for a
reasonable time prior to the date hereof to ask questions of, and receive
answers from, the Company or its representatives concerning the terms and
conditions of this investment in the Preferred Shares and the Convertible Notes;
and
(iv) Has determined that the Preferred Shares and
the Convertible Notes are a suitable investment for the Lender.
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5.9 Transfer Restrictions. The Lender will not sell or
otherwise transfer the Preferred Shares and the Convertible Notes without
registration under the Securities Act or unless the Lender provides the Company
with an opinion of counsel to the effect that a sale, transfer or assignment of
the Preferred Shares or the Convertible Notes may be made without registration.
5.10 Legend. The Lender understands and acknowledges that the
Preferred Shares and the Convertible Notes shall bear a legend substantially as
follows until (i) such securities shall have been registered under the
Securities Act and effectively been disposed of in accordance with an effective
registration statement thereunder; or (ii) in the opinion of counsel for the
Company such securities may be sold without registration under the Securities
Act as well as any applicable "Blue Sky" or state securities laws:
"The [shares] [securities] represented by this [certificate]
[note] have not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and such [shares] [securities]
may not be offered, sold, pledged or otherwise transferred except
(1) pursuant to an exemption from, or in a transaction not subject
to, the registration requirements under the Securities Act or (2)
pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable
securities laws of any State of the United States."
6. Representations and Warranties of the Investors. Each
Investor represents and warrants to the Company and the Lenders severally and
not jointly as follows:
6.1 Organization and Existence. Each Investor is a
natural person.
6.2 Authorization. Each of the Transaction Documents to which
the Investor is a party has been duly executed and delivered by the Investor and
constitutes a legal, valid and binding obligation of the Investor enforceable
against the Investor in accordance with their respective terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
6.3 Approvals and Consents. No action, approval, consent or
authorization, including, but not limited to, any action, approval, consent or
authorization by any governmental or quasi-governmental agency, commission,
board, bureau, or instrumentality is necessary or required as to the Investor in
order to constitute the Transaction Documents as a valid, binding and
enforceable obligation of the Investor in accordance with their respective
terms.
6.4 No Conflicts. The execution, delivery and performance of
the Transaction Documents by each Investor, compliance by each Investor, with
all provisions hereof and thereof and the consummation of the transactions
contemplated hereby and thereby will not violate or conflict in any material
respect with any applicable law or any rule, regulation, judgment, order or
decree of any court or any governmental body or agency having jurisdiction over
the Investor.
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6.5 Investment. Each Investor is acquiring the Convertible
Notes being purchased by it for its own account as principal, not as a nominee
or agent, for investment purposes only, and not with a view to, or for, resale,
distribution or fractionalization thereof in whole or in part. No Investor has
entered into any contract, undertaking, agreement or arrangement with any person
to sell, transfer or pledge to such person or anyone else the Convertible Notes
being purchased by it, and no Investor has any present plans or intentions to
enter into any such contract, undertaking, agreement or arrangement.
6.6 Exemption From Registration. Each Investor acknowledges
that the offer and sale of the Convertible Notes is intended to be exempt from
registration under the Securities Act, by virtue of Section 4(2) of the
Securities Act and the provisions of Regulation D promulgated thereunder. In
furtherance thereof, the Investor represents and warrants to the Company as
follows:
(i) The Investor has the financial ability to bear
the economic risk of its investment, has adequate means for providing for its
current needs and contingencies and has no need for liquidity with respect to
its investment in the Company; and
(ii) The Investor has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the Convertible Notes.
6.7 Accredited Investor. Each Investor is an "accredited
investor," as that term is defined in Rule 501 of Regulation D.
6.8 Available Information. Each Investor:
(i) Has been furnished with any and all documents
that may have been made available by the Company upon request of the Investor
for a reasonable time prior to the date hereof;
(ii) Has been provided an opportunity for a
reasonable time prior to the date hereof to obtain additional information
concerning the Company and all other information to the extent the Company
possesses such information or can acquire it without unreasonable effort or
expense;
(iii) Has been given the opportunity for a
reasonable time prior to the date hereof to ask questions of, and receive
answers from, the Company or its representatives concerning the terms and
conditions of this investment in the Convertible Notes; and
(iv) Has determined that the Convertible Notes are a
suitable investment for the Investor.
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6.9 Transfer Restrictions. Each Investor will not sell or
otherwise transfer the Convertible Notes without registration under the
Securities Act or unless the Investor provides the Company with an opinion of
counsel to the effect that a sale, transfer or assignment of the Convertible
Notes may be made without registration. The Investor fully understands and
agrees that the Investor must bear the economic risk of the Investor's purchase
because, among other reasons, the Convertible Notes have not been registered
under the Securities Act or under the securities laws of any state and,
therefore, cannot be resold, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Securities Act and under the
applicable securities laws of such states, or unless exemptions from such
registration requirements are available.
6.10 Legend. Each Investor understands and acknowledges that
the Convertible Notes shall bear a legend substantially as follows until (i)
such securities shall have been registered under the Securities Act and
effectively been disposed of in accordance with an effective registration
statement thereunder; or (ii) in the opinion of counsel for the Company such
securities may be sold without registration under the Securities Act as well as
any applicable "Blue Sky" or state securities laws:
"The [shares] [securities] represented by this [certificate]
[note] have not been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and such [shares] [securities]
may not be offered, sold, pledged or otherwise transferred except
(1) pursuant to an exemption from, or in a transaction not subject
to, the registration requirements under the Securities Act or (2)
pursuant to an effective registration statement under the
Securities Act, in each case in accordance with any applicable
securities laws of any State of the United States."
7. Mutual Conditions to Closing. The obligations of all of the
parties to close is subject to the following mutual conditions:
(a) Representations. All the representations and warranties of
the other parties contained in this Agreement shall be true and correct in all
material respects on the Closing Date with the same force and effect as if made
on and as of the Closing Date.
(b) Conditions Precedent. All of the conditions precedent to
the issuance of the Convertible Notes and Preferred Shares set forth in the
Agreement shall have been complied with except for the determination of the
Conversion Price and the number of Preferred Shares to be issued.
(c) Deliveries. All deliveries of the other parties
pursuant to Section 3 shall have been received.
(d) Performance. None of the other parties shall have failed
on or prior to the Closing Date to perform or comply in any material respect
with any of the agreements herein contained and required to be performed or
complied with on or prior to the Closing Date.
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(e) Waivers. All key employees (meaning ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇,
▇▇., ▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
(the "Management Investors") either shall have waived any "change of control"
provisions in their employment agreements resulting from the issuance of the
Convertible Notes and/or any conversion of the Convertible Notes (but not
arising from acquisition of control by an unrelated third party (i.e. an entity
not party to this Agreement or an affiliate of such party) or from automatic
conversion of the Convertible Notes thereafter, or shall have executed new
employment agreements (consistent with Section 9(a) below) extending their term
of employment and containing such waiver or providing that no change in control
benefit is payable under those circumstances.
(f) Amex. The listing application for the common shares
underlying the Preferred Stock and the Convertible Notes shall have been
accepted by Amex for listing, and the Company shall have received assurances,
reasonably satisfactory to it that Amex will not require approval by the
stockholders of CDL for the transactions contemplated by this Agreement.
8. Additional Conditions to Obligations of Company. The
Company's obligations to consummate the Transactions at the Closing is subject
to the fulfillment on or prior to the Closing Date, of the following additional
conditions, any of which may be waived in whole or in part by the Company:
(a) Fairness Opinion. ▇▇▇▇ ▇▇▇▇ & Co. (the "Financial
Adviser") shall have delivered to the committee of independent directors of the
Company (the "Committee") an opinion in form reasonably satisfactory to such
Committee to the effect that the transactions contemplated hereby are fair from
a financial point of view to stockholders of the Company.
(b) Legal Opinion. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
("Special Counsel") shall have delivered to the Committee its opinion, in form
acceptable to the Committee, that the Transaction Documents as a whole are
consistent with the Term Sheet, in all material respects.
(c) Rights Offering. Documents necessary to commence the
rights offering described in Section 10 below shall have been prepared and be in
form and substance ready for filing with the SEC and satisfactory to the
Committee.
(d) Bank Consent. The Company shall have received all
necessary approvals from Fleet Bank, N.A.
(e) Certificate of Designation. The Certificate of Designation
shall have been filed with the Secretary of State of the State of Delaware.
9. Additional Conditions to Closing of Investors. The
Investors' obligation at the Closing is subject to the fulfillment, on or prior
to the Closing Date, of the following condition, which may be waived in whole or
in part by the Investors:
(a) Employment Contracts. The Management Investors shall have
received extensions of their employment contracts with CDL to December 31, 2008.
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10. Rights Offering Covenant. CDL will commence a rights
offering to its common stockholders (and to all those who have securities
convertible into common stock other than the holders of the Preferred Stock and
the Convertible Notes in their capacity as such) as soon as practical after the
consummation of the Transaction, and in any event within nine (9) months of the
Closing Date, whereby the common stockholders of CDL shall have the right to
acquire at least $2 million of additional shares of common stock of CDL in the
aggregate at a price equal to the Conversion Price. If the rights offering is
oversubscribed,
(a) first, any Investors and Lenders who subscribe shall cut
back on their subscriptions to permit other CDL stockholders to participate
fully; and
(b) if the rights offering is still oversubscribed after the
cutback, CDL shall have the option to increase the size of the rights offering
to up to $4 million.
In connection with a rights offering by the Company to be
consummated by the nine (9) month anniversary of the date hereof, Lenders waive
the following rights with respect to their outstanding warrants to purchase an
aggregate of 506,250 shares of Common Stock of the Company, pursuant to the
Warrant Agreement dated as of January 29, 1999 (the "Warrant") to (1) receive
notices concerning the rights offering, (2) any adjustment in the exercise price
or number of shares issuable upon exercise of the Warrant as a result of the
rights offering or any of the transactions contemplated by the Transaction
Documents or (3) any payment to which the Lenders would otherwise be entitled
under Section 10 of the Warrant.
11. General Provisions.
(a) Entire Agreement; Amendment and Waiver. This Agreement and
the other Transaction Documents constitute the entire agreement between the
parties hereto with respect to the subject matter contained herein and supersede
all prior oral or written agreements, if any, between the parties hereto with
respect to such subject matter and, except as otherwise expressly provided
herein, are not intended to confer upon any other person any rights or remedies
hereunder. Any amendments hereto or modifications hereof must be made in writing
and executed by each of the parties hereto. Any failure by the Company, the
Investors or the Lenders to enforce any rights hereunder shall not be deemed a
waiver of such rights unless waived in writing by the Company, the Investors or
the Lenders, as the case may be. The representations and warranties set forth in
this Agreement shall survive the Closing.
(b) Successors and Assigns. Subject to the restrictions on
transfer described in the Stockholders Agreement, the rights and obligations of
the Company, the Lenders and the Investors shall be binding upon and benefit the
successors, assigns, heirs, administrators and transferees of the parties.
(c) Notices. All notices, requests, demands, consents,
instructions or other communications required or permitted hereunder shall be in
writing and faxed, mailed or delivered to each party as follows: (i) if to an
Investor or Lender, at the Investor's or the Lender's address or facsimile
number set forth in Schedule I attached hereto, or at such other address as
Investor or Lender shall have furnished Company in writing, or (ii) if to
Company, at CD&L, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
facsimile number (▇▇▇) ▇▇▇-▇▇▇▇, or at such other address or facsimile number as
Company shall have furnished to Investor in writing. All such notices and
communications shall be deemed to be duly given, if contained in a written
instrument, (i) delivered by hand in person, (ii) two (2) days following deposit
with a nationally reorganized overnight courier service, (iii) by electronic
facsimile transmission (with a copy sent by first class mail, postage prepaid),
or (iv) five (5) days following deposit in the mail, if sent by registered or
certified mail, return receipt requested, postage prepaid, and addressed as
aforesaid.
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(d) Severability; Governing Law. If any provisions of this
Agreement shall be determined to be illegal or unenforceable by any court of
law, the remaining provisions shall be severable and enforceable in accordance
with their terms. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
EXECUTED AND TO BE PERFORMED SOLELY WITHIN SUCH STATE.
(e) Headings. The headings or captions contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
(f) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.
(g) Further Assurances. The Company, the Investors and the
Lenders agree to execute and deliver such instruments and take such actions as
the other parties may, from time to time, reasonably request in order to
effectuate the purpose and to carry out the terms of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first set forth above.
CD&L, Inc.
By:____________________________________
Name:
Title: Chief Executive Officer
BNP PARIBAS
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
EXETER VENTURE LENDERS, L.P.
By: Exeter Venture Advisors, Inc. its
General Partner
By:____________________________________
Name:
Title:
EXETER CAPITAL PARTNERS IV, L.P.
By: Exeter IV Advisors, L.P., its General Partner
By: Exeter IV Advisors, Inc., its General Partner
By:___________________________________
Name:
Title:
[Investor Signatures follow}
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