THE MAKER HAS CERTAIN SETOFF RIGHTS PURSUANT TO AN ASSET AND STOCK PURCHASE
AGREEMENT DATED THIS DATE AMONG THE MAKER, SUReway Air Traffic Corporation,
A SUBSIDIARY OF THE MAKER, VICTORY messenger serviceS, Inc., GOLD WINGS
TRUST, DAROBIN FREIGHT AGENCY, INC. AND XXXXXXX XXXX, THE HOLDER.
This Note has been 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 (the "Act"). This Note has not been
registered under the Act, or any state securities law, and may be offered
and sold only if registered pursuant to the provisions of the Act or those
laws or if an exemption from registration is available.
7% SUBORDINATED NOTE DUE 2001
OF CONSOLIDATED DELIVERY & LOGISTICS, INC.
Registered Holder: The Trustee created under Paragraph Third
of the Last Will and Testament of
Xxxxxxx Gold February 16, 1999
Address: 00 Xxxxxxxxx Xxxxx Xx. XX-0
Xxxxxxx, XX 00000
Principal Amount: $1,650,000 Clifton, New Jersey
Due: April 16, 2001
FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (the "Company"), hereby promises to pay to the holder above
named (the "Holder"), or its order or its registered assign(s), the principal
sum above stated in the following increments: (i) $50,000 on August 16, 1999,
(ii) $100,000 on February 16, 2000, (iii) $50,000 on August 16, 2000 and (iv)
the remainder on April 16, 2001, and to pay interest 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 shall be payable
quarterly beginning on the date hereof; provided however that the final interest
payment shall be made simultaneously with the final payment of principal due on
April 16, 2001 and shall include all interest thereon accrued through such date.
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. The Company may prepay this debt, in whole
or in part, without premium or penalty at any time.
ARTICLE ONE
SUBORDINATION
(a) Subordination of Liabilities. Holder by its acceptance of this
Subordinated Note covenants and agrees that the payment of the principal of,
interest on, and all other amounts owing in respect of, this Subordinated Note
(the "Subordinated Indebtedness") is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness. The provisions of this Article One shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue or hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior Indebtedness,
and such holders are hereby made obligees hereunder the same as if their names
were written herein as such, and they and/or each of them may proceed to enforce
such provisions.
(b) Company Not to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances.
(i) Upon the maturity of any Senior Indebtedness (including
interest thereon or fees or any other amounts owing in respect thereof),
whether at stated maturity, by acceleration or otherwise, all Obligations
owing in respect thereof, in each case to the extent due and owing, shall
first be paid in cash, before any payment (whether in cash, property
securities or otherwise) is made on account of the Subordinated
Indebtedness.
(ii) The Company may not, directly or indirectly, make any
payment with respect to any Subordinated Indebtedness and may not acquire
any Subordinated Indebtedness for cash or property while there exists any
default or event of default under the Credit Agreement or any other issue
of Senior Indebtedness that is then in existence.
(iii) In the event the Holder receives written notice that an
event of default exists with respect to any Senior Indebtedness (a "Notice
of Event of Default"), the Holder agrees not to accelerate the payment of
the obligations of the Company hereunder or bring any action with respect
thereto, until the earlier of (a) receipt by the Holder of written notice
that such Event of Default has been cured, or (b) six (6) months following
the date of the Notice of Event of Default.
(iv) In the event that notwithstanding the provisions of the
preceding clauses (i) and (ii) of this Article One, the Company shall make
any payment on account of the Subordinated Indebtedness at a time when
payment is not permitted by said clause (i) or (ii), such payment shall be
held by the holder of this Subordinated Note, in trust for the benefit of,
and shall be paid forthwith over and delivered to, the holders of Senior
Indebtedness or their representative or the trustee under the indenture or
other agreement pursuant to which any instruments evidencing any Senior
Indebtedness may have been issued, as their respective interests may
appear, for application pro rata to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in
full in accordance with the terms of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness. Without in any way modifying the provisions of this
Article One or affecting the subordination effected hereby if the hereafter
referenced notice is not given, the Company shall give the holder of this
Subordinated Note prompt written notice of any event which would prevent
payments under clause (i) or (ii) of this Section (b).
(c) Subordination to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization of Company. Upon any distribution of
assets of the Company upon dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest at the rate provided
in the documentation with respect to the Senior Indebtedness, whether or
not such post-petition interest is an allowed claim against the debtor in
any bankruptcy or similar proceeding) before the holder of this
Subordinated Note is entitled to receive any payment of any kind or
character on account of the Subordinated Indebtedness;
(ii) any payment or distributions of assets of the Company of any
kind or character, whether in cash, property or securities to which the
holder of this Subordinated Note would be entitled except for the
provisions of this Article One, shall be paid by the liquidating trustee or
agent or other person making such payment or distribution, whether a
trustee in bankruptcy, a receiver or liquidating trustee or other trustee
or agent, directing to the holders of Senior Indebtedness or their
representative or representatives, or the trustee or trustees under any
indenture under which any instruments evidencing any such Senior
Indebtedness may have been issued, to the extent necessary to make payment
in full in cash of all Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness; and
(iii) in the event that, notwithstanding the foregoing provision
of this Section (c), any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, shall be
received by the holder of this Subordinated Note on account of Subordinated
Indebtedness before all Senior Indebtedness is paid in full in cash, such
payment or distribution shall be received and held in trust for and shall
be paid over to the holders of the Senior Indebtedness remaining unpaid or
unprovided for or their representative or representatives, or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, for
application to the payment of such Senior Indebtedness until all such
Senior Indebtedness shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
Without in any way modifying the provisions of this Article One or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Company shall give prompt written notice to the holder of this
Subordinated Note of any dissolution, winding up, liquidation or reorganization
of the Company (whether in bankruptcy, insolvency or receivership proceedings or
upon assignment for the benefit of creditors or otherwise).
(d) Subrogation. Subject to the prior payment in full in cash of all
Senior Indebtedness, the holder of this Subordinated Note shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of the Company applicable to the Senior Indebtedness
until all amounts owing on this Subordinated Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or on behalf of the
holder of this Subordinated Note shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and the holder of this
Subordinated Note, be deemed to be payment by the Company to or on account of
the Senior Indebtedness, it being understood that the provisions of this Article
One are and are intended solely for the purpose of defining the relative rights
to the holder of this Subordinated Note, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.
(e) Obligation of the Company Unconditional. Nothing contained in this
Article One or otherwise in this Subordinated Note is intended to or shall
impair, as between the Company and the holder of this Subordinated Note, the
obligation of the Company, which is absolute and unconditional, to pay to the
holder of this Subordinated Note the principal of and interest on this
Subordinated Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of this Subordinated Note and creditors of the Company
other than the holders of the Senior Indebtedness, nor shall anything herein or
therein prevent the holder of this Subordinated Note from exercising all
remedies otherwise permitted by applicable law upon an event of default under
this Subordinated Note, subject to the limitations, if any, under this Article
One or the rights of Holders to exercise rights and remedies, and subject to the
rights, if any, under Article One of the holders of Senior Indebtedness in
respect of cash, property, or securities of the Company received upon the
exercise of any such remedy. Upon any distribution of assets of the Company
referred to in this Article One, the holder of this Subordinated Note shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of this
Subordinated Note, for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of the Senior Indebtedness and
other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article One.
(f) Subordination Rights Not Impaired by Acts or Omission of Company
or Holders of Senior Indebtedness. No right of any present and future holders of
any Senior Indebtedness to enforce subordination as herein provided shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of the Company or by any act or failure to act in good faith by any such
holders, or by any noncompliance by the Company with the terms and provisions of
this Subordinated Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
this Subordinated Note with respect hereto, at any time or from time to time and
in their absolute discretion, change the manner, place or terms of payment of,
change or extend the time of payment of, or renew or alter, any Senior
Indebtedness or amend, modify or supplement any agreement or instrument
governing or evidencing such Senior Indebtedness or any other document referred
to therein, or exercise or refrain from exercising any other of their rights
under the Senior Indebtedness including, without limitation, the waiver of
default thereunder and the release of any collateral securing such Senior
Indebtedness, all without notice to or assent from the holder of this
Subordinated Note.
(g) Definitions. For purposes of Article One of this Subordinated
Note, the following capitalized terms have the following meanings:
"Credit Agreement" means the Loan and Security Agreement (as amended,
modified, supplemented, extended, restated, refinanced, replaced or refunded
from time to time), originally dated as of June 14, 1997, by and between the
Company and its subsidiaries and First Union Commercial Corporation or its
affiliates and all other indebtedness due to First Union Commercial Corporation
or its affiliates, or any other bank or similar financial institution.
"Mezzanine Agreement" means the Senior Subordinated Loan Agreement (as
amended, modified, supplemented, extended, restated, refinanced, replaced or
refunded from time to time), dated as of January 28, 1999, by and between the
Company, Paribas Capital Funding LLC, Exeter Venture Lenders, L.P., Exeter
Capital Partners IV, L.P. and the other Lenders from time to time party thereto.
"Obligations" means any principal, interest, premium, penalties, fees,
expenses, indemnities and other liabilities and obligations (including any
guaranties of the foregoing liabilities and obligations) payable under the
documentation governing any Senior Indebtedness (including interest accruing
after the commencement of any bankruptcy, insolvency, receivership or similar
proceeding, whether or not such interest is an allowed claim against the debtor
in any such proceeding).
"Senior Indebtedness" means all Obligations (i) of the Company under,
or in respect of, the Credit Agreement and any guaranty thereunder, (ii) of the
Company under, or, in respect of, the Mezzanine Agreement and any guaranty
thereof and (iii) of the Company with respect to indebtedness for borrowed money
and any guaranty thereof which is due to a bank or other institutional or which
is outstanding as a result of any public offering or private placement of debt
securities arranged by a bank or financial institution. This Note shall be pari
passu with other subordinated notes issued in connection with business
acquisitions by the Company.
(h) In furtherance of this Subordination the Holder agrees to execute
and deliver any and all documents requested by the Company for delivery to
holders of its Senior Indebtedness (in the form as requested by such creditors)
in order to 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 ten
(10) days after written notice of non-payment has been received by the Company;
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.
Subject to the provisions of Article One hereof, 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
MISCELLANEOUS
3.01 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.
3.02 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., 000 Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxxxx
00000, Attn: General Counsel.
3.03 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.
3.04 Incorporation of Asset and Stock Purchase Agreement. This is the
Note issued pursuant to the Asset and Stock Purchase Agreement, dated the date
hereof, among the Company, the Holder and others, and is subject to set off and
to the other terms and conditions of such Asset and Stock Purchase Agreement,
which is incorporated herein by reference.
3.05 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.
3.06 Governing Law; Consent to Jurisdiction. This Note has been
executed in and shall be governed by the laws of the State of New Jersey,
without reference to the choice of law principles thereof. Each of the Holder
and the Company 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, located in Passaic or Essex County, State of Jersey, for
the purpose of any suit, action, proceeding or judgment relating to or arising
out of this Note and the transactions contemplated hereby. Service of process in
connection with any such suit, action or proceeding may be served on each of the
Holder and the Company anywhere in the world by the same methods as are
specified for the giving of notices under this Note. Each of the Holder and the
Company 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 of the
Holder and the Company 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.
3.07 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:_________________________________________
Name:
Title:
