Exhibit 10.29
Execution Copy
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this "Agreement"), is dated as of April
14, 2004, and entered into by and among CD&L, Inc., a Delaware corporation
("CDL" or the "Company"), the investors listed on Schedule A hereto
(collectively the "Investors" and individually an "Investor"), and the Company's
lenders (collectively the "Lenders") who appear on Schedule B hereto (the
Investors and the Lenders hereinafter collectively referred to herein as the
"Stockholders" or individually as a "Stockholder").
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").
The Investors have indicated a willingness to purchase certain of the Notes from
the Lenders, and to invest additional funds in CDL. After extensive
negotiations, the Investors, the Lenders and CDL have agreed to a financial
restructuring of CDL pursuant to the terms of a Restructuring Exchange Agreement
(the "Exchange Agreement") dated as of this date. Unless otherwise provided in
this Agreement, capitalized terms used herein but not otherwise defined shall
have the meanings set forth in the Exchange Agreement.
As a result of the transactions described in the Exchange Agreement
(collectively, the "Transaction"), the Lenders and the Investors will hold a
significant stake in the equity of CDL, both as a result of their ownership of
the Convertible Notes and, in the case of the Lenders, the Preferred Stock
acquired in the Transaction and from prior holdings of common stock, stock
purchase warrants and stock options.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.0 Election of Directors
1.1 Election of Directors. (a) At each annual meeting of the
stockholders of the Company, or at each special meeting of the stockholders of
the Company involving the election of directors of the Company (the
"Directors"), and at any other time at which stockholders of the Company will
have the right to or will vote for or render consent in writing regarding the
election of Directors, then and in each event, each Stockholder hereby covenants
and agrees to vote all shares of voting capital stock of the Company presently
owned or hereafter acquired by such Stockholder (whether owned of record or over
which such Stockholder exercises voting control), to the extent their shares may
be voted on the following matters, in favor of the following actions:
(i) To fix and maintain the number of Directors at eleven (11); and
(ii) To cause and maintain the election to the Board of Directors of
the Company (the "Board") of (i) three (3) representatives designated by the
Investors, one of whom will be the Chairman of the Board of the Company
(individually, an "Investor Director" and collectively the "Investor
Directors"), who shall initially be Xxxxxx X. Xxx Xxxx, Xx., Xxxxxxx X. Xxxxxxx
and Xxxxxxx Xxxxxx, and (ii) two (2) representatives designated by the Lenders
as per their rights as holders of the Preferred Stock of the Company
(individually a "Lender Director" and collectively the "Lender Directors").
(b) Notwithstanding Section 1.1(a) above, if (x) any principal payment
is made with respect to the Series A Convertible Notes of the Company held by
the Investors, and if the Preferred Stock has not been converted or redeemed
prior to April 14, 2011 (the seventh annual anniversary of the Closing Date), or
(y) any of the actions referenced in Section 5.2 hereof are taken while the
requisite number of Preferred Shares is outstanding without any required prior
written consent of the holders of a majority of the outstanding shares of
Preferred Shares, then upon occurrence of the events described in clause (y)
above or at the later of (i) the date of such principal payment to the Investors
or (ii) April 14, 2011, the Investors shall nominate and vote all of their
shares of voting stock for three (3) designees of the Lenders to the Board of
Directors in lieu of the three (3) Investor Directors selected pursuant to
Section 1.1(a)(i)..
1.2 Each of the parties hereto shall vote or cause to be voted all
shares owned by them or over which they have voting control (i) not to cast any
vote for any Person not nominated in accordance with the procedure set forth in
Section 1.1 above, (ii) to vote and do all things necessary under applicable law
to remove any Director upon the request or approval of the party which has
nominated such Director, and (iii) to fill any vacancy in the membership of the
Board with a designee of the party whose designee's resignation or removal from
the Board caused such vacancy. Unless otherwise removed in accordance with this
Section 1.2, the Investor Directors and the Lender Directors shall hold office
until their respective successors shall have been duly appointed.
1.3 The Company shall provide to each party entitled to designate or
elect Directors hereunder prior written notice of any intended mailing of notice
to the Company's Stockholders for a meeting at which Directors are to be
elected. Any party entitled to designate or elect Directors pursuant to this
Agreement shall notify the Company in writing, prior to such mailing, of the
person(s) designated, or elected, by it or them as its or their nominee(s) for
election or electee(s) as Director(s).
1.4 The Investor Directors shall be designated by holders of a majority
of the Common Stock owned by the Investors, including for this purpose shares of
Common Stock issuable upon conversion of the Series A Convertible Notes by the
Investors.
1.5 So long as the holders of Preferred Stock shall have a right to do
so pursuant to Section 5(b) of the Certificate of Designation establishing the
Preferred Stock, the holders of Preferred Stock, voting as a separate class,
shall elect the Lender Directors.
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1.6 No party to this Agreement shall interfere with or attempt to
influence the independent judgment of the Nominating Committee of CDL's Board of
Directors with respect to the selection of nominees for the other six seats on
the Board of Directors.
2.0 Right of Co-Sale
2.1 If any Investor proposes to voluntarily or involuntarily, directly
or indirectly, sell, assign, donate, pledge, hypothecate, purchase any right or
option with respect to, encumber or grant a security interest in, or in any
other manner, transfer, in whole or in part Preferred Stock, or Convertible
Notes (collectively, the "Securities") or any other right or interest therein,
or enter into any transaction or series of related transactions from the date
hereof involving the sale of Securities representing on a fully diluted,
as-converted basis more than 50% of the Investors' fully diluted Common Stock
holdings of CDL's Common Stock, which results in the economic equivalent of a
transfer to any Person (each such action, a "Transfer") (each such Person, a
"Transferee"), such Investor shall first promptly give written notice to each
Lender at least twenty (20) days prior to the closing of such Transfer, in the
manner described in Section 7.8 of this Agreement (the "Transfer Notice") to
allow each Lender to participate in the sale on the same terms and conditions as
such Investor.
(a) The Transfer Notice shall (i) describe in reasonable detail the
proposed Transfer including, without limitation, the class and number of shares
of Securities to be sold, the number of shares of Common Stock represented
thereby, the identity of the prospective Transferee(s), the purchase price of
each such share of Securities to be sold and the date such proposed sale is
expected to be consummated, and (ii) have attached thereto an executed copy of
the agreement pursuant to which the proposed Transfer is to be consummated. To
the extent any prospective Transferee refuses to purchase Securities from a
Lender exercising its rights of co-sale hereunder, the Investor shall not sell
to such prospective Transferee any Securities unless and until, simultaneously
with such sale, the Investor shall purchase the offered Securities or other
securities from the Lender.
(b) Each of the Lenders shall have the right, exercisable upon delivery
of an irrevocable written notice to the Investors within ten (10) days after
receipt of the Transfer Notice (the "Response Deadline"), to participate in such
proposed Transfer on the same terms and conditions as set forth in the Transfer
Notice; provided that, (i) without limiting its obligations with respect to
granting of indemnifications, each Lender (in its capacity as such) shall not be
obligated to make any representations or warranties other than as to its
existence, authority, due execution, and ownership of the relevant Securities
and the enforceability of the relevant agreement against such Lender and (ii)
the indemnification obligation of each Lender provided to the proposed
Transferee with respect to the breach of any representation or warranty
concerning the Company shall be limited to the gross proceeds received by each
such Lender in connection with the Transfer. Each Lender electing to participate
in the Transfer described in the Transfer Notice (each, a "Participant") shall
indicate in its irrevocable notice of election to the Investors the maximum
number of Common Stock it desires to Transfer. Each such Participant shall be
entitled to Transfer a number of Securities equal to such holder's "pro rata
portion" of the total number of Securities to be Transferred, as set forth in
the Transfer Notice, up to such maximum number.
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(c) The exercise or non-exercise of the rights of any of the Lenders
hereunder to participate in one or more Transfers of Securities made by the
Investors shall not adversely affect their rights to participate in subsequent
Transfers of Securities subject to this Section 2.1.
2.2 Notwithstanding the foregoing, the provisions of this Section shall
not apply to (a)(i) any pledge of Securities made pursuant to a bona fide loan
transaction that creates a mere security interest; or (ii) any transfer to a
Family Donee or a Related Party; provided that (A) the transferring Investor
shall inform the Lenders of such pledgee, transfer or gift prior to effecting it
and (B) the pledgee, transferee or donee shall furnish the Lenders with a
written agreement to be bound by and comply with all provisions of Section 2.
Such transferred Securities will remain "Securities" hereunder, and such
pledgee, transferee or donee shall be treated as an "Investor" for purposes of
this Agreement; or (b) any Exempt Sale.
3.0 Restrictions on Transfer Right of First Refusal
3.1 Bona Fide Offer; Offer Notice. (a) If any Stockholder desires to
Transfer any of its Securities or any interest in such Securities, in any
transaction, other than an Exempt Sale, pursuant to a bona fide written offer,
such Stockholder (the "Selling Stockholder") shall first deliver written notice
of his desire to do so (the "Offer Notice") to each of the other Stockholders
(the "Other Stockholders"), in the manner prescribed in Section 7.8 of this
Agreement. The Offer Notice must specify in reasonable detail: (i) the name and
address of the Selling Stockholder, (ii) the name and address of the party to
which the Selling Stockholder proposes to sell or otherwise dispose of the
Securities or an interest in the Securities (the "Offeror"), (iii) the number
and description of Securities the Selling Stockholder proposes to sell or
otherwise dispose of (the "Offered Securities"), (iv) the proposed amount and
form of the consideration to be delivered to the Selling Stockholder for the
proposed sale, transfer or disposition, and the conditions of payment, (v) all
other material terms and conditions of the proposed transaction, and (vi) that
the Offeror has received a copy of this Agreement and has agreed to purchase the
Offered Securities in accordance with the terms and conditions hereof. The
Selling Stockholder shall include with the Offer Notice copies any agreements or
other documents related to the offer by the Offeror.
3.2 Stockholders' Option to Purchase.
(a) The Other Stockholders shall have an option, exercisable
for a period of thirty (30) days from the date of delivery of the Offer Notice,
to purchase, on a pro rata basis according to the number of shares of Common
Stock that each owns or which are issuable upon conversion of all Securities
beneficially owned by such Stockholder (calculated on a fully diluted basis),
the Offered Securities for the consideration per share and on the terms and
conditions set forth in the Offer Notice. Such option shall be exercised by
delivery by such Stockholder of written notice to the Selling Stockholder and
the Secretary of the Company.
(b) In the event options to purchase have been exercised by
the Stockholders with respect to some but not all of the Offered Securities,
those Stockholders who have exercised their options within the thirty (30)-day
period specified in Section 3.2(a) shall have an additional option, for a period
of ten (10) days next succeeding the expiration of such thirty (30)-day period,
to purchase all or any part of the balance of such Offered Securities on the
terms and
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conditions set forth in the Offer Notice, which option shall be exercised by the
delivery of written Offer Notice to the Secretary of the Company in accordance
with Section 7.8 of this Agreement. In the event there are two or more such
Stockholders that choose to exercise the last-mentioned option for a total
number of Offered Securities in excess of the number available, the Offered
Securities available for each such Stockholder's option shall be allocated to
such Stockholder pro rata based on the number of Securities beneficially owned
by the Stockholders so electing.
(c) If the options to purchase the Offered Securities are
exercised in full by the Stockholders, the Company shall immediately notify all
of the exercising Stockholders of that fact. The closing of the purchase of the
Offered Securities shall take place at the offices of the Company no later than
ten (10) days after the date of such notice to the Stockholders.
3.3 Permitted Transfers. Notwithstanding the foregoing, any Stockholder
may transfer any Securities (i) to a Family Donee of such Stockholder, (ii) to
any Related Party of Stockholder (together with a Family Donee, a "Permitted
Transferee"), (iii) to a Person pursuant to an Exempt Sale, or (iv) to another
Stockholder in each case without complying with the provisions of Section 3.1,
provided that, in each instance of a transfer pursuant to clauses (i) and (ii),
such Permitted Transferee first executes a written consent to be bound by all of
the provisions of, become a party to, and a "Stockholder" under, this Agreement
and shall deliver a copy of such consent to the Company and the Stockholders.
4.0 Preemptive Rights
4.1 Company Right of First Offer. Subject to the terms and conditions
specified in this Section 4.1, the Company hereby grants to each Stockholder a
right of first offer with respect to future sales by the Company of its Company
Shares (as hereinafter defined).
If, at any time while the Company is not precluded by any credit
agreement with any lender from performing its obligations under this Section
4.0, the Company proposes to offer for cash any shares of, or securities
convertible into or exercisable for any shares of, any class of the Company's
capital stock ("Company Shares") to any person or entity other than an entity
that is wholly-owned, directly or indirectly, by the Company, the Company shall
first make an offering of such Company Shares to each Stockholder in accordance
with the following provisions:
(a) The Company shall deliver a notice by certified mail ("Company
Notice") to each Stockholder stating (i) its bona fide intention to offer such
Company Shares, (ii) the number of such Company Shares to be offered, and (iii)
the price and terms, if any, upon which it proposes to offer such Company
Shares.
(b) Within fifteen (15) calendar days after the Company's giving of the
Company Notice, the Stockholder may elect to purchase, at the price and on the
terms specified in the Company Notice, up to that portion of such Company Shares
which equals the proportion that the number of shares of Common Stock issued and
held, or issuable upon conversion of the Securities then held, by such
Stockholder bears to the total number of shares of Common Stock of the Company
then outstanding (assuming full conversion and exercise of all outstanding
options, warrants and convertible securities).
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(c) If all Company Shares which Stockholders are entitled to purchase
pursuant to subsection 4.1(b) are not elected to be obtained as provided in
subsection 4.1(b) hereof, the Company may, during the ninety (90)-day period
following the expiration of the period provided in subsection 4.1(b) hereof,
offer the remaining unsubscribed portion of such Company Shares to any person or
persons at a price not less than, and upon terms no more favorable to the
offeree than those specified in, the Company Notice. If the Company does not
enter into an agreement for the sale of the Company Shares within such period,
or if such agreement is not consummated within sixty (60) days of the execution
thereof, the right provided hereunder shall be deemed to be revived and such
Company Shares shall not be offered unless first reoffered to the Stockholders
in accordance herewith.
4.2 Exceptions. The right of first offer described in this Section 4.0
shall not be applicable to (i) the issuance of securities as consideration for
an acquisition approved by the Board of Directors of the Company; (ii) the
issuance of securities to financial institutions or lessors in connection with
commercial credit arrangements, equipment financing or similar transactions
approved by the Board of Directors of the Company; (iii) shares issued upon
conversion or exchange of any security outstanding as of the date hereof,
offered pursuant to this Section 4.1 or exempted pursuant to this Section 4.2;
(iv) securities issued in connection with stock splits, stock dividends,
recapitalizations or like transactions; (v) the issuance of securities in
connection with a registered public offering of such securities; (vi) the
issuance of securities to employees, consultants or other service providers or
pursuant to any employee benefit plan of the Company; or (vii) a transaction
with respect to which Stockholders owning at least sixty-five percent (65%) of
the shares of Common Stock issued or issuable upon conversion of the Securities
have waived such right.
5.0 Management and Control
5.1 General. The business and affairs of the Company shall be managed,
controlled and operated in accordance with its certificate of incorporation and
by-laws, as the same may be amended from time to time.
5.2 Limitation on Certain Actions by the Company. So long as at least a
majority of the initially issued shares of Preferred Shares are outstanding,
consent of the holders of a majority of the outstanding Preferred Shares will be
required for the Company or any of its Subsidiaries to:
(a) enter into any agreement to sell or sell all or substantially all
of the Company's assets;
(b) enter into any agreement or take any action to effect a capital
reorganization of the Company or any consolidation or merger involving the
Company and a Person;
(c) enter into any agreement or take any action to liquidate or wind up
the business or affairs of the Company;
(d) amend, alter or repeal any provision of, or add any provision to,
the Company's Certificate of Incorporation, any Certificate of Designations of
preferred stock of the Company or Bylaws if such action would adversely alter or
change in any material respect the rights, preferences or privileges of the
Preferred Stock;
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(e) incur any additional indebtedness exceeding $5,000,000 in aggregate
principal amount that is senior to the Convertible Notes other than indebtedness
existing as of the date of this Agreement or replacement financing or
refinancing of such existing debt;
(f) enter into any agreement or take any action to make an acquisition,
investment or divestiture exceeding $2,500,000;
(g) enter into any agreement to issue or issue any additional shares of
Common Stock, or securities convertible into or exercisable for share of Common
Stock (excluding shares issuable upon conversion of the Preferred Stock or
Convertible Notes), to any Affiliate of the Company without consideration or for
a consideration per share less than the Fair Market Value per share of the
Common Stock; except that this paragraph (g) shall not apply to grants or
issuances to officers or Directors of the Company pursuant to stock option or
other employee benefit plans currently in existence or hereafter adopted by the
Company; or
(h) enter into any other transaction with any of its Affiliates which
is not on terms which would result from an arm's length transaction, except that
this provision shall not apply to any employment-related or other compensatory
arrangement between the Company and any of its Affiliates in their capacities as
officers, directors, or employees of the Company.
6.0 Certain Definitions
(a) "Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling, controlled by, or under common
control with, such Person; provided that, for the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
(b) "Amended Loan Agreement" shall mean the Amended and Restated Senior
Subordinated Loan Agreement among CDL, the Lenders and the Investors dated as of
the date hereof pursuant to which the Convertible Notes are being issued.
(c) "Business Day" shall mean any day except Saturday, Sunday and any
day which in New York shall be a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close.
(d) "Change of Control" shall mean
(i) the consummation of any consolidation or merger of the
Company in which the Company is not the continuing or surviving
corporation or pursuant to which shares of Common Stock would be
converted into cash, securities or other property, other than a merger
of the Company in which the holders of the shares of the Company's
Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger; or
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(ii) the consummation of any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company, other than to
a subsidiary or Affiliate; or
(iii) an approval by the stockholders of the Company of any
plan or proposal for the liquidation or dissolution of the Company; or
(iv) any action pursuant to which any person (as such term is
defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), corporation or other entity (other than
the Lenders (as defined in the Amended Loan Agreement) and any person
who owns more than ten percent (10%) of the outstanding Common Stock on
the date hereof, the Company or any benefit plan sponsored by the
Company or any of its subsidiaries) shall become the "beneficial owner"
(as such term is defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of shares of capital stock entitled to vote
generally for the election of Directors of the Company ("Voting
Securities") representing fifty-one (51%) percent or more of the
combined voting power of the Company's then outstanding Voting
Securities (calculated as provided in Rule 13d-3(d) in the case of
rights to acquire any such securities), unless, prior to such person so
becoming such beneficial owner, the Board shall determine that such
person so becoming such beneficial owner shall not constitute a Change
in Control; or
(v) the individuals (A) who, as of the date hereof (including
the nominees of the holders of the Company's Preferred Stock),
constitute the Board of Directors (the "Original Directors") and (B)
who thereafter are elected to the Board and whose election, or
nomination for election, to the Board was approved by a vote of at
least two thirds of the Original Directors then still in office (such
Directors being called "Additional Original Directors") and (C) who
thereafter are elected to the Board and whose election or nomination
for election to the Board was approved by a vote of at least two thirds
of the Original Directors and Additional Original Directors then still
in office, cease for any reason to constitute a majority of the members
of the Board.
(e) "Common Stock Per Share Market Value" shall mean the price per
share of Common Stock obtained by dividing (A) the Market Value by (B) the
number of shares of Common Stock outstanding (on a fully diluted basis) at the
time of determination.
(f) "Convertible Notes" means the Series A Convertible Notes and Series
B Convertible Notes of CDL.
(g) "Exempt Sale" means a sale of Securities owned by a Stockholder (or
a sale of the Common Stock underlying such Securities) (i) pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Securities Act"); (ii) in a transaction, consummated while Shares of that
class are registered under Section 12(b) or 12(g) of the Exchange Act which
satisfies the requirements of the first sentence of paragraph (f) of Rule 144
under the Securities Act (as such sentence and paragraph are in effect on the
date hereof) and, if such transaction is a "brokers' transaction" referred to in
such paragraph of Rule 144, also satisfies the requirements of paragraph (g) of
Rule 144 under the Securities Act (as such paragraph is in effect on the date
hereof); (iii) otherwise through the American Stock Exchange or on any other
securities exchange or on Nasdaq; or (iv) to the Company.
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(h) "Fair Market Value" shall mean, with respect to a share of Common
Stock on any Business Day:
(1) if the Common Stock is not Publicly Traded at the time of
such determination, the Common Stock Per Share Market Value; or
(2) if the Common Stock is Publicly Traded at the time of
determination, the "Market Price" of the Common Stock computed as the
average of the closing prices on such day of the Common Stock on all
domestic securities exchanges on which the Common Stock is then listed,
or, if there have been no sales on any such exchange on such day, the
average of the highest bid and lowest asked prices on all such
exchanges at the end of such day or, if on any such day the Common
Stock is not so listed, the average of the representative bid and asked
prices quoted on Nasdaq as of 4:00 P.M., New York time, on such day, or
if on any day such security is not quoted on Nasdaq, the average of the
highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case
averaged over a period of twenty (20) days consisting of the day as of
which "Market Price" is being determined and the nineteen consecutive
Business Days prior to such day, provided that, if Market Price is
being determined as of the date of a public offering of the Common
Stock, Market Price as of such date shall be the public offering price
for the Common Stock.
(i) "Family Donee" shall mean, with respect to individual Stockholders,
(i) such Stockholders' parents, spouse, adult lineal descendants and siblings,
(ii) the adult spouses of such siblings, the adult spouses of such lineal
descendants and the parents of such spouse, and (iii) trusts for the benefit of
any of such individuals or their children.
(j) "Market Value" shall mean the price that would be paid for the
entire common equity of the Company on a going-concern basis in an arm's-length
transaction between a willing buyer and a willing seller (neither acting under
compulsion), using valuation techniques as determined by the Board in its
reasonable discretion (but without giving effect to any discount in respect of a
minority interest) and determined in accordance with the Valuation Procedure,
and assuming full disclosure and understanding of all relevant information and a
reasonable period of time for effectuating such sale. For the purposes of
determining the Market Value, (a) the exercise price of options or warrants to
acquire Common Stock which are deemed to have been exercised for the purpose of
determining the number of shares of Common Stock outstanding on a fully diluted
basis, shall be deemed to have been received by the Company, (b)(i) the
liquidation preference or indebtedness, as the case may be, represented by
securities which are deemed exercised for or converted into Common Stock for the
purpose of determining the number of shares of Common Stock outstanding on a
fully diluted basis and (ii) any contractual limitation in respect of the shares
of Common Stock relating to voting rights, shall be deemed to have been
eliminated or canceled and (c) no effect shall be given to any discount that may
arise as the result of the fact that the shares of Common Stock are not Publicly
Traded.
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(k) "Nasdaq" means the National Association of Securities Dealers,
Inc., Automated Quotation System.
(l) "Person" shall mean any individual, corporation, limited
partnership, general partnership, limited liability company, joint stock
company, joint venture, association, company, trust, or any governmental or
political subdivision or any agency, department or instrumentality thereof.
(m) "Preferred Stock" shall mean the Series A Convertible Redeemable
Preferred Stock of CDL being issued to the Lenders pursuant to the terms of the
Exchange Agreement.
(n) "Publicly Traded" shall mean, with respect to any security, that
such security is (a) listed on a domestic securities exchange, (b) quoted on
Nasdaq or (c) traded in the domestic over-the-counter market, which trades are
reported by the National Quotation Bureau, Incorporated.
(o) "Valuation Procedure" shall mean, with respect to a determination
of any amount or value required to be determined in accordance with such
procedure, a determination (which shall be final and binding on the Company and
the holders of the Preferred Stock) made (i) by agreement among the Company and
the holders of a majority of the outstanding shares of Preferred Stock within
twenty (20) days following the event requiring such determination or (ii) in the
absence of such an agreement, by the Board in its reasonable discretion.
(p) "Related Party" shall mean with respect to any Person, (i) any
entity of which such Person is, directly or indirectly, the beneficial owner of
an equity interest which entitles such Person to cast fifty percent (50%) or
more of the votes with respect to the election of Directors or managers, or, in
some other manner, controls the management of such entity, (ii) any other Person
who is a Director, officer, partner, manager or other member of management of
such Person, or who is the beneficial owner of ten percent (10%) or more of any
class or series of equity interests in such Person and (iii) any trust or estate
in which such Person serves as trustee or in a similar capacity and as to which
one or more Family Donees of such Person are beneficiaries.
(q) "Series A Convertible Notes" means the Series A Convertible
Subordinated Debentures of CDL being issued pursuant to the terms of the
Exchange Agreement.
(r) "Series B Convertible Notes" means the Series B Convertible
Subordinated Debentures of CDL being issued pursuant to the terms of the
Exchange Agreement.
7.0 Miscellaneous
7.1 Duration of Agreement. The rights and obligations of the Company
and each Stockholder under this Agreement shall terminate on the earliest to
occur of the following:
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(a) the eighth anniversary of the date hereof or (b) immediately prior to the
consummation of a Change of Control.
7.2 Legend. Each certificate representing Securities shall bear the
following legends, until such time as the Securities represented thereby are no
longer subject to the provisions hereof:
(a) "The sale, transfer or assignment of the securities represented by
this certificate [note] are subject to the terms and conditions of a certain
Stockholders Agreement dated April 14, 2004, as the same may be amended from
time to time, among the Company and certain holders pursuant to the terms of
which the transfer of such securities is restricted. Copies of such Agreement
may be obtained at no cost by written request made by the holder of record of
this certificate to the Secretary of the Company"; and
(b) "The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and such shares 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."
7.3 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 DELAWARE APPLICABLE TO AGREEMENTS EXECUTED AND TO BE
PERFORMED SOLELY WITHIN SUCH STATE.
7.4 Injunctive Relief. It is acknowledged that it will be impossible to
measure the damages that would be suffered by the non-breaching party if any
party fails to comply with the provisions of this Agreement and that in the
event of any such failure, the non-breaching parties will not have an adequate
remedy at law. The non-breaching parties shall, therefore, be entitled to obtain
specific performance of the breaching party's obligations hereunder and to
obtain immediate injunctive relief. The breaching party shall not urge, as a
defense to any proceeding for such specific performance or injunctive relief,
that the non-breaching parties have an adequate remedy at law.
7.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective permitted successors and
assignees, legal representatives and heirs. Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the parties hereto
or their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. The administrator, executor or legal representative of any
deceased, juvenile or incapacitated Stockholder shall have the right to execute
and deliver all documents and perform all acts necessary to exercise and perform
the rights and obligations of such Stockholder under the terms of this
Agreement.
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7.6 Modification or Amendment. Neither this Agreement nor any
provisions hereof can be modified, amended, changed, discharged or terminated
except by an instrument in writing, signed by the Stockholders of at least a
majority of each class of the Securities then subject to this Agreement held by
such Stockholders.
7.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
7.8 Notices. All notices to be given or otherwise made to any party to
this Agreement 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, addressed to such
party at the address set forth below or at such other address as may hereafter
be designated in writing by the addressee to the addressor listing all parties.
If to the Company, to:
CD&L, Inc.
00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to its counsel:
Xxxx Xxxxxxxxxx, Esq.
Xxxxxxxxxx Xxxxxxx PC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Investors, to:
Xxxxxx Xxx Xxxx, Xx.
CD&L, Inc.
00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a copy (which shall not constitute notice) to their counsel:
Xxxx Xxxxxxxxx, Esq.
CD&L, Inc.
00 Xxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Lenders, to:
BNP Paribas
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy (which shall not constitute notice) to its counsel:
White & Case LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx, Esq.
Xxxx X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Exeter Venture Lenders, L.P.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Exeter Capital Partners IV, L.P.
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
7.9 No Other Agreements. Each Stockholder represents that he has not
granted and is not a party to any proxy, voting trust or other agreement which
is inconsistent with or conflicts with the provisions of this Agreement, and no
holder of Securities shall grant any proxy or become party to any voting trust
or other agreement which is inconsistent with or conflicts with the provisions
of this Agreement.
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7.10 Entire Agreement. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior arrangements or understandings (whether written or oral)
with respect thereto, except to the extent such matters are otherwise
specifically addressed in the Transaction Documents.
7.11 Submission to Jurisdiction; Waiver of Jury Trial. (a) Each of the
parties hereto hereby irrevocably acknowledges and consents that any legal
action or proceeding brought with respect to any of the obligations arising
under or relating to this Agreement may be brought in the courts of the State of
New York, County of New York or in the United States District Court for the
Southern District of New York and each of the parties hereto hereby irrevocably
submits to and accepts with regard to any such action or proceeding, for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts. Each party hereby further irrevocably
waives any claim that any such courts lack jurisdiction over such party, and
agrees not to plead or claim, in any legal action or proceeding with respect to
this Agreement or the transactions contemplated hereby brought in any of the
aforesaid courts, that any such court lacks jurisdiction over such party. Each
party irrevocably consents to the service of process in any such action or
proceeding by the mailing of copies thereof by registered or certified mail,
postage prepaid, to such party, at its address for notices set forth in Section
7.8 such service to become effective ten (10) days after such mailing. Each
party hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other documents contemplated hereby
that service of process was in any way invalid or ineffective. Subject to
Section 7.11(b) the foregoing shall not limit the rights of any party to serve
process in any other manner permitted by law. The foregoing consents to
jurisdiction shall not constitute general consents to service of process in the
State of New York for any purpose except as provided above and shall not be
deemed to confer rights on any Person other than the respective parties to this
Agreement.
(b) Each of the parties hereto hereby waives any right it may have
under the laws of any jurisdiction to commence by publication any legal action
or proceeding with respect to this Agreement. To the fullest extent permitted by
applicable law, each of the parties hereto hereby irrevocably waives the
objection which it may now or hereafter have to the laying of the venue of any
suit, action or proceeding arising out of or relating to this Agreement in any
of the courts referred to in Section 7.11(a) and hereby further irrevocably
waives and agrees not to plead or claim that any such court is not a convenient
forum for any such suit, action or proceeding.
(c) The parties hereto agree that any judgment obtained by any party
hereto or its successors or assigns in any action, suit or proceeding referred
to above may, in the discretion of such party (or its successors or assigns), be
enforced in any jurisdiction, to the extent permitted by applicable law.
(d) The parties hereto agree that the remedy at law for any breach of
this Agreement may be inadequate and that should any dispute arise concerning
any matter hereunder, this Agreement shall be enforceable in a court of equity
by an injunction or a decree of specific performance. Such remedies shall,
however, be cumulative and nonexclusive, and shall be in addition to any other
remedies which the parties hereto may have.
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(e) Each Stockholder hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a by jury in respect of any litigation
as between the parties directly or indirectly arising out of, under or in
connection with this Agreement or the transactions contemplated hereby or
disputes relating hereto. Each Stockholder (i) certifies that no representative,
agent or attorney of the any other Stockholder has represented, expressly or
otherwise that such other Stockholder would not, in the event of litigation,
seek to enforce the foregoing waiver and (ii) acknowledges that it and the other
Stockholders have been induced to enter into this Agreement by, among other
things, the mutual waivers and certifications in this Section 7.11(e).
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IN WITNESS WHEREOF, the Company, the Investors and the Lenders have
executed this Agreement in counterparts as of the date first above specified.
CD&L, INC.
By:__________________________________
Name:
Title:
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:
Investors Signatures Follow
