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<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2003
                                       OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                             EXCHANGE ACT OF 1934
For the transition period from .................... to ....................
                         Commission file number 0-26954
                                   CD&L, INC.
             (Exact name of registrant as specified in its charter)
                       Delaware                           22-3350958
            State or other jurisdiction of             (I.R.S. Employer
            incorporation or organization             Identification No.)

                   80 Wesley Street
             South Hackensack, New Jersey                   07606
       (Address of principal executive offices)           (Zip Code)
Registrant's telephone number, including area code (201) 487-7740

Securities registered pursuant to Section 12(b) of the Act:
          Title of each class          Name of each exchange on which registered
Common Stock, par value $.001 per share        American Stock Exchange

        Securities registered pursuant to section 12(g) of the Act: None

Indicate by check mark whether: the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. |_|

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act of 1934) Yes |_| No |X|

The aggregate market value of voting common equity of the registrant held by
non-affiliates (for this purpose, persons and entities other than executive
officers, directors, and 5% or more shareholders) of the registrant, as of the
last business day of the registrant's most recently completed second fiscal
quarter (June 30, 2003), was $3,343,185.

The number of shares of the registrant's Common Stock, $.001 par value,
outstanding was 7,658,660 and the aggregate market value of voting common equity
of the registrant held by non-affiliates of the registrant was $6,718,638 as of
April 7, 2004.

Documents Incorporated by Reference:  None


================================================================================
<PAGE>

                                   CD&L, INC.

                                    FORM 10-K

                      FOR THE YEAR ENDED DECEMBER 31, 2003

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                           Page(s)
                                                                                                           -------
<S>               <C>                                                                                      <C>

PART I
    Item 1.       Business Description ...................................................................... 3
    Item 2.       Properties.................................................................................11
    Item 3.       Legal Proceedings..........................................................................12
    Item 4.       Submission of Matters to a Vote of Security Holders........................................12


PART II
    Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters......................13
    Item 6.       Selected Financial Data....................................................................14
    Item 7.       Management's Discussion and Analysis of Financial
                     Condition and Results of Operations.....................................................15
    Item 7A.      Quantitative and Qualitative Disclosures About Market Risk.................................27
    Item 8.       Financial Statements and Supplementary Data................................................28
    Item 9.       Changes in and Disagreements with Accountants on
                     Accounting and Financial Disclosures....................................................59
    Item 9A.      Controls and Procedures....................................................................59

PART III
    Item 10.      Directors and Executive Officers of the Company............................................60
    Item 11.      Executive Compensation.....................................................................62
    Item 12.      Security Ownership of Certain Beneficial Owners and Management ............................65
    Item 13.      Certain Relationships and Related Transactions.............................................66
    Item 14.      Principal Accountant Fees and Services.....................................................66


PART IV
    Item 15.      Exhibits, Financial Statement Schedules and Reports on Form 8-K............................67

SIGNATURES           ........................................................................................71

CERTIFICATIONS       ........................................................................................72
</TABLE>

                                       2
<PAGE>

                                     PART I

         Statements and information presented within this Annual Report on Form
10-K for CD&L, Inc. (the "Company", "CD&L", or "we") include certain statements
that may be deemed to be "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E
of the Exchange Act. These forward-looking statements include, but are not
limited to, statements about our plans, objectives, expectations and intentions
and other statements contained in this report that are not historical facts.
When used in this report, the words "expects," "anticipates," "intends,"
"plans," "believes," "seeks" and "estimates" and similar expressions are
generally intended to identify forward-looking statements. These statements are
based on certain assumptions and analyses made by the Company in light of its
experience and perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate in the
circumstances. Such statements are subject to a number of assumptions, risks and
uncertainties, including the risk factors (Item 1. Business Description - Risk
Factors) discussed below, general economic and business conditions, the business
opportunities (or lack thereof) that may be presented to and pursued by the
Company, changes in law or regulations and other factors, many of which are
beyond the control of the Company. Readers are cautioned that any such
statements are not guarantees of future performance and that actual results or
developments may differ materially from those projected in the forward-looking
statements. All subsequent written or oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified by these factors.

Item 1.  Business Description

Overview

         We are one of the leading national full-service providers of
customized, same-day, time-critical, delivery services to a wide range of
commercial, industrial and retail customers. Our services are provided
throughout the United States.

         We offer the following delivery services:

         o        rush delivery service, typically consisting of delivering
                  time-sensitive packages, such as critical parts, emergency
                  medical devices and legal and financial documents from
                  point-to-point on an as-needed basis;

         o        routed services, providing, on a recurring and often daily
                  basis, deliveries from pharmaceutical suppliers to pharmacies,
                  from manufacturers to retailers, and the inter-branch
                  distribution of financial documents in a commingled system;

         o        facilities management, including providing and supervising
                  mailroom personnel, mail and package sorting, internal
                  delivery and outside local messenger services; and

         o        dedicated contract logistics, providing a comprehensive
                  solution to major corporations that want the control,
                  flexibility and image of an in-house fleet with all the
                  economic benefits of outsourcing.

                                       3
<PAGE>
Our Industry

         The same-day delivery industry is serviced by a fragmented system of
thousands of companies that include only a small number of large regional or
national operators. The industry has been impacted by the following:

         o        Outsourcing and Vendor Consolidation. Commercial and
                  industrial businesses, which choose same-day delivery
                  services, sometimes prefer concentrating on their core
                  business by outsourcing non-core activities. These businesses
                  seek single-source solutions for their regional and national
                  same-day delivery needs rather than utilizing a number of
                  smaller, local delivery companies. At the same time, some
                  larger national and international companies are looking toward
                  decentralized distribution systems.

         o        Heightened Customer Expectations. Increasing customer demand
                  for specialized services such as customized billing, enhanced
                  tracking, storage, inventory management and just-in-time
                  delivery capabilities favor companies with greater resources
                  to devote to providing those services. The use of facsimile
                  technology and the Internet have increased the speed at which
                  the processing of information and transactions occur such that
                  the requirements for immediate delivery of a wide range of
                  critical items has become commonplace.

Our Services

         We provide our customers with a broad range of customized, same-day,
time-critical, delivery service options.

Rush. In providing rush delivery services, or services on demand, our messengers
and drivers respond to customer requests for the immediate pick-up and delivery
of time-sensitive packages. We generally offer one-, two- and four-hour service,
on a 7-days-a-week, 24-hours-a-day basis. Our typical customers for rush service
include commercial and industrial companies, health care providers and service
providers such as accountants, lawyers, advertising and travel agencies and
public relations firms.

Routed and Scheduled. Our scheduled delivery services are provided on a
recurring and often daily basis. We typically pick up or receive large shipments
of products, which are then scanned, sorted, routed and delivered. These
deliveries are made in accordance with a customer's predetermined schedule that
generally provides for deliveries to be made at specific times. Typical routes
may include deliveries from pharmaceutical suppliers to pharmacies, from
manufacturers to retailers, the inter-branch distribution of financial
documents, payroll data and other time-critical documents for banks, financial
institutions and insurance companies. We also provide these services to large
retailers for home delivery, including large cosmetic companies, door-to-door
retailers, catalog retailers, home health care distributors and other direct
sales companies.

Facilities Management. We provide complete mailroom management services, by
offering customized solutions that include performing the entire mailroom
function. This includes mail meter management, messenger delivery services, main
entrance personnel and management personnel.

Dedicated Contract Logistics. We offer efficient and cost-effective dedicated
delivery solutions, such as fleet replacement solutions, dedicated delivery
systems and transportation systems management services. These services provide
major health care providers, office product companies, retailers and financial
institutions with the control, flexibility and image of an in-house fleet and
with all of the economic benefits of outsourcing.

Our Internal Operations

         We operate from 67 leased facilities and 34 customer owned facilities
in 22 states and with various managed agents in all other states. The size of
each facility varies, but typically includes dedicated dispatch and order entry
functions as well as delivery personnel. We accomplish coordination and
deployment of our delivery personnel either through communications systems
linked to our computers, through pagers, mobile data units, or by radio or
telephone. A dispatcher coordinates shipments for delivery within a specific
time frame. We route a shipment according to its type and weight, the geographic
distance between its origin and destination and the time allotted for its
delivery. In the case of scheduled deliveries, we design routes to minimize the
unit costs of the deliveries and to enhance route density. We continue to deploy
new hardware and software systems designed to enhance the capture, routing,
tracking and reporting of deliveries throughout our network. To further improve
customer service, we offer customers the opportunity to access this information
via the Internet.
                                       4
<PAGE>

Sales and Marketing

         We believe that a direct sales force most effectively reaches customers
for same-day, time-critical delivery services and, accordingly, we do not
currently engage in mass media advertising. We market directly to individual
customers by designing and offering customized service packages after
determining their specific delivery and distribution requirements. We have
implemented a coordinated major account strategy by building on established
relationships with regional and national customers.

         Many of the services we provide, such as facilities management,
dedicated contract logistics and routed delivery services are determined on the
basis of competitive bids. However, we believe that quality and service
capabilities are also important competitive factors. We derive a substantial
portion of our revenues from customers with whom we have entered into contracts.

Competition

         The market for our delivery services is highly competitive. We believe
that the principal competitive factors in the markets in which we compete are
service performance, dedicated resources, technology and price. We compete on
all of those factors. Most of our competitors in the time-critical, same-day,
delivery market are privately held companies that operate in only one location
or within a limited service area. Our services are available 24-hours-a-day,
7-days-a-week.

Acquisitions and Sales of Businesses

         We were formed as a Delaware corporation in June 1994. As of December
31, 2003, we had acquired 26 same-day time-critical delivery businesses,
including the 11 companies that we acquired simultaneously with the commencement
of our operations in November 1995. We paid approximately $67,800,000
($29,600,000 in cash and 2,935,702 shares of our common stock) to acquire the 11
founding companies. In addition to the acquisition of those companies, we
acquired certain additional assets from two companies in transactions that we
accounted for as purchases. Those acquired assets were not material.

         In 1996, we acquired five additional businesses that had approximately
$15,600,000 in aggregate annual revenues. We paid approximately $3,300,000 to
acquire those companies using a combination of cash, seller-financed debt and
shares of our common stock. Subsequently, the aggregate purchase price paid for
those companies was reduced by approximately $616,000 because the actual
revenues of some of the acquired companies did not reach the revenues projected
by the sellers. We accounted for each of the 1996 acquisitions as purchases.

         In 1997, we did not make any acquisitions and instead focused on
internal growth. Consistent with our change of strategic focus, in January 1997
we sold our contract logistics subsidiary back to its founder in exchange for
137,239 shares of our common stock. In connection with that sale, we recorded a
gain of approximately $816,000 before the effect of Federal and state income
taxes.

         In December 1997, we sold our direct mail business for $850,000 in cash
and notes. In connection with that sale, we recorded a gain of approximately
$23,000 net of Federal and state income taxes of approximately $15,000.
Subsequently, in 1999 the company to which we sold our direct mail business went
out of business and defaulted on their note and the Company wrote off the
remaining balance of the note of $661,868.

         In 1998, we acquired four same-day, time-critical delivery businesses
that had aggregate annual revenues of approximately $25,100,000. We paid
approximately $14,500,000 for the businesses consisting of a combination of
cash, shares of our common stock and seller-financed debt. We accounted for each
of the 1998 acquisitions as purchases.

         In 1999, we acquired four same-day, time-critical delivery businesses
that had aggregate annual revenues of approximately $24,800,000. We paid
approximately $12,700,000 for the businesses consisting of a combination of
cash, shares of our common stock and seller-financed debt. The acquisitions were
accounted for as purchase transactions. Under the terms of the purchase
agreements, additional payments of approximately $600,000 were made in 2000 and
2001 upon the accomplishment of certain financial objectives.

                                       5
<PAGE>

         On December 1, 2000, we made a strategic decision to dispose of our air
delivery business. On March 30, 2001, we consummated a transaction providing for
the sale of certain assets and liabilities of Sureway Air Traffic Corporation,
Inc. ("Sureway"), our air delivery business. The selling price for the net
assets was approximately $14,150,000 and was comprised of $11,650,000 in cash, a
subordinated promissory note (the "Note Receivable") for $2,500,000 and
contingent cash payments based upon the ultimate development of certain
liabilities retained by us. The financial position, operating results and the
provision for loss on the disposition of the Company's air delivery business
have been segregated from continuing operations and classified as discontinued
operations in the accompanying consolidated financial statements.

         The Company reported a net loss on the disposition of the Company's air
delivery business of $465,000 (net of benefit for income taxes of $240,000)
accounted for as discontinued operations for the year ended December 31, 2001.

         In February 1999, the Company became obligated for seller-financed
acquisition debt of $1,650,000 related to the acquisition of Gold Wings (See
Note 4 of Notes to Consolidated Financial Statements). As of February 28, 2003,
the note had a remaining principal balance of $1,034,000 (the "CDL/Gold Note").
On February 28, 2003, the Company completed a series of related transactions
with GMV Express, Inc. ("GMV"), Richard Gold (a principal of GMV) ("Gold") and
his affiliates, and Global Delivery Systems LLC ("Global") and its subsidiary,
Sureway Worldwide LLC ("Sureway Worldwide"). The net effect of the transactions
with Global, Sureway Worldwide, GMV and Gold was that the Company assigned the
Note Receivable to GMV in exchange for a release on the CDL/Gold Note payable,
so that the Company was relieved of its $1,034,000 liability for the CDL/Gold
Note and the Company has no further rights to the Note Receivable. In addition,
the Company received payments from Sureway Worldwide and Global of approximately
$117,000 ($72,000 in settlement of disputed claims and $45,000 for other amounts
due) and provided Gold with a release covering claims of breach of certain
non-competition agreements. As a result of this transaction, the Company
recorded a gain of $1,034,000 during the year ended December 31, 2003, included
as a component of other (income) expense, net on the consolidated statement of
operations.

         On June 14, 2001, the Company consummated a transaction providing for
the sale of all the outstanding stock of National Express, Inc., the Company's
ground courier operations in the Mid-West, to First Choice Courier and
Distribution, Inc. ("First Choice"). The selling price was approximately
$2,530,000 and was comprised of $880,000 in cash and a subordinated promissory
note (the "Promissory Note") for $1,650,000.

         As of March 14, 2003, the Promissory Note was amended to defer the
interest and principal payments due on December 14, 2002 and March 14, 2003. The
new quarterly payment schedule commenced on June 14, 2003 with interest only
payments at a new interest rate at 9.0% per annum. Upon the earlier of June 14,
2004 or the maker of the Promissory Note meeting certain financial benchmarks,
principal payments shall resume and the interest rate will prospectively revert
back to 7.0% per annum. The final balloon payment of approximately $1,100,000
plus any remaining principal or unpaid interest remains due on June 14, 2006.

         Subsequently, on March 1, 2004, the Company consummated a transaction
providing for the repurchase of certain Indiana-based assets and liabilities
sold to First Choice in June 2001. The acquisition, including the release of
certain non-compete agreements, we believe will support and enhance our business
growth opportunities in Indiana. Consideration paid for the repurchase includes
cancellation of the Promissory Note owed by First Choice of approximately
$1,600,000 plus a three year contingent earn-out based on future net revenue
generated by the accounts repurchased.


Regulation

         Our delivery operations are subject to various state and local
regulations and, in many instances, we require permits and licenses from state
authorities. To a limited degree, state and local authorities have the power to
regulate the delivery of certain types of shipments and operations within
certain geographic areas. Interstate and intrastate motor carrier operations are
also subject to safety requirements prescribed by the U.S. Department of
Transportation ("DOT") and by state departments of transportation. If we fail to
comply with applicable regulations, we could face substantial fines or possible
revocation of one or more of our operating permits.

                                       6
<PAGE>

Safety

         We seek to ensure that all of our drivers meet safety standards
established by us and our insurance carriers as well as the U.S. DOT. In
addition, where required by the DOT, state or local authorities, we require that
our independent contractors meet certain specified safety standards. We review
prospective drivers in an effort to ensure that they meet applicable
requirements.

Employees and Independent Contractors

         As of December 31, 2003, we employed approximately 1,433 full-time and
part-time people, 188 as drivers, 547 as messengers, 520 in operations, 132 in
clerical and administrative positions, 21 in sales, 19 in information technology
and 6 in executive management. We are not a party to any collective bargaining
agreements. We also had agreements with approximately 2,450 independent
contractors as of December 31, 2003. We have not experienced any work stoppages
and believe that our relationship with our employees and independent contractors
is good.

Risk Factors

         You should carefully consider the following factors as well as the
other information in this report before deciding to invest in shares of our
common stock.

We have limited capital resources.

         We have an accumulated deficit of ($7,146,000) as of December 31, 2003.
Although we were in compliance with our Senior Notes debt covenants at December
31, 2003, we were anticipating non-compliance with certain covenants in 2004 and
beyond. Additionally, based on our cash flow projections, we would be unlikely
able to pay the $9,000,000 balloon payment on the Senior Notes due to be paid in
January 2006. Subsequently, on April 14, 2004, we restructured our senior debt
and related covenants. The restructuring includes an agreement among us, our
lenders and certain members of CD&L management and others which improves the
Company's short-term liquidity and reduces interest expense. See Liquidity and
Capital Resources section in Item 7. and Notes to Consolidated Financial
Statements Note 17 - Subsequent Events. There can be no assurances that our
lenders will agree to waive any future covenant violations, if any, continue to
renegotiate and modify the terms of our loans, or further extend the maturity
date, should it become necessary to do so. Further, there can be no assurances
that we will be able to meet our revenue, cost or income projections, upon which
the debt covenants are based.

Price competition could reduce the demand for our service.

         The market for our services has been extremely competitive and is
expected to be so for the foreseeable future. Price competition is often
intense, particularly in the market for basic delivery services where barriers
to entry are low.

Claims above our insurance limits, or significant increases in our insurance
premiums, may reduce our profitability.

         We currently employ 171 full-time and 17 part-time employee drivers.
From time to time some of those drivers are involved in automobile accidents. We
currently carry liability insurance of $1,000,000 for each employee driver
subject to applicable deductibles and carry umbrella coverage up to $5,000,000
in the aggregate. However, claims against us may exceed the amounts of available
insurance coverage. We also contract with approximately 2,450 independent
contractor drivers. In accordance with Company policy, all independent
contractor drivers are required to maintain liability coverage as well as
workers' compensation or occupational accident insurance. If we were to
experience a material increase in the frequency or severity of accidents,
liability claims or workers' compensation claims, or unfavorable resolutions of
claims, our operating results could be materially affected. With regards to
independent contractors, the Company carries umbrella coverage of $5,000,000
($2,000,000 before March 1, 2004) in the aggregate.

                                       7
<PAGE>

As a same-day delivery company, our ability to service our clients effectively
is often dependent upon factors beyond our control.

         Our revenues and earnings are especially sensitive to events that are
beyond our control that affect the same-day delivery services industry,
including:

         o        extreme weather conditions;

         o        economic factors affecting our significant customers;

         o        mergers and consolidations of existing customers;

         o        U.S. business activity; and

         o        the levels of unemployment.

Our reputation will be harmed, and we could lose customers, if the information
and telecommunications technologies on which we rely fail to adequately perform.

         Our business depends upon a number of different information and
telecommunication technologies as well as the ability to develop and implement
new technology enabling us to manage and process a high volume of transactions
accurately and timely. Any impairment of our ability to process transactions in
this way could result in the loss of customers and diminish our reputation.

Governmental regulation of the transportation industry, particularly with
respect to our independent contractors, may substantially increase our operating
expenses.

         From time to time, federal and state authorities have sought to assert
that independent contractors in the transportation industry, including those
utilized by us, are employees rather than independent contractors. We believe
that the independent contractors that we utilize are not employees under
existing interpretations of federal and state laws. However, federal and state
authorities have and may continue to challenge this position. Further, laws and
regulations, including tax laws, and the interpretations of those laws and
regulations, may change. If, as a result of changes in laws, regulations,
interpretations or enforcement by federal or state authorities, we become
required to pay for and administer added benefits to independent contractors,
our operating costs could substantially increase.

Shareholders will experience dilution when we issue the additional shares of
common stock that we are permitted or required to issue under convertible notes,
options and warrants.

         We are permitted, and in some cases obligated, to issue shares of
common stock in addition to the common stock that is currently outstanding. If
and when we issue these shares, the percentage of the common stock currently
issued and outstanding will be diluted. The following is a summary of additional
shares of common stock that we have currently reserved for issuance as of
December 31, 2003:

         o        506,250 shares are issuable upon the exercise of outstanding
                  warrants at an exercise price of $.001 per share.

         o        4,000,000 shares are issuable upon the exercise of options or
                  other benefits under our employee stock option plan,
                  consisting of:

                  o        outstanding options to purchase 1,757,697 shares at a
                           weighted average exercise price of $3.04 per share,
                           of which options covering 1,756,031 shares were
                           exercisable as of December 31, 2003; and

                  o        2,242,303 shares available for future awards after
                           December 31, 2003.

                                       8
<PAGE>

         o        200,000 shares are issuable upon the exercise of options or
                  other benefits under our independent director stock option
                  plan, consisting of:

                  o        outstanding options to purchase 157,500 shares at a
                           weighted average exercise price of $1.61 per share,
                           of which options covering 127,500 shares were
                           exercisable as of December 31, 2003; and

                  o        42,500 shares available for future awards after
                           December 31, 2003.

         o        430,518 shares are issuable upon the exercise of outstanding
                  convertible notes at a weighted average exercise price of
                  $6.46 per share.

Subsequent to the financial restructuring on April 14, 2004 (See Liquidity and
Capital Resources section in Item 7. and Notes to Consolidated Financial
Statements Note 17 - Subsequent Events):

         o        3,937,008 shares are issuable upon the conversion of the new
                  convertible investor notes at a weighted average exercise
                  price of $1.016 per share.

         o        1,968,504 shares are issuable upon the conversion of the
                  Amended Paribas Convertible Subordinated Notes at a weighted
                  average exercise price of $2.032 per share.

         o        3,937,010 shares are issuable upon the conversion of the
                  Series A Preferred Stock at a weighted average exercise price
                  of $1.016 per share.


Our success is dependent on the continued service of our key management
personnel.

         Our future success depends, in part, on the continued service of our
key management personnel. If certain employees were unable or unwilling to
continue in their present positions, our business, financial condition,
operating results and future prospects could be materially adversely affected.

If we fail to maintain our governmental permits and licenses, we may be subject
to substantial fines and possible revocation of our authority to operate our
business in certain jurisdictions.

         Our delivery operations are subject to various state, local and federal
regulations that in many instances require permits and licenses. If we fail to
maintain required permits or licenses, or to comply with applicable regulations,
we could be subject to substantial fines or our authority to operate our
business in certain jurisdictions could be revoked.

Our certificate of incorporation, by-laws, shareholder rights plan and Delaware
law contain provisions that could discourage a takeover that current
shareholders may consider favorable.

         Provisions of our certificate of incorporation, by-laws and our
shareholder rights plan, as well as Delaware law, may discourage, delay or
prevent a merger or acquisition that you may consider favorable. These
provisions of our certificate of incorporation and by-laws:

         o        establish a classified board of directors in which only a
                  portion of the total number of directors will be elected at
                  each annual meeting;

         o        authorize the Board of Directors to issue preferred stock;

         o        prohibit cumulative voting in the election of directors;

         o        limit the persons who may call special meetings of
                  stockholders;

         o        prohibit stockholder action by written consent; and

         o        establish advance notice requirements for nominations for the
                  election of the board of directors or for proposing matters
                  that can be acted on by stockholders at stockholder meetings.

                                       9
<PAGE>

           In addition, we have adopted a Stockholder Protection Rights Plan in
order to protect against offers to acquire us that our Board of Directors
believes to be inadequate or not otherwise in our best interests. There are,
however, certain possible disadvantages to having the Plan in place, which might
adversely impact us. The existence of the Plan may limit our flexibility in
dealing with potential acquirers in certain circumstances and may deter
potential acquirers from approaching us. Further, as a result of the April 14,
2004 restructuring, on a fully diluted basis, the executive officers and
directors of the Company will own 61.7% of the Company's common stock on a fully
diluted basis (excluding out-of-the-money stock options) and Paribas and Exeter
collectively will own 45.6% of the Company's common stock on a fully diluted
basis (excluding out-of-the-money stock options). (Note: The sum of individual
beneficial ownership percentages can exceed 100% due to the nature of the
calculation which assumes total outstanding shares and the exercise of all
convertible instruments for any individual shareholder without regard to
exercise of similar instruments by any other shareholder.) Such concentration of
ownership may also deter potential acquirers from approaching us.




                                       10
<PAGE>

Item 2.  Properties

         As of December 31, 2003, the Company operated from 67 leased facilities
(not including 34 customer-owned facilities). These facilities are principally
used for operations, general and administrative functions and training. In
addition, several facilities also contain storage and warehouse space. The table
below summarizes the location of the Company's current leased facilities.

State                                                Number of Leased Facilities
-----                                                ---------------------------
New York..........................................                19
Florida...........................................                 8
California........................................                 7
New Jersey........................................                 6
Maine.............................................                 3
North Carolina....................................                 3
Louisiana.........................................                 2
Ohio..............................................                 2
Oklahoma..........................................                 2
Pennsylvania......................................                 2
Tennessee.........................................                 2
Indiana...........................................                 1
Massachusetts.....................................                 1
South Carolina....................................                 1
Washington........................................                 1
Arkansas..........................................                 1
Connecticut.......................................                 1
Georgia...........................................                 1
Maryland..........................................                 1
New Hampshire.....................................                 1
Texas.............................................                 1
Vermont...........................................                 1
                                                            ---------------
      Total                                                        67

         The Company's corporate headquarters is located at 80 Wesley Street,
South Hackensack, New Jersey. The Company believes that its properties are
generally well maintained, in good condition and adequate for its present needs.
Furthermore, the Company believes that suitable additional or replacement space
will be available when required.

         As of December 31, 2003, the Company owned or leased approximately 170
vehicles of various types, which are operated by drivers employed by the
Company. The Company also utilizes independent contractors who provide their own
vehicles and are required to carry at least the minimum amount of insurance
required by law.

         The Company's aggregate rental expense, primarily for facilities, was
approximately $6,973,000, for the year ended December 31, 2003. See Note 12 to
the Company's Consolidated Financial Statements.

                                       11
<PAGE>

Item 3.  Legal Proceedings

         In February 1996, Liberty Mutual Insurance Company ("Liberty Mutual")
filed an action against Securities Courier Corporation ("Securities"), a
subsidiary of the Company, Mr. Vincent Brana, an employee of the Company, and
certain other parties in the United States District Court for the Southern
District of New York. Under the terms of its acquisition of Securities, the
Company had certain rights to indemnification from Mr. Brana. In connection with
the indemnification, Mr. Brana has entered into a settlement agreement and
executed a promissory note (the "Brana Note") in such amount as may be due for
any defense costs or award arising out of this suit. Mr. Brana had agreed to
repay the Company on December 1, 2003, together with interest calculated at a
rate per annum equal to the rate charged the Company by its senior lender. Mr.
Brana delivered 357,301 shares of CD&L common stock to the Company as collateral
for the Brana Note. On September 8, 2000 the parties entered into a settlement
agreement in which Securities and Mr. Brana agreed to pay Liberty Mutual
$1,300,000. An initial payment of $650,000 was made by Securities on October 16,
2000, $325,000 plus interest at a rate of 10.5% per annum was paid in monthly
installments ending July 1, 2001 and the balance of $325,000 plus interest at a
rate of 12.0% per annum was paid in monthly installments ending July 1, 2002.

         At December 31, 2002, the Company had a receivable due from Mr. Brana
totaling $2,800,000. As of December 31, 2002, considering the market value of
the collateral and Mr. Brana's failure to provide satisfactory evidence to
support his ability to pay the Brana Note, the Company maintained a $2,800,000
reserve against the receivable.

         In an effort to resolve all outstanding disputes between Mr. Brana and
the Company, a settlement agreement was executed in December 2003. Pursuant to
the agreement, the Company has returned to Mr. Brana the 357,301 shares of CD&L
common stock previously held by the Company as collateral for the Brana Note. In
addition, the agreement provided for an exchange of releases between the
parties. In connection with this agreement, the Brana Note was written off as of
December 31, 2003. Mr. Brana's employment with the Company terminated on
September 1, 2002 and he has served as a paid consultant since that time.

         The Company is, from time to time, a party to litigation arising in the
normal course of its business, most of which involves claims for uninsured
personal injury and property damage incurred in connection with its same-day
delivery operations. In connection therewith, the Company has recorded reserves
of $885,000 and $325,000 as of December 31, 2003 and 2002, respectively.

         Also from time to time, federal and state authorities have sought to
assert that independent contractors in the transportation industry, including
those utilized by us, are employees rather than independent contractors. We
believe that the independent contractors that we utilize are not employees under
existing interpretations of federal and state laws. However, federal and state
authorities have and may continue to challenge this position. Further, laws and
regulations, including tax laws, and the interpretations of those laws and
regulations, may change.

         Management believes that none of these actions, including the actions
described above, will have a material adverse effect on the consolidated
financial position or results of operations of the Company.

Item 4. Submission of Matters to a Vote of Security Holders

         Not applicable.

                                       12
<PAGE>

                                     PART II

Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

         The Company's Common Stock has been trading on the American Stock
Exchange under the symbol "CDV" since February 23, 1999. The following table
sets forth the high and low closing sales prices for the Common Stock for 2002
and 2003.

         2002                             Low                High
         ----                             ---                ----
         First Quarter                   $0.38              $0.61
         Second Quarter                  $0.44              $0.70
         Third Quarter                   $0.40              $0.58
         Fourth Quarter                  $0.46              $0.62


         2003                             Low                High
         ----                             ---                ----
         First Quarter                   $0.48              $0.59
         Second Quarter                  $0.34              $0.55
         Third Quarter                   $0.44              $0.94
         Fourth Quarter                  $0.65              $1.06

         On April 7, 2004, the last reported sale price of the Common Stock was
$0.99 per share. As of April 7, 2004, there were approximately 272 shareholders
of record of Common Stock.

Dividends

         The Company has not declared or paid any dividends on its Common Stock.
The Company currently intends to retain earnings to support its growth strategy
and does not anticipate paying dividends in the foreseeable future. Payment of
future dividends, if any, will be at the discretion of the Company's Board of
Directors after taking into account various factors, including the Company's
financial condition, results of operations, current and anticipated cash needs
and plans for expansion. The Company's ability to pay cash dividends on the
Common Stock is also limited by the terms of its revolving credit facility and
the new Senior Subordinated Convertible Notes. See Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources.

                                       13
<PAGE>

Item 6.  Selected Financial Data

         The selected consolidated financial data set forth below as of and for
the years ended December 31, 2002 and 2003 is derived from our audited
consolidated financial statements, which are included elsewhere herein. The
selected consolidated financial data set forth below for the year ended December
31, 2001, which are included herein, and for the years ended December 31, 1999
and 2000 and as of December 31, 1999, 2000, and 2001, which are not included
herein, are derived from our consolidated financial statements audited by Arthur
Andersen LLP, independent public accountants who have ceased operations. The
selected consolidated financial data set forth below should be read in
conjunction with the consolidated financial statements and related notes thereto
and with Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations included elsewhere in this report.


                             SELECTED FINANCIAL DATA
                    (In thousands, except per share amounts)

Statement of Operations Data:

<TABLE>
<CAPTION>
                                                                  CD&L, Inc. and Subsidiaries (1)
                                      -----------------------------------------------------------------------------------------
                                                                   For The Year Ended December 31,
                                      -----------------------------------------------------------------------------------------
                                         1999               2000               2001              2002                2003
                                      ------------      -------------      -------------     --------------     ---------------
<S>                                   <C>               <C>                <C>               <C>                <C>
Revenue                                $158,380          $170,079           $160,544          $157,232           $166,083
Gross profit                             35,175            34,463             32,704            30,080             32,735
Selling, general and
  administrative expenses                27,123            33,978             26,881            25,492             28,136
Goodwill impairment                           -                 -              3,349                 -                  -
Depreciation and amortization             3,672             3,355              2,476             1,173                756
Other expense (income), net                  80             2,438              4,685               206             (1,496)
Interest expense                          2,731             3,060              2,897             2,734              2,534
Income (loss) from
  continuing operations                     950            (6,229)            (5,804)              285              1,683
Discontinued operations:
  Income from discontinued
    operations, net of income
    taxes                                 1,961             1,388                  -                 -                  -
  Provision for loss on
    disposal of assets, net
    of income taxes                           -            (2,807)              (465)                -                  -
Net income (loss)                        $2,911           ($7,648)           ($6,269)             $285             $1,683
Basic income (loss) per
  share:
  -Continuing operations                   $.13             ($.84)             ($.76)             $.04               $.22
  -Discontinued operations                  .27              (.19)              (.06)                -                  -
                                      ------------      -------------      -------------     --------------     ---------------
  -Net income (loss)                       $.40            ($1.03)             ($.82)             $.04               $.22
                                      ============      =============      =============     ==============     ===============
Diluted income (loss) per share:
  -Continuing operations                   $.12             ($.84)             ($.76)             $.03               $.21
  -Discontinued operations                  .25              (.19)              (.06)             -                  -
                                      ------------      -------------      -------------     --------------     ---------------
  -Net income (loss)                       $.37            ($1.03)             ($.82)             $.03               $.21
                                      ============      =============      =============     ==============     ===============
Basic weighted average shares
 outstanding                              7,214             7,430              7,659             7,659              7,659
Diluted weighted average
 shares outstanding                       7,868             7,430              7,659             8,167              8,174

Balance Sheet Data:                                               CD&L, Inc. and Subsidiaries (1)
                                      -----------------------------------------------------------------------------------------
                                                                            December 31,
                                      -----------------------------------------------------------------------------------------
                                         1999               2000               2001               2002               2003
                                      ------------      --------------     -------------      -------------     ---------------

Working capital (deficit)                $5,989           ($3,430)            $4,923            $2,869             $1,807
Equipment and leasehold
   improvements, net                      4,321             2,841              1,961             1,233              1,446
Goodwill and other intangible
   assets, net                           22,375            20,666             12,252            12,192             11,968
Total assets                             62,513            57,785             35,481            33,821             40,352
Total debt                               32,353            34,686             20,595            17,483             20,137
Stockholders' equity                    $17,369            $9,884             $3,615            $3,900             $5,583

</TABLE>

(1)  During 2000, the Company discontinued its air operations and subsequently
     disposed of them in 2001. Accordingly, the operating results and loss on
     disposition of the air delivery business have been classified as
     discontinued operations for the periods presented.

                                       14
<PAGE>


Item 7.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Disclosure Regarding Forward-Looking Statements.

         The Company is provided a "safe harbor" for forward-looking statements
contained in this report by the Private Securities Litigation Reform Act of
1995. The Company may discuss forward-looking information in this Report such as
its expectations for future performance, growth and acquisition strategies,
liquidity and capital needs and its future prospects. Actual results may not
necessarily develop as the Company anticipates due to many factors including,
but not limited to the timing of certain transactions, unexpected expenses
encountered, the effect of economic and market conditions, the impact of
competition and the factors listed in Item 1. Business Description - Risk
Factors. Because of these and other reasons, the Company's actual results may
vary materially from management's current expectations.

Overview

         The consolidated financial statements of the Company including all
related notes, which appear elsewhere in this report, should be read in
conjunction with this discussion of the Company's results of operations and its
liquidity and capital resources.

2004 Restructuring of Senior Notes Debt

At December 31, 2003, the Company was indebted to Paribas and Exeter
(collectively "Paribas") in the sum of approximately $11,000,000 pursuant to a
subordinated note bearing interest at 12% per annum (see Senior Notes in Note
9). On April 14, 2004, an agreement was reached among the Company, Paribas and
certain members of CD&L management and others ("Investors") as to the financial
restructuring of the Senior Notes. Paribas agreed to convert a portion of its
existing debt due from CD&L into equity and to modify the terms of its
subordinated note if the Investors purchase a portion of the note and accept
similar modifications. The nature of the restructuring is as follows:

         (a)      Paribas exchanged notes in the aggregate principal amount of
                  $4.0 million for shares of the Series A Convertible Redeemable
                  Preferred Stock of the Company, par value $.001 per share
                  ("Preferred Stock") with a liquidation preference of $4.0
                  million. The Preferred Stock is convertible into an aggregate
                  of 4,000,000 shares of Common Stock, does not pay dividends
                  (unless dividends are declared and paid on the Common Stock),
                  and is redeemable by the Company for the liquidation value.
                  Holders of the Preferred Stock will have the right to elect
                  two directors.

         (b)      Paribas and the Company amended the terms of the $7.0 million
                  balance of the Notes, and then exchanged the original notes
                  for the amended and restated notes, which consist of two
                  series of convertible notes, the Series A Convertible
                  Subordinated Notes (the "Series A Converible Notes") in the
                  principal amount of $3.0 million and the Series B Convertible
                  Subordinated Notes ("Series B Convertible Notes") in the
                  principal amount of $4.0 million (collectively, the
                  "Convertible Notes"). The Loan Agreement was amended and
                  restated to reflect the terms of the substituted Series A
                  Convertible Notes and the Series B Convertible Notes,
                  including the elimination of most financial covenants.
                  Principal is due in a balloon payment at the maturity date of
                  April 14, 2011. The Convertible Notes bear interest at a rate
                  of 9% for the first two years of the term, 10.5% for the next
                  two years, and 12% for the final three years of the term. The
                  terms of the two series of Convertible Notes are identical
                  except for the conversion price ($1.016 for the Series A
                  Convertible Notes, the average closing price for the Company's
                  shares for the 5 days prior to the closing, and $2.032 for the
                  Series B Convertible Notes).

         (c)      The Investors purchased the Series A Convertible Notes from
                  Paribas for a purchase price of $3.0 million.

         (d)      The Company issued an additional $1.0 million of Series A
                  Convertible Notes to the Investors for an additional payment
                  of $1.0 million, the proceeds of which were used to reduce
                  short-term debt.

                                       15
<PAGE>

         (e)      The Investors, Paribas and the Company entered into a
                  Registration Rights Agreement pursuant to which the shares of
                  the Company's common stock issuable upon conversion of the
                  Preferred Stock and the Convertible Notes will be registered
                  for resale with the Securities and Exchange Commission.

In addition, the Company has agreed to commence a rights offering to its common
stockholders as soon as practical, and in any event prior to January 14, 2005,
whereby the common shareholders of the Company shall have the right to acquire
at least $2 million of additional shares of common stock of the Company in the
aggregate at a price equal to the conversion price of the Series A Convertible
Notes.

The following summarized unaudited pro forma financial information was prepared
assuming that the restructuring of the Senior Notes debt occurred on December
31, 2003 (in thousands):

<TABLE>
<CAPTION>
                                                                  As Reported           Adjustment             Pro Forma
                                                             -----------------------  ---------------       ----------------
<S>                                                          <C>                      <C>                   <C>
Total assets                                                     $40,234                       $-               $40,234
                                                             =======================  ===============       =================

Liabilities
   Current liabilities
      Short-term borrowings                                        5,767                   (1,000)   (a)          4,767
      Current maturities of long-term debt                         2,585                   (1,000)   (a)          1,585
      Accounts payable and accrued liabilities                    14,201                     (151)   (b)         14,050
                                                             -----------------------  ---------------       -----------------
      Total current liabilities                                   22,553                   (2,151)               20,402
                                                             -----------------------  ---------------       -----------------
   Long-term liabilities
      Long-term debt                                              11,785                   (1,624)   (a)(b)      10,161
      Other long-term liabilities                                    313                        -                   313
                                                             -----------------------  ---------------       -----------------
   Total liabilities                                              34,651                   (3,775)               30,876
                                                             -----------------------  ---------------       -----------------

Stockholders' equity
   Preferred stock                                                     -                    4,000    (a)          4,000
   Common stock                                                        8                        -                     8
   Additional paid-in capital                                     12,883                        -                12,883
   Treasury stock                                                   (162)                       -                  (162)
   Accumulated deficit                                            (7,146)                    (225)   (b)         (7,371)
                                                             -----------------------  ---------------       -----------------
   Total stockholders' equity                                      5,583                    3,775                 9,358
                                                             -----------------------  ---------------       -----------------

Total liabilities and stockholders' equity                       $40,234                       $-               $40,234
                                                             =======================  ===============       =================
</TABLE>

(a)      Represents the initial entry to record the restructuring: (i) the
         conversion of $4,000,000 of long-term debt into Preferred Stock, (ii)
         the issuance of $4,000,000 of long-term debt to Investors, and (iii)
         the repayment of $1,000,000 of current maturities of long-term debt and
         $2,000,000 of long-term debt related to the original Paribas Senior
         Notes.

(b)      Represents the write-off of the unamortized debt discount balance of
         $376,000 as of December 31, 2003 related to the original Senior Notes
         and the related tax effect.

The Company has reviewed SFAS 150 with respect to this transaction and has
determined that the Preferred Shares issued are properly treated as equity, as
the shares are not mandatorily redeemable at any time. As the interest on the
Investor Notes and the new Paribas note increase over the term of the notes, the
Company will record the associated interest expense on a straight-line basis,
which will give rise to accrued interest over the early term of the notes.

                                       16
<PAGE>

Discontinued Operations

         On December 1, 2000, we made a strategic decision to dispose of our air
delivery business and accordingly have restated the accompanying balance sheets,
statements of operations and statements of cash flows to reflect such as
discontinued operations. On March 30, 2001, we consummated a transaction
providing for the sale of certain assets and liabilities of Sureway Air Traffic
Corporation, Inc. ("Sureway"), our air delivery business. The selling price for
the net assets was approximately $14,150,000 and was comprised of $11,650,000 in
cash, a subordinated promissory note (the "Sureway Note Receivable") for
$2,500,000 and contingent cash payments based upon the ultimate development of
certain liabilities retained by us. The Sureway Note Receivable originally bore
interest at the rate of 10.0% per annum, with interest only payable in monthly
installments. The entire balance of principal, plus all accrued interest, was
due and payable on March 30, 2006. As of December 31, 2001 collection of the
Sureway Note Receivable, interest accrued thereon and certain other related
receivables was in doubt. Accordingly, the Company recorded a pre-tax charge of
$2,500,000 (included in other (income) expense, net) in the fourth quarter of
2001 to write-off the Sureway Note Receivable. Additionally, the Company
recorded a pre-tax charge of $705,000 (included in Discontinued Operations) in
the fourth quarter of 2001 to write-off certain other direct expenses incurred
on behalf of Sureway subsequent to March 30, 2001 for which collection was in
doubt and to true-up certain accruals that were estimated in 2000 relative to
the disposition of Sureway.

         The Company reported a net loss on the disposition of the Company's air
delivery business of $465,000 (net of benefit for income taxes of $240,000)
accounted for as discontinued operations for the year ended December 31, 2001.

         In February 1999, the Company became obligated for seller-financed
acquisition debt of $1,650,000 related to the acquisition of Gold Wings (See
Note 4 of Notes to Consolidated Financial Statements). As of February 28, 2003,
the note had a remaining principal balance of $1,034,000 (the "CDL/Gold Note").
On February 28, 2003, the Company completed a series of related transactions
with GMV Express, Inc. ("GMV"), Richard Gold (a principal of GMV) ("Gold") and
his affiliates, and Global Delivery Systems LLC ("Global") and its subsidiary,
Sureway Worldwide LLC ("Sureway Worldwide"). The net effect of the transactions
with Global, Sureway Worldwide, GMV and Gold was that the Company assigned the
Sureway Note Receivable to GMV in exchange for a release on the CDL/Gold Note
payable, so that the Company was relieved of its $1,034,000 liability for the
CDL/Gold Note and the Company has no further rights to the Sureway Note
Receivable. In addition, the Company received payments from Sureway Worldwide
and Global of approximately $117,000 ($72,000 in settlement of disputed claims
and $45,000 for other amounts due) and provided Gold with a release covering
claims of breach of certain non-competition agreements. As a result of this
transaction, the Company recorded a gain of $1,034,000 during the year ended
December 31, 2003.

Critical Accounting Policies and Estimates

         The Company's discussion and analysis of financial condition and
results of operations are based upon the Company's consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States of America. The preparation of these
financial statements requires the Company to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. On an ongoing basis,
the Company evaluates its estimates, including those related to accounts and
notes receivable, intangible assets, insurance reserves, income taxes and
contingencies. The Company bases its estimates on historical experience and on
various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates under different
assumptions or conditions.

         The Company believes the following critical accounting policies reflect
more significant judgments and estimates used in the preparation of its
consolidated financial statements.

         Allowance for Doubtful Accounts
         The Company maintains allowances for doubtful accounts and notes
receivable for estimated losses resulting from the inability of its customers
and debtors to make payments when due or within a reasonable period of time
thereafter. The Company estimates allowances for doubtful accounts and notes
receivable by evaluating past due aging trends, analyzing customer payment
histories and assessing market conditions relating to its customers operations
and financial condition. Such allowances are developed principally for specific
customers. As of December 31, 2003, the Company has estimated that an allowance
for doubtful accounts of $872,000 is needed to cover the current receivable
base. As a result of this estimate, the Company recorded $629,000 of expense in
2003 related to the provision for doubtful accounts. If the financial condition
of the Company's customers and debtors were to deteriorate, resulting in an
impairment of their ability to make required payments, additional allowances may
be required.

         Revenue Recognition
         Revenue is recognized when pervasive evidence of an arrangement exists,
the price to the customer is fixed or determinable and collectibility is
reasonably assured. The Company interprets the timing of revenue recognition to
be when services are rendered to customers, and expenses are recognized as
incurred. This policy applies to all of the Company's same-day, time-critical
delivery service options, including Rush, Scheduled, Facilities Management and
Dedicated Contract Logistics. Certain customers pay in advance, giving rise to
deferred revenue. This policy is consistent with prior years and as such, the
increase in revenue from 2002 relates solely to additional sales volume.

                                       17
<PAGE>

         Goodwill
         The value of the Company's goodwill is significant relative to total
assets and stockholders' equity. The Company reviews goodwill for impairment on
at least an annual basis using several fair-value based tests, which include, a
discounted cash flow and terminal value computation, market capitalization and
peer group equity transactions. The discounted cash flow and terminal value
computation is based on management's estimates of future operations. During
2003, an annual impairment test was performed and the Company determined that
there was no impairment of goodwill. As such, there was no impact on the 2003
statement of operation related to goodwill. Changes in business conditions could
materially impact management's estimates of future operations and this could
result in an impairment of goodwill. Such impairment, if any, could have a
significant impact on the Company's operations and financial condition. Examples
of changes in business conditions include, but are not limited to, bankruptcy or
loss of a significant customer, a significant adverse change in regulatory
factors, a loss of key personnel, increased levels of competition from companies
with greater financial resources than the Company and margin erosion caused by
our inability to increase prices to our customers at the same rate that our
costs increase.

         Insurance Reserves
         The Company insures certain of its risks through insurance policies,
but retains risk as a result of its deductibles related to such insurance
policies. The Company's deductible for workers' compensation is $500,000 per
loss ($350,000 prior to May 1, 2003). The deductible for employee health medical
costs is $150,000 per loss ($125,000 prior to March 1, 2002). Effective July 1,
2003, automobile liability coverage is maintained for covered vehicles through a
fully-insured indemnity program with no deductible ($350,000 deductible prior to
July 1, 2003). The Company reserves the estimated amounts of uninsured claims
and deductibles related to such insurance retentions for claims that have
occurred in the normal course of business. These reserves are established by
management based upon the recommendations of third-party administrators who
perform a specific review of open claims, which include fully developed
estimates of both reported claims and incurred but not reported claims, as of
the balance sheet date. Actual claim settlements may differ materially from
these estimated reserve amounts. The Company's estimated cumulative reported
losses for workers' compensation and automobile liability claims for the period
January 1, 1999 through December 31, 2003 amounted to $13,844,000 for losses and
$7,363,000 for administrative and reinsurance costs, all of which has been
funded to the Company's insurance carrier. Additionally, as of December 31,
2003, the Company has accrued approximately $2 million for estimated losses
incurred but not reported. The Company has also accrued $372,000 for incurred
but unpaid employee health medical costs as of December 31, 2003.

         Income Taxes
         The Company files income tax returns in every jurisdiction in which it
has reason to believe it is subject to tax. Historically, the Company has been
subject to examination by various taxing jurisdictions. To date, none of these
examinations has resulted in any material additional tax. Nonetheless, any tax
jurisdiction may contend that a filing position claimed by the Company regarding
one or more of its transactions is contrary to that jurisdiction's laws or
regulations. The Company utilizes a tax rate of 40% in all years presented in
the statements of operations.

                                       18
<PAGE>

Results of Operations 2003 Compared with 2002

The following discussion compares the year ended December 31, 2003 and the year
ended December 31, 2002.

Income and Expense as a Percentage of Revenue

                                                   For the Years Ended
                                                       December 31,
                                               -----------------------------
                                                  2003             2002
                                               ------------     ------------

         Revenue                                  100.0%           100.0%

         Gross profit                              19.7%            19.1%

         Selling, general and
            administrative expenses                16.9%            16.2%
         Depreciation and amortization              0.5%             0.7%
         Other (income) expense, net               (0.9%)            0.1%
         Interest expense                           1.5%             1.7%

         Net income                                 1.0%             0.2%

Revenue
Revenue for the year ended December 31, 2003 increased by $8,851,000, or 5.6%,
to $166,083,000 from $157,232,000 for the year ended December 31, 2002. An
increase in volume from new and existing customers contributes to such revenue
increase, partially offset by certain price reductions granted to extend
customer contracts. The revenue growth reflects the launch of our nationwide
business development program and our ability to expand into new markets with our
existing customer base.

Cost of Revenue
Cost of revenue consists primarily of employee and independent contractor
delivery costs, other direct pick-up and delivery costs and the costs of
dispatching drivers and messengers. These costs increased by $6,196,000, or
4.9%, from $127,152,000 for 2002 to $133,348,000 in 2003. Stated as a percentage
of revenue, these costs decreased to 80.3% for 2003 compared to 80.9% for 2002.
The decrease in cost of revenue stated as a percentage of revenue is due
primarily to increased utilization of independent contractors. While the cost of
this labor is more expensive (delivery costs increased by 2.6% as a percentage
of revenue), workers compensation insurance costs and company delivery vehicle
expenses have decreased by 2.3% and 1.1% as a percentage of revenue,
respectively. The decrease in insurance costs is partially attributable to the
change in auto liability coverage to a fully-insured indemnity program in July
2003. This net reduction in cost of sales as a percentage of revenue is
partially offset by additional cargo claims of approximately $800,000.

Selling, General and Administrative Expense ("SG&A")
SG&A includes costs to support the Company's marketing and sales effort and the
expense of maintaining information systems, human resources, financial, legal
and other corporate administrative functions. SG&A increased by $2,644,000, or
10.4%, from $25,492,000 in 2002 to $28,136,000 in 2003. As a percentage of
revenue, SG&A increased to 16.9% in 2003 compared to 16.2% of revenue in 2002.
The increase in SG&A is due primarily to the following factors:

         o        A $794,000 increase in the provision for doubtful accounts.
                  Refer to the "Liquidity and Capital Resources" section of Item
                  7. of this Annual Report for discussion of the increased
                  accounts receivable balance at December 31, 2003.

         o        A $672,000 increase in professional fees, primarily related to
                  an increase in the legal accrual related to certain unresolved
                  claims.

         o        A $516,000 increase in premises rent due to the addition of 13
                  leased facilities during 2003.

         o        Additional increases in SG&A are primarily attributable to an
                  increase in property and corporate umbrella insurance costs,
                  office maintenance and expenses, data communications, computer
                  costs and other indirect expenses.

                                       19
<PAGE>

         o        The above factors are partially offset by a $861,000 reduction
                  in compensation expense which includes reduced staffing, lower
                  incentive compensation and the reversal of previously recorded
                  severance benefits.

Depreciation and Amortization
Depreciation and amortization decreased by $417,000, or 35.5%, from $1,173,000
for 2002 to $756,000 for 2003. Factors driving such reduction include the full
depreciation of certain computer equipment and vehicles, coupled with reduced
capital expenditures in 2001 and 2002.

Other (Income) Expense, Net
Other (income) expense, net had a net change of $1,702,000, to $1,496,000 of
income in 2003 from $206,000 of expense in 2002. The Company recorded a gain
included in other (income) expense, net of $1,034,000 during the year ended
December 31, 2003 as a result of the exchange of the Sureway Note Receivable
discussed elsewhere herein. Also included in other income for 2003 is a $220,000
World Trade Center Recovery Grant received by one of the Company's New York City
facilities and $149,000 of interest income on the Mid-West note receivable
discussed in Note 4. The expense in 2002 related to a $300,000 increase in the
allowance for the shareholder note receivable.

Interest Expense
Interest expense decreased by $200,000 from $2,734,000 in 2002 to $2,534,000 in
2003. This decrease was primarily due to the extinguishment of the CDL/Gold Note
in the first quarter of 2003 and the reduction of interest rates on certain
seller-financed debt which was renegotiated in April 2002.


Results of Operations 2002 Compared with 2001

The following discussion compares the year ended December 31, 2002 and the year
ended December 31, 2001, for continuing operations.

Income and Expense as a Percentage of Revenue

                                                      For the Years Ended
                                                          December 31,
                                                  -----------------------------
                                                     2002             2001
                                                  ------------     ------------

         Revenue                                    100.0%           100.0%

         Gross profit                                19.1%            20.4%

         Selling, general and
            administrative expenses                  16.2%            16.7%
         Goodwill Impairment                          0.0%             2.1%
         Depreciation and amortization                0.7%             1.5%
         Other expense, net                           0.1%             2.9%
         Interest expense                             1.7%             1.8%

         Income (loss) from continuing
           operations                                 0.2%           (3.6)%

Revenue
Revenue for the year ended December 31, 2002 decreased $3,312,000, or 2.1%, to
$157,232,000 from $160,544,000 for the year ended December 31, 2001. The
decrease included approximately $4,500,000 in lost revenue due to the sale of
the Company's Mid-West operations on June 14, 2001. All other revenue increased
by $1,188,000, or 0.8%.

Cost of Revenue
Cost of revenue consists primarily of employee and independent contractor
delivery costs, other direct pick-up and delivery costs and the costs of
dispatching drivers and messengers. These costs decreased $688,000, or 0.5%,
from $127,840,000 for 2001 to $127,152,000 in 2002. Stated as a percentage of
revenue, these costs increased to 80.9% for 2002 compared to 79.6% for 2001.
Excluding the $3,592,000 reduction due to the sale of the Company's Mid-West
operations, cost of revenue increased $2,904,000 or 2.3%. This reflects
increased direct messenger and driver costs of $6,352,000 and higher workers'
compensation and vehicle insurance of $442,000. These cost increases were
partially offset by the favorable impact on vehicle lease and operating costs of
$3,433,000 due to a reduction in Company owned vehicles and decreased uninsured
product-related claims and other costs of $457,000.

                                       20
<PAGE>

Selling, General and Administrative Expense ("SG&A")
SG&A includes costs to support the Company's marketing and sales effort and the
expense of maintaining information systems, human resources, financial, legal
and other corporate administrative functions. SG&A decreased by $1,389,000, or
5.2%, from $26,881,000 in 2001 to $25,492,000 in 2002. As a percentage of
revenue SG&A decreased to 16.2% in 2002 compared to 16.7% of revenue in 2001.
Excluding the $690,000 decrease due to the sale of the Company's Mid-West
operations, SG&A decreased $699,000 or 2.7%. SG&A expense was favorably impacted
by reduced staffing costs of $637,000, lower facility and communication costs of
$451,000, lower bad debt expense of $286,000 and $183,000 in grants received
related to the events of September 11, 2001. These were partially offset by
increased general insurance expenses of $464,000 and net increases of $394,000
of other expense.

Goodwill Impairment
There was no goodwill impairment for 2002 compared to $3,349,000 for 2001. The
charge taken in 2001 was the result of a comprehensive review of the Company's
intangible assets under the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived Assets
and Long-Lived Assets to be Disposed Of" ("SFAS 121"). In 2001, as a result of
recording significant losses on the dispositions of Sureway and the Mid-West
operations and as a result of inadequate cash flows from certain acquired
businesses due to the loss of customers, the Company determined that the
carrying amount of certain assets might not be fully recoverable. The
measurement of impairment losses recognized in 2001 is based on the difference
between the fair values, which were calculated based upon the present value of
projected future cash flows, and the carrying amounts of the assets.

Depreciation and Amortization
Depreciation and amortization decreased by $1,303,000, or 52.6%, from $2,476,000
for 2001 to $1,173,000 for 2002. The decrease was primarily attributable to the
adoption of SFAS 142, as discussed below. In addition, other factors driving
such reduction were the full depreciation of certain vehicles held under a
capital lease that ended during 2001 and reduced capital expenditures in 2000,
2001 and 2002. On June 30, 2001, SFAS No. 142, "Goodwill and Other Intangible
Assets" ("SFAS 142") was issued. SFAS 142 eliminates goodwill amortization over
its estimated useful life. However, goodwill is subject to at least an annual
assessment for impairment by applying a fair-value based test. Additionally,
acquired intangible assets must be separately recognized if the benefit of the
intangible asset is obtained through contractual or other legal rights, or if
the intangible asset can be sold, transferred, licensed, rented or exchanged,
regardless of the acquirer's intent to do so. Intangible assets with definitive
lives are amortized over their useful lives. The statement requires that by June
30, 2002, a company must establish its fair value benchmarks in order to test
for impairment. The Company adopted SFAS 142 effective January 1, 2002. For
purposes of performing the fair-value based test of goodwill, the Company has
determined that it has one reporting unit. This reporting unit is consistent
with its single operating segment, which management determined is appropriate
under the provisions of SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS 131"). During 2002, a transitional
goodwill impairment test was performed and the Company determined that there was
no impairment of goodwill. Further, as required by SFAS 142, an annual
impairment test was completed at the end of fiscal 2002 and the Company
determined that there was no impairment. Fair value was determined by two
methods:

         1. Present value of future estimated cash flows, including a
determination of a terminal value.


         2. Market capitalization utilizing quoted market prices of the
Company's common stock.


The adoption of SFAS 142 did not result in an impairment of goodwill. However,
changes in business conditions could result in an impairment in the future. Such
impairment, if any, could have a significant impact on the Company's operations
and financial condition. Examples of changes in business conditions include, but
are not limited to, bankruptcy or loss of a significant customer, a significant
adverse change in regulatory factors, a loss of key personnel, increased levels
of competition from companies with greater financial resources than the Company
and margin erosion caused by our inability to increase prices to our customers
at the same rate that our costs increase. Adoption of SFAS 142 increased pretax
earnings by approximately $738,000 for the year ended December 31, 2002 due to
the cessation of goodwill amortization.

                                       21
<PAGE>

Other Expense
Other expense decreased by $4,479,000, to $206,000 in 2002 from $4,685,000 in
2001. The 2002 expense includes a $300,000 increase in the allowance for the
shareholder note receivable. The 2001 expense is primarily due to two
transactions. As of December 31, 2001, the Company wrote-off the Sureway Note
Receivable received on March 30, 2001 amounting to $2,500,000 in the transaction
to dispose of certain assets and liabilities of Sureway, as collection of the
Sureway Note Receivable, interest accrued thereon and certain other related
receivables was in doubt. The Company also recorded a $2,283,000 loss on the
sale of all of the outstanding stock in National Express, Inc. (the Company's
ground courier operation in the Mid-West) to First Choice Courier and
Distribution, Inc. ("First Choice") on June 14, 2001. The selling price of the
stock was approximately $2,530,000 and was comprised of $880,000 in cash and a
subordinated promissory note (the "Promissory Note") for $1,650,000. The
Promissory Note originally bore interest at the rate of 7.0% per annum. The
Promissory Note, as amended on March 14, 2003, allows for the deferral of the
interest and principal payments due on December 14, 2002 and March 14, 2003. A
new quarterly payment schedule commenced on June 14, 2003 with interest only
payments at a new interest rate at 9.0% per annum. The final balloon payment of
approximately $1,100,000 plus any remaining principal or unpaid interest was to
be due on June 14, 2006. On March 1, 2004, the Promissory Note was cancelled in
connection with the repurchase of certain assets and liabilities of First
Choice. See Note 17 - Subsequent Events.

Interest Expense
Interest expense decreased by $163,000 from $2,897,000 in 2001 to $2,734,000 in
2002. The decrease is primarily attributable to decreased debt. Total debt was
$3,112,000 lower at December 31, 2002 compared to December 31, 2001. Principal
payments of $1,750,000 and $1,040,000 on the senior subordinated notes and
seller-financed debt, respectively, comprised the majority of the debt
reduction.


Liquidity and Capital Resources

2004 Restructuring of Senior Notes Debt

At December 31, 2003, the Company was indebted to Paribas and Exeter
(collectively "Paribas") in the sum of approximately $11,000,000 pursuant to a
subordinated note bearing interest at 12% per annum (see Senior Notes in Note
9). On April 14, 2004, an agreement was reached among the Company, Paribas and
certain members of CD&L management and others ("Investors") as to the financial
restructuring of the Senior Notes. Paribas agreed to convert a portion of its
existing debt due from CD&L into equity and to modify the terms of its
subordinated note if the Investors purchase a portion of the note and accept
similar modifications. See Notes to Consolidated Financial Statements Note 17 -
Subsequent Events for further discussion of the restructuring arrangement.

The following tables summarize our contractual and commercial obligations as of
December 31, 2003:


<TABLE>
<CAPTION>
                                                                          Payments Due By Period
                                               --------------------------------------------------------------------------------
 Contractual Obligations                                                                                 2008-
(in thousands)                                  2004           2005          2006         2007        Thereafter         Total
                                                ----           ----          ----         ----        ----------         -----
<S>                                            <C>           <C>         <C>           <C>            <C>            <C>
Long-term debt                                 $2,514        $1,760      $9,439(a)        $580             $-           $14,293

Capital leases                                    $72            $2          $2             $1             $-               $77

Operating leases (Primarily for                $3,615        $3,031      $2,280         $1,228           $660           $10,814
   facilities)

</TABLE>

(a) This information is as of December 31, 2003 and does not take into account
the April 14, 2004 financial restructuring.

                                       22
<PAGE>

Other Contractual Obligations:

The Company has entered into employment agreements with its key executives which
under certain change in control circumstances could result in a total cash
payments of as much as approximately $4 million. See Item 11. Employment
Agreements; Covenants-Not-To-Compete.


<TABLE>
<CAPTION>

                                                                    Amount of Commitment Expiration Per Period
                                            -----------------------------------------------------------------------------------
Other Commercial Commitments                                                                            2008-
(in thousands)                                  2004           2005          2006         2007        Thereafter      Total
                                                ----           ----          ----         ----        ----------      -----
<S>                                           <C>          <C>            <C>          <C>            <C>           <C>
Working Capital Facility                           $-       $15,000            $-           $-            $-        $15,000
(Including Standby Letters of Credit)

Standby Letter of Credit                       $6,515           (A)           (A)          (A)           (A)            (A)

</TABLE>

(A) The Company is required to provide a standby letter of credit per the terms
of its current captive insurance program. The values of future standby letters
of credit will vary depending on future insurance premiums.

         The Company's working capital decreased by $1,062,000 from $2,869,000
as of December 31, 2002 to $1,807,000 as of December 31, 2003. The decrease is
primarily the result of a $4,536,000 increase in short-term borrowings on the
Company's line of credit and additional accrued liabilities of $2,218,000 at
December 31, 2003. These factors are partially offset by a $3,977,000 increase
in accounts receivable, net and a $857,000 decrease in current maturities of
long-term debt.

         Cash and cash equivalents increased by $245,000 during 2003. Cash of
$2,396,000 was used in operating activities, primarily due to the prepayment of
$3,236,000 in insurance premiums during 2003 (see Insurance Financing
Arrangements below). Additional cash flow was used to support business growth
late in the year. Cash of $866,000 was used in investing activities, the
majority of which relates to the purchase and implementation of the Company's
new Peoplesoft financial system. Cash of $3,507,000 was provided by financing
activities as a result of the increased utilization of the Company's line of
credit.

         Capital expenditures amounted to $968,000, $522,000 and $333,000 for
the years ended December 31, 2003, 2002 and 2001, respectively. These
expenditures relate primarily to enhanced and expanded information systems
capability and upgraded Company facilities in the ordinary course of business.
In December 2003, $349,000 was expended in connection with the purchase and
implementation of the Company's new PeopleSoft financial system which went live
January 1, 2004. Capital expenditures of approximately $1,000,000 are
anticipated for the year ending December 31, 2004.

Short-term borrowings -

         At December 31, 2003, short-term borrowings totaled $5,767,000
consisting of a line of credit balance of $4,536,000 and $1,231,000 of
outstanding borrowings related to the insurance financing arrangements discussed
below. There were no short-term borrowings outstanding as of December 31, 2002.

                                       23
<PAGE>

         As of June 27, 2002 CD&L and Summit Business Capital Corporation, doing
business as Fleet Capital - Business Finance Division, entered into an agreement
establishing a revolving credit facility (the "Fleet Facility") of $15,000,000.
The Fleet Facility replaced a revolving credit facility with First Union
Commercial Corporation established in July 1997. The Company's short-term
borrowings on its line of credit are as follows for the years ended December 31
(in thousands) -

<TABLE>
<CAPTION>
                                                                          2003                2002                2001
                                                                          ----                ----                ----
<S>                                                                      <C>                 <C>                <C>
     Maximum amount outstanding during the year                          $5,618              $1,800             $11,500
     End of year balance                                                  4,536                -                   -
     Average balance outstanding during the year                          1,600                 300               2,700
     Weighted average borrowing cost during the year                      11.0%               11.0%               11.0%
     Standby letters of credit, end of year balance                       6,515               7,000               7,081
</TABLE>

         The Fleet Facility expires on June 27, 2005 and provides CD&L with
standby letters of credit, prime rate based loans at the bank's prime rate, as
defined, plus 25 basis points (4.25% at December 31, 2003) and LIBOR based loans
at the bank's LIBOR, as defined, plus 225 basis points (3.37% at December 31,
2003). Credit availability is based on eligible amounts of accounts receivable,
as defined, and is secured by substantially all of the assets, including certain
cash balances, accounts receivable, equipment, leasehold improvements and
general intangibles of the Company and its subsidiaries. During the year ended
December 31, 2003, the maximum borrowings outstanding under the Fleet Facility
were approximately $5,618,000 and the outstanding borrowings as of December 31,
2003 were approximately $4,536,000. As of December 31, 2003, the Company had
total cash on hand and borrowing availability of $2,697,000 under the Fleet
Facility, after adjusting for restrictions related to outstanding standby
letters of credit of $6,515,000 and minimum availability requirements.

         Under the terms of the Fleet Facility, the Company is required to
maintain certain financial ratios and comply with other financial conditions.
The Fleet Facility also prohibits the Company from incurring certain additional
indebtedness, limits certain investments, advances or loans and restricts
substantial asset sales, capital expenditures and cash dividends. The Company
was in compliance with its Fleet debt covenants as of December 31, 2003.

Insurance Financing Agreements -

         In connection with the renewal of certain of the Company's insurance
policies, CD&L entered into four agreements to arrange for the financing of
annual insurance premiums. A total of $3,236,000 was financed through these
arrangements. Monthly payments, including interest, amount to $328,000. The
interest rates range from 3.50% to 4.75% and the notes mature in March and April
2004. The related annual insurance premiums were paid to the various insurance
companies at the beginning of each policy year. Outstanding debt amounts at
December 31, 2003 of $1,231,000 are included in short-term borrowings. The
corresponding prepaid insurance has been recorded in prepaid expenses and other
current assets.

 Long-Term Debt -

         On January 29, 1999, the Company completed a $15,000,000 private
placement of senior subordinated notes and warrants (the "Senior Notes") with
three financial institutions. The Senior Notes originally bore interest at 12.0%
per annum and are subordinate to all senior debt including the Company's Fleet
Facility. Under the terms of the Senior Notes, as amended, the Company is
required to maintain certain financial ratios and comply with other financial
conditions contained in the Senior Notes agreement. Although we were in
compliance with our Senior Notes debt covenants at December 31, 2003, we were
anticipating non-compliance with certain covenants in 2004 and beyond.
Additionally, based on our cash flow projections, we would be unlikely able to
pay the $9,000,000 balloon payment on the Senior Notes due to be paid in January
2006. Subsequently, on April 14, 2004, we restructured our senior debt and
related covenants. The restructuring includes an agreement among us, our lenders
and certain members of CD&L management and others which improves the Company's
short-term liquidity and reduces interest expense. See Note 17 - Subsequent
Events for pro forma financial information.

                                       24
<PAGE>

Long-term debt consists of the following (in thousands)   -

<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                   --------------------------------------
                                                                                          2003                2002
                                                                                   -------------------  ------------------
<S>                                                                                <C>                  <C>
  Senior Subordinated Notes, net of unamortized discount of $377 and $557,
      respectively.                                                                           $10,623             $11,443
  Capital lease obligations due through October 2004 with interest at rates
      ranging from 6.5% to 11.5% and secured by the related property.                              76                 303
  Seller-financed debt on acquisitions, payable in monthly installments through
      June 2007. Interest is payable at rates ranging between 7.0% and 11.0%.
      (a)                                                                                       3,671               5,737
                                                                                   -------------------  ------------------

                                                                                               14,370              17,483
  Less - Current maturities                                                                    (2,585)             (3,442)
                                                                                   -------------------  ------------------

                                                                                              $11,785             $14,041
                                                                                   ===================  ==================
</TABLE>

(a)      In April 2002, the Company renegotiated the repayment terms of certain
         seller-financed debt. Effective with the July 2002 payments, the
         individual notes convert into five year term loans with principal and
         interest payments due monthly. The interest rate on seller-financed
         debt, as amended in 2002, is generally a floating interest rate with a
         floor of 7% and a ceiling of 9%. The one note not renegotiated in 2002
         has a balance of $761,000 at December 31, 2003 and bears interest at a
         rate of 11.0%.

         The aggregate annual principal maturities of debt (excluding capital
lease obligations) as of December 31, 2003 are as follows (in thousands) -

            2004                                   $2,514
            2005                                    1,760
            2006                                    9,439
            2007                                      580
            2008                                        -
                                             -------------------

              Total                               $14,293
                                             ===================

         The Company leases certain transportation and warehouse equipment under
capital lease agreements that expire at various dates. At December 31, 2003,
minimum annual payments under capital leases, including interest, are as follows
(in thousands) -

2004                                                                 $72
2005                                                                   2
2006                                                                   2
2007                                                                   1
2008                                                                   -

                                                                   ----------
  Total minimum payments                                              77
Less - Amounts representing interest                                  (1)
                                                                   ----------

  Net minimum payments                                                76
Less - Current portion of obligations under capital leases           (71)
                                                                   ----------

  Long-term portion of obligations under capital leases               $5
                                                                   ==========


         The Company has an accumulated deficit of ($7,146,000) as of December
31, 2003. There can be no assurances that the Company's lenders will agree to
waive any future covenant violations, if any, continue to renegotiate and modify
the terms of their loans, or further extend the maturity date, should it become
necessary to do so. Further, there can be no assurances that the Company will be
able to meet its revenue, cost or income projections, upon which the debt
covenants are based.

         Management believes that cash flows from operations and its borrowing
capacity, after the debt restructuring referred to above, are sufficient to
support the Company's operations and general business and capital requirements
for at least the next twelve months. Such conclusions are predicated upon
sufficient cash flow from operations and the continued availability of a
revolving credit facility. The risks associated with cash flow from operations
are mitigated by the Company's low gross profit margin. Unless extraordinary,
decreases in revenue should be accompanied by corresponding decreases in costs,
resulting in minimal impact to liquidity. The risks associated with the
revolving credit facility are as discussed above.

                                       25
<PAGE>

New Accounting Standards and Pronouncements

         In June 2002, SFAS No. 146, "Accounting for Costs Associated with Exit
or Disposal Activities" ("SFAS 146") was issued. This Statement addresses
financial accounting and reporting for costs associated with exit or disposal
activities. SFAS No. 146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is incurred. This
Statement also establishes that fair value is the objective for initial
measurement of the liability. The provisions of SFAS 146 are effective for exit
or disposal activities that are initiated after December 31, 2002. The adoption
of SFAS 146 is not expected to have a material impact on the financial position
or results of operations of the Company.

         In November 2002, Interpretation No. 45 of the Financial Accounting
Standards Board ("FASB"), "Guarantor's Accounting and Disclosure Requirements
for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN
45") was issued. FIN 45 requires certain guarantees to be recorded at fair value
and requires a guarantor to make significant new disclosures, even when the
likelihood of making any payments under the guarantee is remote. Generally, FIN
45 applies to certain types of financial guarantees that contingently require
the guarantor to make payments to the guaranteed party based on changes in an
underlying agreement that is related to an asset, liability, or an equity
security of the guaranteed party; performance guarantees involving contracts
which require the guarantor to make payments to the guaranteed party based on
another entity's failure to perform under an obligating agreement;
indemnification agreements that contingently require the guarantor to make
payments to an indemnified party based on changes in an underlying agreement
that is related to an asset, liability, or an equity security of the indemnified
party; or indirect guarantees of the indebtedness of others. The initial
recognition and initial measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002.
Disclosure requirements under FIN 45 are effective for financial statements
ending after December 15, 2002 and are applicable to all guarantees issued by
the guarantor subject to FIN 45's scope, including guarantees issued prior to
FIN 45. The Company has evaluated the accounting provisions of the
interpretations and there was no material impact on its financial condition,
results of operations or cash flows for the period ended December 31, 2002.

         In January 2003, Interpretation No. 46 of the FASB, "Consolidation of
Variable Interest Entities" ("FIN 46") was issued. The Company does not believe
that it has any relationships with variable interest entities that are subject
to the requirements of FIN 46.

         In April 2003, SFAS No, 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities" ("SFAS 149") was issued. This Statement
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under FASB Statement No. 133 "Accounting
for Derivative Instruments and Hedging Activities". The Company does not have
any derivative instruments or hedging activities that are subject to the
requirements of SFAS 149.

         In May 2003, SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity" ("SFAS 150")
was issued. This Statement establishes standards for how an issuer classifies
and measures certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability (or an asset in some
circumstances). As of December 31, 2003, the Company did not have any financial
instruments with characteristics of both liabilities and equity. The provisions
of SFAS 150 were followed in determining the equity classification of preferred
shares issued in relation to the debt restructuring as disclosed in the pro
forma financial information in Note 17 - Subsequent Events.

         In December 2003, FASB Interpretation No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities" ("Revised FIN 46") was issued. The
Company does not believe that it has any relationships with variable interest
entities that will be subject to the requirements of the Revised FIN 46.

         In December 2003, SFAS No. 132 (revised 2003), "Employers' Disclosures
about Pensions and Other Postretirement Benefits" ("Revised SFAS 132") was
issued. This Statement revises employers' disclosures about pension plans and
other postretirement benefit plans. The provisions of the Revised SFAS 132 is
effective for financial statements with fiscal years ending after December 15,
2003. The adoption of the Revised SFAS 132 is not expected to have a material
impact on the financial position or results of operations of the Company.

                                       26
<PAGE>

Inflation

         While inflation has not had a material impact on the Company's results
of operations for the last three years, recent fluctuations in fuel prices can
and do affect the Company's operating costs.


Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

         The Company is exposed to the effect of changing interest rates. At
December 31, 2003, the Company's debt consisted of approximately $13,069,000
(excluding unamortized discount of $377,000) of fixed rate debt with a weighted
average interest rate of 12.53% and $7,446,000 of variable rate debt with a
weighted average interest rate of 5.32%. The variable rate debt consists of six
seller-financed notes with an interest rate of prime plus 200 basis points with
a minimum rate of 7.0% and maximum rate of 9.0% and $4,536,000 of borrowings of
revolving line of credit debt. If interest rates on variable rate debt were to
increase by 53 basis points (one-tenth of the weighted average interest rate at
December 31, 2003), the net impact to the Company's results of operations and
cash flows for the year ended December 31, 2003 would be a decrease of
approximately $40,000. Maximum borrowings of revolving line of credit debt
during the year ended December 31, 2003 were $5,618,000.

                                       27
<PAGE>

Item 8.  Financial Statements and Supplementary Data


                          INDEX TO FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                                                                                              Page
                                                                                                              ----
<S>                                                                                                           <C>

Independent Auditors' Report....................................................................................29

Previously issued Report of Independent Public Accountants......................................................31

Consolidated Balance Sheets as of December 31, 2003 and 2002....................................................32

Consolidated Statements of Operations For The Years Ended December 31, 2003, 2002 and

    2001........................................................................................................33

Consolidated Statements of Changes in Stockholders' Equity For The Years Ended December 31,
    2003, 2002 and 2001.........................................................................................34

Consolidated Statements of Cash Flows For The Years Ended December 31, 2003, 2002 and

    2001........................................................................................................35

Notes to Consolidated Financial Statements......................................................................36

</TABLE>

                                       28
<PAGE>

                          INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Shareholders of CD&L, Inc.:


We have audited the accompanying consolidated balance sheets of CD&L, Inc. and
subsidiaries (the "Company") as of December 31, 2003 and 2002 and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the years then ended. Our audit also included the financial statement
schedule for the years ended December 31, 2003 and 2002, listed in the Index at
Item 15. These consolidated financial statements and the financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and
financial statement schedule based on our audits. The Company's consolidated
financial statements and financial statement schedule for the year ended
December 31, 2001, before the restatement discussed in Note 19 and the inclusion
of the disclosures discussed in Note 2 with respect to Statement of Financial
Accounting Standards ("SFAS") No. 148, Accounting for Stock-Based Compensation-
Transition and Disclosure and in Note 7 with respect to SFAS No.
142, Goodwill and Other Intangible Assets to the consolidated financial
statements were audited by other auditors who have ceased operations. Those
auditors expressed an unqualified opinion on those consolidated financial
statements and stated that such 2001 financial statement schedules, when
considered in relation to the 2001 basic consolidated financial statements taken
as a whole, presented fairly, in all material respects, the information set
forth therein, in their report dated February 26, 2002 (except with respect to
the matters discussed in Note 9, as to which the date is April 15, 2002).

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of CD&L, Inc. and subsidiaries as of
December 31, 2003 and 2002, and the results of their operations and their cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America. Also in our opinion, such
financial statement schedule for the years ended December 31, 2003 and 2002,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth
therein.

As discussed in Note 7 to the consolidated financial statements, in 2002 the
Company changed its method of accounting for goodwill and other intangible
assets to conform with SFAS No. 142.

As discussed above, the consolidated financial statements of the Company for the
year ended December 31, 2001, were audited by other auditors who have ceased
operations. As described in Note 19, these consolidated financial statements
have been restated to change the classification of the write-off of a $2,500,000
note from discontinued operations to continuing operations. We audited the
adjustment that was applied to the restated amounts reflected in the 2001
financial statements. Our procedures included (1) agreeing the previously
reported line items and disclosure amounts included in the 2001 consolidated
financial statements to a Company analysis obtained from management (2)
comparing restated amounts in the analysis to supporting documentation and (3)
testing the mathematical accuracy of the analysis. In our opinion, such
adjustment has been properly applied.

In addition, as described in Notes 2 and 7, the consolidated financial
statements of the Company for the year ended December 31, 2001 have been revised
to include the disclosures required by SFAS No. 148 and SFAS No. 142,
respectively. Our audit procedures with respect to the disclosures included in
Notes 2 and 7 with respect to 2001 included (1) comparing the amount of
stock-based compensation expense to the Company's underlying analysis obtained
from management, (2) comparing the previously reported net loss to the
previously issued financial statements and the adjustments to reported net loss
representing stock based compensation and amortization expense related to
goodwill (including any related tax effects) recognized in those periods, to the
Company's underlying analysis obtained from management, and (3) testing the
mathematical accuracy of the reconciliation of adjusted net loss to reported net
loss and the related loss-per-share amounts. In our opinion, the disclosures for
2001 in Notes 2 and 7 are appropriate.

                                       29
<PAGE>

However we were not engaged to audit, review or apply any procedures to the 2001
consolidated financial statements of the Company other than with respect to the
restatement adjustment and transitional disclosures and, accordingly, we do not
express an opinion or any other form of assurance on the 2001 consolidated
financial statements taken as a whole.

DELOITTE & TOUCHE LLP


New York, New York
March 26, 2004 (except with respect to the matters discussed in Notes 15 and 17,
as to which the date is April 14, 2004)



                                       30
<PAGE>

This audit report of Arthur Andersen LLP, our former independent public
accountants, is a copy of the original report dated February 26, 2002 rendered
by Arthur Andersen LLP on our consolidated financial statements included in our
Form 10-K filed on April 16, 2002, and has not been reissued by Arthur Andersen
LLP since that date. Arthur Andersen reported on the 2001 consolidated financial
statements prior to the restatement discussed in Note 19 and the transitional
disclosures discussed in Notes 2 and 7. We are including this copy of the Arthur
Andersen LLP audit report pursuant to Rule 2-02(e) of Regulation S-X under the
Securities Act of 1933.


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To CD&L, Inc.:


We have audited the accompanying consolidated balance sheets of CD&L, Inc. (a
Delaware corporation) and subsidiaries as of December 31, 2001 and 2000, and the
related consolidated statements of operations, changes in stockholders' equity
and cash flows for each of the three years in the period ended December 31,
2001. These consolidated financial statements and the schedule referred to below
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements and schedule based
on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of CD&L, Inc. and
subsidiaries as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2001, in conformity with accounting principles generally accepted
in the United States.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the index to
financial statement schedules is the responsibility of the Company's management
and is presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.

ARTHUR ANDERSEN LLP


Roseland, New Jersey
February 26, 2002
(except with respect to the matters discussed in
Note 9, as to which the date is April 15, 2002)

                                       31
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                     ASSETS
                                                                                               December 31,
                                                                                   -------------------------------------
                                                                                         2003               2002
                                                                                   -----------------  ------------------
<S>                                                                                <C>                <C>
CURRENT ASSETS:
  Cash and cash equivalents (Note 2)                                                       $1,697              $1,452
  Accounts receivable, less allowance for doubtful accounts of $872
     and $492 in 2003 and 2002, respectively (Note 9)                                      18,786              14,909
  Deferred income taxes (Notes 2 and 11)                                                    1,542               1,535
  Prepaid expenses and other current assets (Note 5)                                        2,526                 584
                                                                                   -----------------  ------------------

     Total current assets                                                                  24,551              18,480

EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net (Notes 2 and 6)                                   1,446               1,233
GOODWILL, net (Notes 2, 4 and 7)                                                           11,531              11,531
DEFERRED FINANCING COSTS, net (Notes 2, 4 and 7)                                              437                 661
NOTE RECEIVABLE FROM STOCKHOLDER, less allowance of $2,800 in 2002 (Notes 12 and
  16)                                                                                           -                   -
NOTE RECEIVABLE AND SECURITY DEPOSITS (Note 4)                                              2,235               1,878
DEFERRED INCOME TAXES (Notes 2 and 11)                                                        152                  38
                                                                                   -----------------  ------------------

           Total assets                                                                   $40,352             $33,821
                                                                                   =================  ==================


                                                LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Short-term borrowings (Note 9)                                                            $5,767       $          -
  Current maturities of long-term debt (Notes 2 and 9)                                       2,585              3,442
  Accounts payable and bank overdrafts (bank overdrafts totaled $2,649 and $1,632
  in 2003 and 2002, respectively)                                                            2,649              2,644
  Accrued expenses and other current liabilities (Note 8)                                   11,743              9,525
                                                                                   -----------------  ------------------

     Total current liabilities                                                              22,744             15,611

LONG-TERM DEBT, net of current maturities (Notes 2 and 9)                                   11,785             14,041
OTHER LONG-TERM LIABILITIES                                                                    240                269
                                                                                   -----------------  ------------------
           Total liabilities                                                                34,769             29,921
                                                                                   -----------------  ------------------

COMMITMENTS AND CONTINGENCIES (Notes 12 and 13)

STOCKHOLDERS' EQUITY (Notes 13, 14 and 15):
  Preferred stock, $.001 par value; 2,000,000 shares authorized; no
     shares issued and outstanding                                                               -                  -
  Common stock, $.001 par value; 30,000,000 shares authorized,
     7,688,027 shares issued in 2003 and 2002                                                    8                  8
  Additional paid-in capital                                                                12,883             12,883
  Treasury stock, 29,367 shares at cost                                                       (162)              (162)
  Accumulated deficit                                                                       (7,146)            (8,829)
                                                                                   -----------------  ------------------
      Total stockholders' equity                                                             5,583              3,900
                                                                                   -----------------  ------------------
            Total liabilities and stockholders' equity                                     $40,352            $33,821
                                                                                   =================  ==================
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these financial statements.

                                       32
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

<TABLE>
<CAPTION>
                                                                          For the Years Ended December 31,
                                                           ------------------------------------------------------------
                                                                  2003                 2002                2001
                                                           -------------------   -----------------   ------------------
<S>                                                        <C>                   <C>                 <C>
      Revenue (Note 2)                                            $166,083               $157,232           $160,544
      Cost of revenue (exclusive of depreciation and
        amortization)                                              133,348                127,152            127,840
                                                           -------------------    ----------------   -------------------
        Gross profit                                                32,735                 30,080             32,704
                                                           -------------------    ----------------   -------------------

      Selling, general and administrative expenses                  28,136                 25,492             26,881
      Goodwill impairment                                                -                  -                  3,349
      Depreciation and amortization                                    756                  1,173              2,476
      Other (income) expense, net (Notes 3, 4, 12 and
        16)                                                         (1,496)                   206              4,685
      Interest expense                                               2,534                  2,734              2,897
                                                           -------------------    ----------------   -------------------
                                                                    29,930                 29,605             40,288
                                                           -------------------    ----------------   -------------------

      Income (loss) from continuing operations before
        provision (benefit) for income taxes                         2,805                    475             (7,584)
      Provision (benefit) for income taxes
        (Notes 2 and 11)                                             1,122                    190             (1,780)
                                                           -------------------    ----------------   -------------------
      Income (loss) from continuing operations                      $1,683                    285             (5,804)
                                                           -------------------    ----------------   -------------------

      Discontinued operations (Note 3)
        Provision for loss on disposal of assets,
        net of benefit for income taxes of $0, $0 and
        $240, respectively                                               -                      -               (465)
                                                           -------------------    ----------------   -------------------
      Loss from discontinued operations                                  -                      -               (465)
                                                           -------------------    ----------------   -------------------
         Net income (loss)                                          $1,683                   $285            ($6,269)
                                                           ===================    ================   ===================
      Basic income (loss) per share (Note 2):
        Continuing operations                                         $.22                  $.04               ($.76)
        Discontinued operations                                        .00                   .00                (.06)
                                                           -------------------    ----------------   -------------------
        Net income (loss) per share                                   $.22                  $.04               ($.82)
                                                           ===================    ================   ===================
      Diluted income (loss) per share (Note 2):
        Continuing operations                                         $.21                  $.03               ($.76)
        Discontinued operations                                        .00                   .00                (.06)
                                                           -------------------    ----------------   -------------------
        Net income (loss) per share                                   $.21                  $.03               ($.82)
                                                           ===================    ================   ===================
      Basic weighted average common
        shares outstanding                                           7,659                 7,659               7,659
                                                           ===================    ================   ===================
      Diluted weighted average common
        shares outstanding                                           8,174                 8,167               7,659
                                                           ===================    ================   ===================
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these financial statements.

                                       33
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                        (in thousands, except share data)

<TABLE>
<CAPTION>
                                                                                              Retained
                                             Common Stock         Additional                   Earnings           Total
                                      ---------------------------   Paid-in     Treasury     (Accumulated     Stockholders'
                                         Shares        Amount       Capital       Stock        Deficit)           Equity
                                      ----------------------------------------------------------------------------------------
<S>                                   <C>              <C>        <C>           <C>          <C>              <C>
BALANCE AT
        DECEMBER 31, 2000                 7,658,660           $8       $12,883      ($162)          ($2,845)           $9,884
Net loss                                          -            -             -          -            (6,269)           (6,269)
                                      ----------------------------------------------------------------------------------------
BALANCE AT
        DECEMBER 31, 2001                 7,658,660            8        12,883       (162)           (9,114)            3,615
Net income                                        -            -             -          -               285               285
                                      ----------------------------------------------------------------------------------------
BALANCE AT
        DECEMBER 31, 2002                 7,658,660            8        12,883       (162)           (8,829)            3,900
Net income                                        -            -             -           -            1,683             1,683
                                      ----------------------------------------------------------------------------------------
BALANCE AT
        DECEMBER 31, 2003                 7,658,660           $8       $12,883      ($162)          ($7,146)           $5,583
                                      ========================================================================================
</TABLE>


The accompanying notes to consolidated financial statements are an integral part
of these financial statements.

                                       34
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

<TABLE>
<CAPTION>
                                                                                        For The Years Ended December 31,
                                                                                -------------------------------------------------
                                                                                     2003              2002            2001
                                                                                ----------------  ---------------  --------------
                                                                                                                     (Note 19)
<S>                                                                             <C>               <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                                                  $1,683              $285          ($6,269)
  Adjustments to reconcile net income (loss) to net cash provided by
     operating activities of continuing operations -
   Non-cash extinguishment of debt                                                   (1,034)                -                -
  Gain on disposal of equipment and leasehold improvements                              (96)             (119)             (26)
  Loss on sale of subsidiary                                                              -                 -            2,283
  Loss on disposal of assets of discontinued operations                                   -                 -              465
  Goodwill impairment                                                                     -                 -            3,349
  Depreciation, amortization and deferred financing amortization                      1,154             1,358            2,476
  Write-off of note receivable                                                            -                 -            2,500
  Provision for doubtful note receivable                                                  -               300                -
  Provision for doubtful accounts                                                       629              (165)             (69)
  Deferred income tax benefit                                                          (121)             (737)            (626)
  Changes in operating assets and liabilities
      (Increase) decrease in -
           Accounts receivable                                                       (4,506)              333            1,381
           Prepaid expenses and other current assets                                 (1,942)            1,378           (1,195)
           Note receivable from stockholder, security deposits and other assets        (357)               65              159
      Increase (decrease) in -
       Accounts payable, bank overdrafts, accrued expenses and other current
           liabilities                                                                2,223             1,029             (493)
           Other long-term liabilities                                                  (29)              138                7
                                                                                ----------------  ---------------  --------------
           Net cash (used in) provided by operating activities of
             continuing operations                                                   (2,396)            3,865            3,942
                                                                                ----------------  ---------------  --------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to equipment and leasehold improvements                                    (968)             (522)            (333)
   Proceeds from sales of equipment and leasehold improvements                          102               214              222
   Proceeds from sales of businesses, net                                                 -                 -           12,531
                                                                                ----------------  ---------------  --------------
           Net cash (used in) provided by investing activities of
             continuing operations                                                     (866)             (308)          12,420
                                                                                ----------------  ---------------  --------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Short-term borrowings (repayments), net                                             5,767                 -          (11,169)
   Repayments of long-term debt                                                      (2,260)           (3,120)          (3,008)
   Deferred financing costs                                                               -              (150)               -
                                                                                ----------------  ---------------  --------------
           Net cash provided by (used in) financing activities of continuing
             operations                                                               3,507            (3,270)         (14,177)
                                                                                ----------------  ---------------  --------------

CASH USED IN DISCONTINUED OPERATIONS                                                      -                 -           (1,339)
                                                                                ----------------  ---------------  --------------

           Net increase in cash and cash equivalents                                    245               287              846
CASH AND CASH EQUIVALENTS, beginning of year                                          1,452             1,165              319
                                                                                ----------------  ---------------  --------------
CASH AND CASH EQUIVALENTS, end of year                                               $1,697            $1,452           $1,165
                                                                                ================  ===============  ==============
</TABLE>

The accompanying notes to consolidated financial statements are an integral part
of these financial statements.

                                       35
<PAGE>

                           CD&L, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)      ORGANIZATION, BASIS OF PRESENTATION AND BUSINESS:

CD&L, Inc. (the "Company" or "CD&L") was founded in June 1994. The Company
provides an extensive network of same-day delivery services to a wide range of
commercial, industrial and retail customers. The Company's operations are
currently concentrated on the East Coast, with a strategic presence on the West
Coast.

The Company has an accumulated deficit of ($7,146,000) as of December 31, 2003.
As discussed in Note 9, the Company has had numerous occasions where waivers
have been required as a result of covenant violations or projected covenant
violations or that it has been necessary to amend the terms of such facilities
for other reasons. Although we were in compliance with our Senior Notes debt
covenants at December 31, 2003, we were anticipating non-compliance with certain
covenants in 2004 and beyond. Subsequently, on April 14, 2004, we restructured
our senior debt and related covenants. The restructuring includes an agreement
among us, our lenders and certain members of CD&L management and others which
improves the Company's short-term liquidity and reduces interest expense. See
Note 17 - Subsequent Events.

(2)      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Principles of Consolidation -

The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany balances
and transactions have been eliminated.

Use of Estimates in Preparation of the Financial Statements -

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the consolidated financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

Cash and Cash Equivalents -

CD&L considers all highly liquid investments with maturities of three months or
less when purchased to be cash equivalents. Cash equivalents are carried at
cost, which approximates market value.

Equipment and Leasehold Improvements -

Equipment and leasehold improvements are recorded at cost. Depreciation is
computed using the straight-line method over the estimated useful lives of the
assets. Leasehold improvements and assets subject to capital leases are
amortized over the shorter of the terms of the leases or the estimated useful
lives of the assets.

Vehicle Maintenance and Repair-

Vehicle maintenance and repair expense are expensed as incurred. Vehicle
maintenance and repair expense was $331,000, $528,000 and $677,000 for the years
ended 2003, 2002 and 2001, respectively. This expense is included as a component
of Cost of Revenue on the Statement of Operations. Due to the nature of the
Company's operations, the bulk of its vehicles are vans, pick-ups and passenger
cars. As such, the Company does not incur significant overhaul expenses that
require capitalization.

                                       36
<PAGE>

Goodwill -

On January 1, 2002, the Company adopted Statement of Financial Accounting
Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets" ("SFAS 142").
This Statement required that goodwill no longer be amortized over its estimated
useful life but tested for impairment on an annual basis. As required by SFAS
142, annual impairment tests were completed at the end of fiscal 2003 and 2002
and the Company determined that there was no impairment.

The value of the Company's goodwill is significant relative to total assets and
stockholders' equity. The Company reviews goodwill for impairment on at least an
annual basis using several fair-value based tests, which include, among others,
a discounted cash flow and terminal value computation as well as comparing the
Company's market capitalization to the book value of the Company. The discounted
cash flow and terminal value computation is based on management's estimates of
future operations. Changes in business conditions or interest rates could
materially impact management's estimates of future operations and consequently
the Company's evaluation of fair value, and this could result in an impairment
of goodwill. Such impairment, if any, could have a significant impact on the
Company's reported results from future operations and financial condition.

Deferred Financing Costs -

The costs incurred to obtain financing, including all related fees, are included
in intangible assets and deferred financing costs in the accompanying
consolidated balance sheets and are amortized as interest expense over the life
of the related financing, from 3 - 7 years. Such costs are amortized over the
term of the related debt agreements using the straight line method, which
approximates that of the effective interest method.

Insurance -

         The Company insures certain of its risks through insurance policies,
but retains risk as a result of its deductibles related to such insurance
policies. The Company's deductible for workers' compensation is $500,000 per
loss ($350,000 prior to May 1, 2003). The deductible for employee health medical
costs is $150,000 per loss ($125,000 prior to March 1, 2002). Effective July 1,
2003, automobile liability coverage is maintained for covered vehicles through a
fully-insured indemnity program with no deductible ($350,000 deductible prior to
July 1, 2003). The Company reserves the estimated amounts of uninsured claims
and deductibles related to such insurance retentions for claims that have
occurred in the normal course of business. These reserves are established by
management based upon the recommendations of third-party administrators who
perform a specific review of open claims, which include fully developed
estimates of both reported claims and incurred but not reported claims, as of
the balance sheet date. Actual claim settlements may differ materially from
these estimated reserve amounts. The Company's estimated cumulative reported
losses for workers' compensation and automobile liability claims for the period
January 1, 1999 through December 31, 2003 amounted to $13,844,000 for losses and
$7,363,000 for administrative and reinsurance costs, all of which has been
funded to the Company's insurance carrier. Additionally, as of December 31,
2003, the Company has accrued approximately $2 million for estimated losses
incurred but not reported. The Company has also accrued $372,000 for incurred
but unpaid employee health medical costs as of December 31, 2003.

A portion of the premium payments made by CD&L to its shared captive insurance
company (the "Captive") includes allocated amounts to fund the losses that are
in a risk-sharing layer of the Captive. If losses for a member of the Captive
exhaust the funds that the member is required to pay to the Captive for a given
policy year, the excess losses are shared between all other members of the
Captive on a proportional basis based on member premiums.

The Company also requires its independent contractors to maintain auto insurance
coverage as well as workers' compensation or occupational accident insurance.

Significant Customers -

For the years ended December 31, 2003, 2002 and 2001, two customers accounted
for 14.7%, 14.7% and 11.8%, respectively, of revenue. These customers accounted
for 11.4% and 11.1% of gross accounts receivable as of December 31, 2003 and
2002, respectively.

                                       37
<PAGE>

Revenue Recognition -

Revenue is recognized when pervasive evidence of an arrangement exists, the
price to the customer is fixed or determinable and collectibility is reasonably
assured. The Company interprets the timing of revenue recognition to be when
services are rendered to customers, and expenses are recognized as incurred.
This policy applies to all of the Company's same-day, time-critical delivery
service options, including Rush, Scheduled, Facilities Management and Dedicated
Contract Logistics. Certain customers pay in advance, giving rise to deferred
revenue.

Income Taxes -

CD&L accounts for income taxes utilizing the asset and liability approach.
Deferred income taxes are provided for differences in the recognition of assets
and liabilities for tax and financial reporting purposes. Temporary differences
result primarily from accelerated depreciation and amortization for tax purposes
and various accruals and reserves being deductible for tax purposes in future
periods.

Long-Lived Assets -

SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets"
("SFAS 144"), which became effective for the Company in 2002, addresses
financial accounting and reporting for the impairment or disposal of long-lived
assets. This Statement extends the reporting requirements to include reporting
separately as discontinued operations, components of an entity that have either
been disposed of or classified as held-for-sale. The Company shall recognize an
impairment loss only if the carrying amount of a long-lived asset is not
recoverable and exceeds its fair value. That assessment shall be based on the
carrying amount of the asset at the date it is tested for recoverability,
whether in use or under development. An impairment loss shall be measured as the
amount by which the carrying amount of the long-lived asset exceeds its fair
value. The adoption of SFAS No. 144 did not have a material impact on the
financial position or results of operations of the Company.

Fair Value of Financial Instruments -

Due to the short maturities of the Company's cash, receivables and payables, the
carrying value of these financial instruments approximates their fair values.
The fair value of the Company's debt is estimated based on the current rates
offered to the Company for debt with similar remaining maturities. The Company
believes that the carrying value of its debt estimates the fair value of such
debt instruments.

Stock Based Compensation -

In December 2002, Statement of Financial Accounting Standards ("SFAS") No. 148,
"Accounting for Stock-Based Compensation-Transition and Disclosure" ("SFAS 148")
was issued and became effective in 2002. This Statement amends SFAS No. 123
"Accounting for Stock-Based Compensation," ("SFAS 123") to provide alternative
methods of transition for an entity that voluntarily changes to the fair value
method of accounting for stock-based compensation. The Company has elected to
continue to recognize stock-based compensation using the intrinsic value method
and has incorporated the additional disclosure requirements of SFAS 148.

The Company has adopted the disclosure provisions of SFAS 148. As a result,
under the provisions of SFAS 123, the Company applies Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25"), and
related interpretations in accounting for its stock option plans. Accordingly,
no compensation expense has been recognized for its stock-based compensation
plans. Pro forma information regarding net income and earnings per share is
required, and has been determined as if the Company had accounted for its stock
options under the fair value method. The fair value for these options was
estimated at the date of grant using the Black-Scholes option-pricing model with
the following assumptions for 2003, 2002 and 2001- .

                                                  2003        2002        2001
                                             ----------  ----------  ----------
Weighted average fair value                      $0.51       $0.44       $0.53
Risk-free interest rate                          4.15%       4.30%       4.80%
Volatility factor                                  97%        101%        141%
Expected life                                  7 years     7 years     7 years
Dividend yield                                    None        None        None
                                             ----------  ----------  ----------

                                       38
<PAGE>

The pro forma information regarding net income (loss) and income (loss) per
share is as follows (in thousands, except per share data)-

<TABLE>
<CAPTION>
                                                                  2003               2002              2001
                                                             ----------------   ---------------  ------------------
<S>                                                          <C>                <C>              <C>
Income (loss) from continuing operations - as
reported                                                           $1,683               $285          ($5,804)
Net loss from discontinued operations - as reported
                                                                        -                  -             (465)
                                                             ----------------   ---------------  ------------------
Net income (loss) - as reported                                     1,683                285           (6,269)
                                                             ----------------   ---------------  ------------------

Stock-based employee compensation expense determined
   under fair value based method for all awards, net
   of related tax effects                                              (5)               (74)            (124)
                                                             ----------------   ---------------  ------------------

Income (loss) from continuing operations - pro
forma                                                               1,678                211           (5,928)
Net loss from discontinued operations - pro forma
                                                                        -                  -             (465)
                                                             ----------------   ---------------  ------------------
Net income (loss) - pro forma                                      $1,678               $211          ($6,393)
                                                             ================   ===============  ==================

Basic income (loss) per share:
    Continuing operations - as reported                              $.22               $.04            ($.76)
    Discontinued operations - as reported                             .00                .00            ( .06)
                                                             ----------------   ---------------  ------------------
   Net income (loss) per share - as reported                         $.22               $.04            ($.82)
                                                             ================   ===============  ==================
    Continuing operations - pro forma                                $.22               $.03            ($.77)
    Discontinued operations - pro forma                               .00                .00            ( .06)
                                                             ----------------   ---------------  ------------------
   Net income (loss) per share - pro forma                           $.22               $.03            ($.83)
                                                             ================   ===============  ==================

Diluted income (loss) per share:
    Continuing operations - as reported                              $.21               $.03            ($.76)
    Discontinued operations - as reported                             .00                .00            ( .06)
                                                             ----------------   ---------------  ------------------
   Net income (loss) per share - as reported                         $.21               $.03            ($.82)
                                                             ================   ===============  ==================
    Continuing operations - pro forma                                $.21               $.03            ($.77)
    Discontinued operations - pro forma                               .00                .00            ( .06)
                                                             ----------------   ---------------  ------------------
   Net income (loss) per share - pro forma                           $.21               $.03            ($.83)
                                                             ================   ===============  ==================
</TABLE>


Income (Loss) Per Share -

Basic earnings per share represents net income (loss) divided by the weighted
average shares outstanding. Diluted earnings per share represents net income
(loss) divided by the weighted average shares outstanding adjusted for the
incremental dilution of potentially dilutive common shares. Because of the
Company's net loss for the year ended December 31, 2001, the inclusion of shares
represented by 1,842 Stock Options and 505,351 Warrants for which the exercise
or conversion price was less than the average market price of common shares,
would be anti-dilutive and therefore they are not included in the loss per share
calculations for the year ended December 31, 2001.

                                       39
<PAGE>

A reconciliation of weighted average common shares outstanding to weighted
average common shares outstanding assuming dilution follows:

<TABLE>
<CAPTION>
                                                            2003                2002                 2001
                                                       ----------------    ----------------     ---------------
<S>                                                    <C>                 <C>                  <C>
Basic weighted average common
  Shares outstanding                                        7,658,660           7,658,660           7,658,660
Effect of dilutive securities:
  Stock options and warrants                                  515,419             508,751                   -
                                                       ----------------    ----------------     ---------------
Diluted weighted average common
  Shares outstanding                                        8,174,079           8,167,411           7,658,660
                                                       ================    ================     ===============
</TABLE>


The following potentially dilutive common shares were excluded from the
computation of diluted Earnings Per Share because the exercise or conversion
price was greater than the average market price of common shares -

<TABLE>
<CAPTION>
                                                           2003                2002                 2001
                                                       --------------      -------------        -------------
<S>                                                    <C>                 <C>                  <C>
Stock options                                              1,863,668          1,889,434            1,917,202
Subordinated convertible debentures                                -                  -                9,863
Seller-financed convertible notes                            352,905            458,083              524,961

</TABLE>

New Accounting Standards and Pronouncements

In June 2002, SFAS No. 146, "Accounting for Costs Associated with Exit or
Disposal Activities" ("SFAS 146") was issued. This Statement addresses financial
accounting and reporting for costs associated with exit or disposal activities.
SFAS No. 146 requires that a liability for a cost associated with an exit or
disposal activity be recognized when the liability is incurred. This Statement
also establishes that fair value is the objective for initial measurement of the
liability. The provisions of SFAS 146 are effective for exit or disposal
activities that are initiated after December 31, 2002. The adoption of SFAS 146
is not expected to have a material impact on the financial position or results
of operations of the Company.

In November 2002, Interpretation No. 45 of the Financial Accounting Standards
Board ("FASB"), "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45")
was issued. FIN 45 requires certain guarantees to be recorded at fair value and
requires a guarantor to make significant new disclosures, even when the
likelihood of making any payments under the guarantee is remote. Generally, FIN
45 applies to certain types of financial guarantees that contingently require
the guarantor to make payments to the guaranteed party based on changes in an
underlying agreement that is related to an asset, liability, or an equity
security of the guaranteed party; performance guarantees involving contracts
which require the guarantor to make payments to the guaranteed party based on
another entity's failure to perform under an obligating agreement;
indemnification agreements that contingently require the guarantor to make
payments to an indemnified party based on changes in an underlying agreement
that is related to an asset, liability, or an equity security of the indemnified
party; or indirect guarantees of the indebtedness of others. The initial
recognition and initial measurement provisions of FIN 45 are applicable on a
prospective basis to guarantees issued or modified after December 31, 2002.
Disclosure requirements under FIN 45 are effective for financial statements
ending after December 15, 2002 and are applicable to all guarantees issued by
the guarantor subject to FIN 45's scope, including guarantees issued prior to
FIN 45. The Company has evaluated the accounting provisions of the
interpretations and there was no material impact on its financial condition,
results of operations or cash flows for the period ended December 31, 2002.

In January 2003, Interpretation No. 46 of the FASB, "Consolidation of Variable
Interest Entities" ("FIN 46") was issued. The Company does not believe that it
has any relationships with variable interest entities that are subject to the
requirements of FIN 46.

In April 2003, SFAS No, 149, "Amendment of Statement 133 on Derivative
Instruments and Hedging Activities" ("SFAS 149") was issued. This Statement
amends and clarifies financial accounting and reporting for derivative
instruments, including certain derivative instruments embedded in other
contracts and for hedging activities under FASB Statement No. 133 "Accounting
for Derivative Instruments and Hedging Activities". The Company does not have
any derivative instruments or hedging activities that are subject to the
requirements of SFAS 149.

                                       40
<PAGE>

In May 2003, SFAS No. 150, "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity" ("SFAS 150") was issued. This
Statement establishes standards for how an issuer classifies and measures
certain financial instruments with characteristics of both liabilities and
equity. It requires that an issuer classify a financial instrument that is
within its scope as a liability (or an asset in some circumstances). As of
December 31, 2003, the Company did not have any financial instruments with
characteristics of both liabilities and equity. The provisions of SFAS 150 were
followed in determining the equity classification of preferred shares issued in
relation to the debt restructuring as disclosed in the pro forma financial
information in Note 17 - Subsequent Events.

In December 2003, FASB Interpretation No. 46 (revised December 2003),
"Consolidation of Variable Interest Entities" ("Revised FIN 46") was issued. The
Company does not believe that it has any relationships with variable interest
entities that will be subject to the requirements of the Revised FIN 46.

In December 2003, SFAS No, 132 (revised 2003), "Employers' Disclosures about
Pensions and Other Postretirement Benefits" ("Revised SFAS 132") was issued.
This Statement revises employers' disclosures about pension plans and other
postretirement benefit plans. The provisions of the Revised SFAS 132 is
effective for financial statements with fiscal years ending after December 15,
2003. The adoption of the Revised SFAS 132 is not expected to have a material
impact on the financial position or results of operations of the Company.


(3)      DISCONTINUED OPERATIONS:

On December 1, 2000, the Company made a strategic decision to dispose of its air
delivery business. Subsequently, on March 30, 2001, the Company consummated a
transaction providing for the sale of certain assets and liabilities of Sureway
Air Traffic Corporation, Inc. ("Sureway"), its air delivery business. The
selling price for the net assets was approximately $14,150,000 and was comprised
of $11,650,000 in cash, a subordinated promissory note (the "Note Receivable")
for $2,500,000 and contingent cash payments based upon the ultimate development
of certain liabilities retained by the Company. The Note Receivable originally
bore interest at the rate of 10.0% per annum, with interest only payable in
monthly installments. The entire balance of principal, plus all accrued
interest, was due and payable on March 30, 2006.

The Company reported a net loss on the disposition of the Company's air delivery
business of $465,000 (net of benefit for income taxes of $240,000) accounted for
as discontinued operations for the year ended December 31, 2001.

Accordingly, the operating results and the provision for loss on the disposition
of the Company's air delivery business have been segregated from continuing
operations and classified as discontinued operations in the accompanying
consolidated statements of operations.

As of December 31, 2001 collection of the Note Receivable, interest accrued
thereon and certain other related receivables was in doubt. Accordingly, the
Company recorded a pre-tax charge of $2,500,000 (included in Other (Income)
Expense, net) in the fourth quarter of 2001 to write-off the Note Receivable.
Additionally, the Company recorded a pre-tax charge of $705,000 (included in
Discontinued Operations) in the fourth quarter of 2001 to write-off certain
other direct expenses incurred on behalf of Sureway subsequent to March 30, 2001
for which collection was in doubt and to true-up certain accruals that were
estimated in 2000 relative to the disposition of Sureway.

In February 1999, the Company became obligated for seller-financed acquisition
debt of $1,650,000 related to the acquisition of Gold Wings (See Note 4). As of
February 28, 2003, the note had a remaining principal balance of $1,034,000 (the
"CDL/Gold Note"). On February 28, 2003, the Company completed a series of
related transactions with GMV Express, Inc. ("GMV"), Richard Gold (a principal
of GMV) ("Gold") and his affiliates, and Global Delivery Systems LLC ("Global")
and its subsidiary, Sureway Worldwide LLC ("Sureway Worldwide"). The net effect
of the transactions with Global, Sureway Worldwide, GMV and Gold is that the
Company assigned the Note Receivable to GMV in exchange for a release on the
CDL/Gold Note payable, so that the Company is now relieved of its $1,034,000
liability for the CDL/Gold Note and the Company has no further rights to the
Note Receivable. In addition, the Company received payments from Sureway
Worldwide and Global of approximately $117,000 ($72,000 in settlement of
disputed claims and $45,000 for other amounts due) and provided Gold with a
release covering claims of breach of certain non-competition agreements. As a
result of this transaction, the Company recorded a gain of $1,034,000 during the
year ended December 31, 2003, included within Other (Income) Expense, net.

                                       41
<PAGE>

Operations from the discontinued air delivery business were as follows (in
thousands) -

                                                            For the Year
                                                               Ended
                                                            December 31,
                                                                2001
                                                          ---------------

Provision  for loss on disposal of assets,  net
   of benefit for income taxes of $240                         ($465)
                                                          ===============

As a result of the sale of its air delivery business, the Company now operates
in only one reportable business segment.

(4)      BUSINESS COMBINATIONS AND DIVESTITURES:

On February 16, 1999, the Company and its subsidiary, Sureway, entered into and
consummated an asset and stock purchase agreement with Victory Messenger
Service, Inc., Richard Gold, Darobin Freight Forwarding Co., Inc., ("Darobin")
and The Trust Created Under Paragraph Third of the Last Will and Testament of
Charles Gold (the "Trust"), (collectively "Gold Wings"), whereby Sureway
purchased all of the outstanding shares of the capital stock of Darobin and
certain of the assets and liabilities of the other sellers. The purchase price
was comprised of approximately $3,000,000 in cash, including estimated direct
acquisition costs, $1,650,000 in a 7% subordinated note (the "CDL/Gold Note")
and 200,000 shares of CD&L common stock at $3.875 per share. The CDL/Gold Note
was due April 16, 2001, with interest payable quarterly commencing April 1,
1999. In 2001 the CDL/Gold Note was renegotiated to include monthly principal
and interest payments through April 2004 at an increased interest rate of 9%.
The CDL/Gold Note is subordinate to all existing or future senior debt of CD&L.
In addition, a contingent earn out in the aggregate amount of up to $520,000 was
payable based on the achievement of certain financial goals during the two year
period following the closing. The earn out was payable 55% in cash and 45% in
CD&L common stock. The net assets acquired in this transaction were sold as part
of the disposition of Sureway. The obligations under the CDL/Gold Note and earn
out, however, remain with CD&L following the sale of the air delivery business.
During 2000, approximately $250,000 of the earn out was paid in cash and the
remaining obligation under the earn out was reduced by approximately $100,000.
In 2001, approximately $150,000 was paid to Gold Wings in full settlement of the
earn out. In 2002 the CDL/Gold Note was renegotiated to include monthly
principal and interest payments through June 2007 and the interest rate was
changed to a floating rate with a floor of 7% and a ceiling of 9%. The CDL/Gold
Note was subsequently extinguished in February 2003. See Note 3.

On April 30, 1999, CD&L entered into and consummated an asset purchase agreement
with its subsidiary, Silver Star Express, Inc. ("Silver Star") and Metro Parcel
Service, Inc., Nathan Spaulding and Kelly M. Spaulding, (collectively, "Metro
Parcel"), whereby Silver Star purchased certain of the assets and liabilities of
Metro Parcel. The purchase price was comprised of approximately $710,000 in
cash, $202,734 in a 7% subordinated note (the "Metro Parcel Note") and 40,000
shares of CD&L's common stock at $3.25 per share. The Metro Parcel Note was due
April 30, 2001 with interest payable quarterly commencing August 1, 1999 and is
subordinate to all existing or future senior debt of CD&L. In 2001 the Metro
Parcel Note was renegotiated to include monthly principal and interest payments
through April 2004 at an increased interest rate of 9%. In 2002 the Metro Parcel
Note was renegotiated to include monthly principal and interest payments through
June 2007 and the interest rate was changed to a floating rate with a floor of
7% and a ceiling of 9%.

                                       42
<PAGE>

On April 30, 1999, CD&L entered into and consummated an asset purchase agreement
with its subsidiary, Clayton/National Courier Systems, Inc. ("Clayton/National")
and Westwind Express, Inc., Logistics Delivery Systems, Inc., Fastrak Delivery
Systems, Inc., Sierra Delivery Services, Inc., and Steven S. Keihner
(collectively, "Westwind"), whereby Clayton/National purchased certain of the
assets and liabilities of Westwind. The purchase price was comprised of
approximately $2,650,000 in cash, $1,680,000 in various 7% subordinated notes
(the "Westwind Notes") and 149,533 shares of CD&L's common stock at $3.21 per
share. The Westwind Notes are comprised of two-year notes due April 30, 2001
with a total principal amount of $1,200,000 and three-year notes due April 30,
2002 with a total principal amount of $480,000. Interest on the Westwind Notes
was payable quarterly commencing July 31, 1999. The Westwind Notes are
subordinate to all existing or future senior debt of CD&L. In addition, a
contingent earn out in the aggregate amount of up to $700,000 was payable based
on the achievement of certain financial goals during the two year period
following the closing. The earn out was payable 60% in cash and 40% in one year
promissory notes bearing interest at a rate of 7% per annum having similar terms
as the Westwind Notes referred to above. During 2000, the earn out was settled
for $100,000 payable in twelve monthly cash installments commencing November 1,
2000. In 2001 the Westwind Notes due April 30, 2001 were consolidated and
renegotiated to include monthly principal and interest payments through April
2004 at an increased interest rate of 9%. In 2002 the Westwind Notes due April
30, 2002 were consolidated and renegotiated to include monthly principal and
interest payments through April 2007 and the interest rate was changed to a
floating rate with a floor of 7% and a ceiling of 9%. In addition, the Westwind
Notes amended in 2001 were renegotiated and amended to include monthly principal
and interest payments through June 2007 and the interest rate was changed to a
floating rate with a floor of 7% and a ceiling of 9%.

On May 10, 1999, CD&L entered into and consummated an asset purchase agreement
(the "Skycab Purchase Agreement") with its subsidiary, Sureway and Skycab, Inc.
and Martin Shulman (collectively, "Skycab"), whereby Sureway purchased certain
assets of Skycab. The purchase price was comprised of approximately $78,100 in
cash and a contingent earn out payable for sixteen quarters following the
closing date. The net assets acquired in this transaction were sold as part of
the disposition of Sureway, who also assumed the liability for the remaining
contingent earn out payments.

CD&L financed each of the above acquisitions using proceeds from its revolving
credit facility. All of the above transactions have been accounted for under the
purchase method of accounting. Accordingly, the allocations of the cost of the
acquired assets and liabilities have been made on the basis of their estimated
fair value. The aggregate amount of goodwill recorded for the Gold Wings and
Skycab acquisitions was originally $5,200,000 and was being amortized over 25
years up to the date of disposition. The goodwill recorded for the Metro Parcel
acquisition was approximately $1,100,000 and was being amortized over 25 years.
The goodwill for the Westwind acquisition was approximately $5,200,000 and was
being amortized over 40 years. Under the provisions of SFAS 142 the Company
ceased amortization of goodwill in 2002 and began annually testing such goodwill
for impairment (Note 7). The consolidated financial statements include the
operating results of Gold Wings, Metro Parcel, Westwind, and Skycab from their
respective acquisition dates until the sale date as applicable.

On June 14, 2001, the Company consummated a transaction providing for the sale
of all the outstanding stock of National Express, Inc., the Company's ground
courier operation in the Mid-West, to First Choice Courier and Distribution,
Inc. ("First Choice"). The selling price was approximately $2,530,000 and was
comprised of $880,000 in cash and a subordinated promissory note (the
"Promissory Note") for $1,650,000. The Promissory Note originally bore interest
at the rate of 7.0% per annum. The Promissory Note, as amended on March 14,
2003, allows for the deferral of the interest and principal payments due on
December 14, 2002 and March 14, 2003. A new quarterly payment schedule will
commence on June 14, 2003 with interest only payments at a new interest rate at
9.0% per annum. Upon the earlier of June 14, 2004 or the maker of the Promissory
Note meeting certain financial benchmarks, principal payments shall resume and
the interest rate will prospectively revert back to 7.0% per annum. The final
balloon payment of approximately $1,100,000 plus any remaining principal or
unpaid interest remains due on June 14, 2006. The Promissory Note is included in
Note Receivable and Security Deposits in the accompanying balance sheets. As a
result of the transaction, the Company recorded a $2,283,000 loss on the sale
with no related net tax benefit, which is included in other (income) expense,
net in the accompanying statement of operations for the year ended December 31,
2001. Revenues for the Mid-West operations amounted to $0, $0 and $4,500,000 for
the years ending December 31, 2003, 2002 and 2001, respectively.

Subsequently, on March 1, 2004, the Company consummated a transaction providing
for the repurchase of certain Indiana-based assets and liabilities sold to First
Choice in June 2001. The acquisition included the release of certain non-compete
agreements. Consideration for the repurchase includes cancellation of the
Promissory Note owed by First Choice of approximately $1,600,000 plus a three
year contingent earn-out based on future net revenue generated by the accounts
repurchased.

                                       43
<PAGE>

(5)      PREPAID EXPENSES AND OTHER CURRENT ASSETS:

Prepaid expenses and other current assets consist of the following (in
thousands) -

<TABLE>
<CAPTION>
                                                                                        December 31,
                                                                        ---------------------------------------------
                                                                               2003                      2002
                                                                        --------------------      -------------------
<S>                                                                     <C>                       <C>
  Prepaid insurance                                                           $2,092                      $170
  Other receivables                                                              150                       210
  Prepaid income taxes                                                           136                        89
  Other                                                                          148                       115
                                                                        --------------------      -------------------

                                                                              $2,526                      $584
                                                                        ====================      ===================
</TABLE>

(6)      EQUIPMENT AND LEASEHOLD IMPROVEMENTS:

Equipment and leasehold improvements consist of the following (in thousands) -

<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                    ---------------------------------
                                                                   Useful Lives          2003              2002
                                                                   ------------     ----------------  ---------------
<S>                                                                <C>              <C>               <C>
Transportation and warehouse equipment                              3-7 years             $1,800            $3,361
Office equipment                                                    3-7 years              1,362             1,918
Other equipment                                                     5-7 years                140               218
Leasehold improvements                                             Lease period              720               710
                                                                                    ----------------  ---------------
                                                                                           4,022             6,207
Less - accumulated depreciation and amortization                                          (2,576)           (4,974)
                                                                                    ----------------  ---------------

                                                                                          $1,446            $1,233
                                                                                    ================  ===============
</TABLE>

Depreciation and amortization expense for equipment and leasehold improvements
for the years ended December 31, 2003, 2002 and 2001 was approximately $756,000,
$1,148,000 and $1,532,000, respectively.

Leased equipment under capitalized leases (included above) consists of the
following (in thousands) -

<TABLE>
<CAPTION>
                                                                                             December 31,
                                                                                    -------------------------------
                                                                                         2003            2002
                                                                                    ---------------  --------------
<S>                                                                                 <C>              <C>
Equipment                                                                                   $674             $674
Less - accumulated depreciation                                                             (583)            (399)
                                                                                    ---------------  --------------

                                                                                             $91             $275
                                                                                    ===============  ==============
</TABLE>

The Company incurred capital lease obligations of $0 and $8,000 in 2003 and 2002
for warehouse equipment and vehicles, respectively.

                                       44
<PAGE>

(7)      GOODWILL, INTANGIBLE ASSETS AND DEFERRED FINANCING COSTS:

Goodwill consists of the following (in thousands) -
<TABLE>
<CAPTION>
                                                                                                December 31,
                                                                                       -------------------------------
                                                             Useful Lives                   2003            2002
                                                             ------------              ---------------  --------------
<S>                                                          <C>                       <C>              <C>
Goodwill                                                      Indefinite                    $17,176          $17,176
Less - accumulated amortization and impairment                                               (5,645)          (5,645)
                                                                                       ---------------  --------------

                                                                                            $11,531          $11,531
                                                                                       ===============  ==============
</TABLE>

Intangible assets and deferred financing costs consist of the following (in
thousands) -
<TABLE>
<CAPTION>
                                                                                                December 31,
                                                                                       -------------------------------
                                                             Useful Lives                   2003            2002
                                                             ------------              ---------------  --------------
<S>                                                          <C>                       <C>              <C>
Non-compete agreements                                       3 - 5 years                         $-             $250
Deferred financing costs and other                           3 - 7 years                      1,338            1,396
                                                                                       ---------------  --------------
                                                                                              1,338            1,646
Less - accumulated amortization                                                                (901)            (985)
                                                                                       ---------------  --------------

                                                                                               $437             $661
                                                                                       ===============  ==============
</TABLE>

Deferred financing costs totaled $437,000 as of December 31, 2003 (net of
accumulated amortization of $901,000). Amortization of deferred financing costs
for the years ended December 31, 2003, 2002 and 2001 was approximately $224,000,
$210,000 and $210,000, respectively. Amortization of deferred financing costs
has been recorded as interest expense.

Estimated amortization of deferred financing costs for the years ended December
31 (in thousands)-


                  2004                           $224
                  2005                            199
                  2006                             14
                  2007                              -

As a result of adopting SFAS 142 on January 1, 2002, the Company discontinued
amortization of goodwill. A reconciliation of previously reported income (loss)
from continuing operations and earnings (loss) per share from continuing
operations to the amounts adjusted for the exclusion of goodwill amortization,
net of the related income tax effect is as follows (in thousands, except per
share amounts):

<TABLE>
<CAPTION>
                                                                            Year Ended December 31,
                                                             -------------------------------------------------------
                                                                   2003              2002               2001
                                                             -------------------------------------------------------
<S>                                                          <C>                <C>               <C>
              Reported income (loss) from continuing
                 operations                                        $1,683              $285           ($5,804)
              Goodwill amortization, net of tax                         -                 -               543
                                                             -------------------------------------------------------
              Adjusted income (loss) from continuing
                 operations                                        $1,683              $285           ($5,261)
                                                             =======================================================

              Reported loss from discontinued operations
                                                                       $-                $-             ($465)
              Goodwill amortization, net of tax                         -                 -                 -
                                                             -------------------------------------------------------
              Adjusted loss from discontinued operations
                                                                       $-                $-             ($465)
                                                            =======================================================

              Reported net income (loss)                           $1,683              $285           ($6,269)
              Goodwill amortization, net of tax                         -                 -               543
                                                             -------------------------------------------------------
              Adjusted net income (loss)                           $1,683              $285           ($5,726)
                                                             =======================================================

              Adjusted income (loss) from continuing
                 operations per share - basic                           $.22              $.04             ($.69)
                                                             =======================================================
</TABLE>

                                       45
<PAGE>

<TABLE>
<CAPTION>
<S>                                                          <C>                <C>               <C>
              Adjusted income (loss) from continuing
                 operations per share - diluted                         $.21              $.03             ($.69)
                                                             =======================================================

              Adjusted loss from discontinued operations
                 per share - basic                                      $.00              $.00             ($.06)
                                                             =======================================================
              Adjusted loss from discontinued operations
                 per share - diluted                                    $.00              $.00             ($.06)
                                                             =======================================================

              Adjusted net income (loss) per share - basic              $.22              $.04             ($.75)
                                                             =======================================================

              Adjusted net income (loss) per share - diluted            $.21              $.03             ($.75)
                                                             =======================================================
</TABLE>

During 2001 the Company recorded a goodwill impairment charge of $3,349,000. The
charge was the result of a comprehensive review of the Company's intangible
assets and such charge was calculated in accordance with the provisions of SFAS
121. The measurement of impairment losses recognized in 2001 is based on the
difference between the estimated fair value and the carrying amounts of such
assets.

(8)      ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES:

Accrued expenses and other current liabilities consist of the following (in
thousands) -
<TABLE>
<CAPTION>
                                                                                               December 31,
                                                                                       ------------------------------
                                                                                           2003             2002
                                                                                       --------------   -------------
<S>                                                                                    <C>              <C>
Payroll and related expenses                                                                 $2,766           $2,552
Third party delivery costs                                                                    2,796            2,105
Insurance                                                                                     2,135            2,434
Professional fees                                                                               284              291
Interest                                                                                        176               78
Uninsured personal injury and property damage claims
    (Note 12)                                                                                   885              325
Other                                                                                         2,701            1,740
                                                                                       --------------   -------------
                                                                                            $11,743           $9,525
                                                                                       ==============   =============
</TABLE>

(9)      SHORT-TERM BORROWINGS AND LONG-TERM DEBT:

Short-term borrowings -

At December 31, 2003, short-term borrowings totaled $5,767,000 consisting of a
line of credit balance of $4,536,000 and $1,231,000 of outstanding borrowings
related to the insurance financing arrangements discussed below. There were no
short-term borrowings outstanding as of December 31, 2002.

As of June 27, 2002 CD&L and Summit Business Capital Corporation, doing business
as Fleet Capital - Business Finance Division, entered into an agreement
establishing a revolving credit facility (the "Fleet Facility") of $15,000,000.
The Fleet Facility replaced a revolving credit facility with First Union
Commercial Corporation established in July 1997. The Company's short-term
borrowings on its line of credit are as follows for the years ended December 31
(in thousands) -

<TABLE>
<CAPTION>
                                                                          2003         2002        2001
                                                                          ----         ----        ----
<S>                                                                     <C>         <C>         <C>
     Maximum amount outstanding during the year                         $5,618       $1,800     $11,500
     End of year balance                                                 4,536            -           -
     Average balance outstanding during the year                         1,600          300       2,700
     Weighted average borrowing cost during the year                     11.0%        11.0%       11.0%
     Standby letters of credit, end of year balance                     $6,515       $7,000      $7,081

</TABLE>
                                       46
<PAGE>

The Fleet Facility expires on June 27, 2005 and provides CD&L with standby
letters of credit, prime rate based loans at the bank's prime rate, as defined,
plus 25 basis points (4.25% at December 31, 2003) and LIBOR based loans at the
bank's LIBOR, as defined, plus 225 basis points (3.37% at December 31, 2003).
Credit availability is based on eligible amounts of accounts receivable, as
defined, and is secured by substantially all of the assets, including certain
cash balances, accounts receivable, equipment, leasehold improvements and
general intangibles of the Company and its subsidiaries. During the year ended
December 31, 2003, the maximum borrowings outstanding under the Fleet Facility
were approximately $5,618,000 and the outstanding borrowings as of December 31,
2003 were approximately $4,536,000. As of December 31, 2003, the Company had
borrowing availability of $1,000,000 under the Fleet Facility, after adjusting
for restrictions related to outstanding standby letters of credit of $6,515,000
and minimum availability requirements.

Under the terms of the Fleet Facility, the Company is required to maintain
certain financial ratios and comply with other financial conditions. The Fleet
Facility also prohibits the Company from incurring certain additional
indebtedness, limits certain investments, advances or loans and restricts
substantial asset sales, capital expenditures and cash dividends. The Company
was in compliance with its Fleet debt covenants as of December 31, 2003.

Insurance Financing Agreements -

In connection with the renewal of certain of the Company's insurance policies,
CD&L entered into four agreements to arrange for the financing of annual
insurance premiums. A total of $3,236,000 was financed through these
arrangements. Monthly payments, including interest, amount to $328,000. The
interest rates range from 3.50% to 4.75% and the notes mature in March and April
2004. The related annual insurance premiums were paid to the various insurance
companies at the beginning of each policy year. Outstanding debt amounts at
December 31, 2003 of $1,231,000 are included in short-term borrowings. The
corresponding prepaid insurance has been recorded in prepaid expenses and other
current assets.

Long-Term Debt -

On January 29, 1999, the Company completed a $15,000,000 private placement of
senior subordinated notes and warrants (the "Senior Notes") with three financial
institutions. The Senior Notes originally bore interest at 12.0% per annum and
are subordinate to all senior debt including the Company's Fleet Facility. Under
the terms of the Senior Notes, as amended, the Company is required to maintain
certain financial ratios and comply with other financial conditions contained in
the Senior Notes agreement. As of August 17, 2000, November 21, 2000, March 30,
2001, May 30, 2001, August 20, 2001, November 19, 2001, April 12, 2002, June 28,
2002, April 23, 2003 and November 13, 2003, the Company and the note holders
modified the Senior Subordinated Loan Agreement (the "Senior Note Agreement")
entered into on January 29, 1999. Although we were in compliance with our Senior
Notes debt covenants at December 31, 2003, we were anticipating non-compliance
with certain covenants in 2004 and beyond. Subsequently, on April 14, 2004, we
restructured our senior debt and related covenants. The restructuring includes
an agreement among us, our lenders and certain members of CD&L management and
others which improves the Company's short-term liquidity and reduces interest
expense. See Note 17 - Subsequent Events.


                                       47
<PAGE>

Long-term debt consists of the following (in thousands) -

<TABLE>
<CAPTION>
                                                                                              December 31,
                                                                                  --------------------------------------
                                                                                          2003                2002
                                                                                  ------------------  ------------------
<S>                                                                               <C>                 <C>

  Senior Subordinated Notes, net of unamortized discount of $377 and $557,
      respectively.                                                                          $10,623             $11,443
  Capital lease obligations due through October 2004 with interest at rates
      ranging from 6.5% to 11.5% and secured by the related property.                             76                 303
  Seller-financed debt on acquisitions, payable in monthly installments through
      June 2007. Interest is payable at rates ranging between 7.0% and 11.0%.
      (a)                                                                                      3,671               5,737
                                                                                   -----------------  ------------------
                                                                                              14,370              17,483
  Less - Current maturities                                                                   (2,585)             (3,442)
                                                                                   -------------------  ----------------
                                                                                             $11,785             $14,041
                                                                                   ===================  ================
</TABLE>

     (a)   In April 2002, the Company renegotiated the repayment terms of
           certain seller-financed debt. Effective with the July 2002 payments,
           the individual notes convert into five year term loans with principal
           and interest payments due monthly. The interest rate on
           seller-financed debt, as amended in 2002, is generally a floating
           interest rate with a floor of 7% and a ceiling of 9%. The one note
           not renegotiated in 2002 has a balance of $761,000 at December 31,
           2003 and bears interest at a rate of 11.0%.

The aggregate annual principal maturities of debt (excluding capital lease
obligations) as of December 31, 2003 are as follows (in thousands) -

              2004                        $2,514
              2005                         1,760
              2006                         9,439
              2007                           580
              2008                             -
                                       -----------

                Total                    $14,293
                                       ===========


The Company leases certain transportation and warehouse equipment under capital
lease agreements that expire at various dates. At December 31, 2003, minimum
annual payments under capital leases, including interest, are as follows (in
thousands) -

2004                                                                 $72
2005                                                                   2
2006                                                                   2
2007                                                                   1
2008                                                                   -
                                                                  ---------
Total minimum payments                                                77
Less - Amounts representing interest                                  (1)
                                                                  ---------

  Net minimum payments                                                76
Less - Current portion of obligations under capital leases           (71)
                                                                  ---------

  Long-term portion of obligations under capital leases               $5
                                                                  =========

(10)     EMPLOYEE BENEFIT PLANS:

The Company adopted a 401(k) retirement plan during 1996. Substantially all
employees are eligible to participate in the plan and are permitted to
contribute an unlimited percentage of their annual salary, subject to Internal
Revenue Service discrimination testing limitations. The Company has the right to
make discretionary contributions that will be allocated to each eligible
participant. The Company did not make discretionary contributions for the years
ended December 31, 2003, 2002 and 2001.

                                       48
<PAGE>

(11)     INCOME TAXES:

Federal and state income tax provision (benefit) for continuing operations for
the years ended December 31, 2003, 2002 and 2001 are as follows (in thousands) -

                                      2003             2002             2001
                             --------------   --------------   --------------
            Federal-
              Current                $  903            $ 673          ($1,061)
              Deferred                   43             (513)            (535)
              State                     176               30             (184)

                             --------------   --------------   --------------
                                     $1,122             $190          ($1,780)
                             ==============   ==============   ==============


The components of deferred income tax assets and liabilities are as follows (in
thousands) -

                                                                  December 31,
                                                               -----------------
                                                                 2003      2002
                                                               --------  -------
   Deferred income tax assets -
     Current -
        Allowance for doubtful accounts                          $349      $197
        Allowance for doubtful notes                                -       869
        Insurance reserves                                        118       906
        Net operating loss carryforward                           384         -
        Reserves and other, net                                   691       563
                                                               --------  -------
            Total current deferred income tax assets            1,542     2,535
     Non-current -
        Accumulated depreciation and amortization                 152        38
        Capital loss carryforward                                 776       776
                                                               --------  -------
            Total non-current deferred income tax assets          928       814
                                                               --------  -------
   Valuation Allowance                                           (776)   (1,776)
                                                               --------  -------
            Net deferred income tax assets                     $1,694    $1,573
                                                               ========  =======

             Net deferred tax assets                           $1,694    $1,573
                                                               ========  =======

                                       49
<PAGE>

The differences in Federal income taxes provided and the amounts determined by
applying the Federal statutory tax rate (34%) to income (loss) from continuing
operations before income taxes for the years ended December 31, 2003, 2002 and
2001, result from the following (in thousands) -

                                                      2003    2002       2001
                                                    ------   ------   --------

Tax at statutory rate                                 $954    $161    ($2,578)
Add (deduct) the effect of-
   State income taxes, net of Federal benefit          116      20       (129)
   Reserve on deferred tax asset                         -    (190)       190
   Capital loss on sale of subsidiary                    -       -        776
   Nondeductible expenses and other, net                52     199        (39)
                                                    ------   ------   --------
  Provision (benefit) for income taxes              $1,122    $190    ($1,780)
                                                    ======   ======   ========

In 2001, as a result of the loss on the sale of National Express, Inc. (See Note
4), the Company has a capital loss carryforward of approximately $2,300,000
which expires in 2006. Such loss is available to offset future capital gains, if
any. Management has concluded that it is more likely than not that such loss
will not be utilized prior to its expiration. Accordingly, a full valuation
allowance has been provided for this item.

(12)     COMMITMENTS AND CONTINGENCIES:

Operating Leases -

The Company leases its office and warehouse facilities under non-cancelable
operating leases, which expire at various dates through April 2013. The
approximate minimum rental commitments of the Company, under existing agreements
as of December 31, 2003, are as follows (in thousands) -

          2004                                $3,615
          2005                                 3,031
          2006                                 2,280
          2007                                 1,228
          2008                                   460
          Thereafter                             200

Rent expense, primarily for facilities, amounted to approximately $6,973,000,
$6,747,000 and $8,409,000 for the years ended December 31, 2003, 2002 and 2001,
respectively.

Litigation -

In February 1996, Liberty Mutual Insurance Company ("Liberty Mutual") filed an
action against Securities Courier Corporation ("Securities"), a subsidiary of
the Company, Mr. Vincent Brana, an employee of the Company, and certain other
parties in the United States District Court for the Southern District of New
York. Under the terms of its acquisition of Securities, the Company had certain
rights to indemnification from Mr. Brana. In connection with the
indemnification, Mr. Brana has entered into a settlement agreement and executed
a promissory note (the "Brana Note") in such amount as may be due for any
defense costs or award arising out of this suit. Mr. Brana has agreed to repay
the Company on December 1, 2003, together with interest calculated at a rate per
annum equal to the rate charged the Company by its senior lender. Mr. Brana
delivered 357,301 shares of CD&L common stock to the Company as collateral for
the Brana Note. On September 8, 2000 the parties entered into a settlement
agreement in which Securities and Mr. Brana agreed to pay Liberty Mutual
$1,300,000. An initial payment of $650,000 was made by Securities on October 16,
2000, $325,000 plus interest at a rate of 10.5% per annum was paid in monthly
installments ending July 1, 2001 and the balance of $325,000 plus interest at a
rate of 12.0% per annum was paid in monthly installments ending July 1, 2002.

At December 31, 2002, the Company had a receivable due from Mr. Brana totaling
$2,800,000. As of December 31, 2002, considering the market value of the
collateral and Mr. Brana's failure to provide satisfactory evidence to support
his ability to pay the Brana Note, the Company maintained a $2,800,000 reserve
against the receivable.

                                       50
<PAGE>

In an effort to resolve all outstanding disputes between Mr. Brana and the
Company, a settlement agreement was executed in December 2003. Pursuant to the
agreement, the Company has returned to Mr. Brana the 357,301 shares of CD&L
common stock previously held by the Company as collateral for the Brana Note. In
addition, the agreement provided for an exchange of releases between the
parties. In connection with this agreement, the Brana Note was written off as of
December 31, 2003. Mr. Brana's employment with the Company terminated on
September 1, 2002 and he has served as a paid consultant since that time.

The Company is, from time to time, a party to litigation arising in the normal
course of its business, including claims for uninsured personal injury and
property damage incurred in connection with its same-day delivery operations. In
connection therewith, the Company has recorded reserves of $885,000 and $325,000
as of December 31, 2003 and 2002, respectively.

Also from time to time, federal and state authorities have sought to assert that
independent contractors in the transportation industry, including those utilized
by CD&L, are employees rather than independent contractors. The Company believes
that the independent contractors that it utilizes are not employees under
existing interpretations of federal and state laws. However, federal and state
authorities have and may continue to challenge this position. Further, laws and
regulations, including tax laws, and the interpretations of those laws and
regulations, may change.

Management believes that none of these actions, including the actions described
above, will have a material adverse effect on the consolidated financial
position or results of operations of the Company.

(13)     STOCK OPTION PLANS:

The Company has two stock option plans under which employees and independent
directors may be granted options to purchase shares of Company Common Stock at
or above the fair market value at the date of grant. Options generally vest in
one to four years and expire in 10 years.

Employee Stock Compensation Program -

In September 1995, the Board of Directors adopted, and the stockholders of the
Company approved the Company's Employee Stock Compensation Program (the
"Employee Stock Compensation Program"). The Employee Stock Compensation Program
authorizes the granting of incentive stock options, non-qualified supplementary
options, stock appreciation rights, performance shares and stock bonus awards to
key employees of the Company, including those employees serving as officers or
directors of the Company. The Company initially reserved 1,400,000 shares of
Common Stock for issuance in connection with the Employee Stock Compensation
Program. In June 1998 the Board of Directors adopted and the stockholders of the
Company approved an additional 500,000 shares for issuance under the Employee
Stock Compensation Program. In June 2000 the Board of Directors adopted and the
stockholders of the Company approved the Year 2000 Employee Stock Compensation
Program, which provided an additional 1,350,000 shares for issuance to key
employees of the Company. In June 2001 the Board of Directors adopted and the
stockholders of the Company approved an amendment to the Year 2000 Employee
Stock Compensation Program, which provided an additional 375,000 shares for
issuance to key employees of the Company. In October 2002, the Board of
Directors adopted and the stockholders of the Company approved a second
amendment to the Year 2000 Employee Stock Compensation Program, which provided
an additional 375,000 shares for issuance to key employees of the Company. The
Employee Stock Compensation Programs are administered by a committee of the
Board of Directors (the "Administrators") made up of directors who are
disinterested persons. Options and awards granted under the Employee Stock
Compensation Programs will have an exercise or payment price as established by
the Administrators provided that the exercise price of incentive stock options
may not be less than the fair market value of the underlying shares on the date
of grant. Unless otherwise specified by the Administrators, options and awards
will vest in four equal installments on the first, second, third and fourth
anniversaries of the date of grant.

Stock Option Plans for Independent Directors -

In September 1995, the Board of Directors adopted, and the stockholders of the
Company approved, the Company's 1995 Stock Option Plan for Independent Directors
(the "Director Plan"). The Director Plan authorizes the granting of
non-qualified stock options to non-employee directors of the Company. The
Company has reserved 100,000 shares of Common Stock for issuance in connection
with the Director Plan. In October 2002 the Board of Directors adopted and the
stockholders of the Company approved the 2002 Stock Option Plan for Independent
Directors, which provided an additional 100,000 shares for issuance to
non-employee directors of the Company. The Director Plan is administered by a
committee of the Board of Directors (the "Committee"), none of whom will be
eligible to participate in the Director Plan. The Director Plan provided for an
initial grant of an option to purchase 1,500 shares of Common Stock upon
election as a director of the Company, a second option to purchase 1,000 shares
of Common Stock upon the one-year anniversary of such director's election and
subsequent annual options for 500 shares of Common Stock upon the anniversary of
each year of service as a director. In June 1998 the stockholders of the Company
approved amendments to the Director Plan. The amendments replaced the annual
stock option grants of the original plan with quarterly grants of 1,250 shares
of stock options on the first trading day of each fiscal quarter commencing on
October 1, 1997. In August of 1998 and February of 1999, the Committee approved
further amendments to the Director Plan. These amendments replaced the time
period to exercise vested options after a participating director has served as a
director for a period of three consecutive years or more. The Director Plan was
amended to provide that in the event any holder, who has served as a director
for three or more consecutive years, shall cease to be a director for any
reason, including removal with or without cause or death or disability, all
options (to the extent exercisable at the termination of the director's service)
shall remain exercisable by the holder or his lawful heirs, executors or
administrators until the expiration of the ten-year period following the date
such options were granted.

                                       51
<PAGE>

Information regarding the Company's stock option plans is summarized below:

                                                                   Weighted
                                                  Number           Average
                                                    of             Exercise
                                                  Shares            Price
                                              ------------      ----------------
   Shares under option:
     Outstanding at December 31, 2000           2,423,685             $3.77

       Granted                                     55,000             $0.56
       Exercised                                        -                 -
       Canceled                                  (534,969)            $4.79
                                              ------------

     Outstanding at December 31, 2001           1,943,716             $3.25

       Granted                                     75,000             $ .52
       Exercised                                        -                 -
       Canceled                                   (85,063)            $6.40
                                              ------------

     Outstanding at December 31, 2002           1,933,653             $3.01

       Granted                                     30,000              $.60
       Exercised                                        -                 -
       Canceled                                   (48,456)            $4.90
                                              ------------

     Outstanding at December 31, 2003           1,915,197             $2.93
                                              ============
   Options exercisable at:
     December 31, 2001                          1,685,372             $3.41
                                              ============      ================
     December 31, 2002                          1,898,487             $3.02
                                              ============      ================
     December 31, 2003                          1,883,531             $2.96
                                              ============      ================

At December 31, 2003, options available for grant under the Employee Stock
Compensation Plans and the Director Plans total 2,242,303 and 42,500 shares,
respectively.

                                       52
<PAGE>

The following summarizes information about option groups outstanding and
exercisable at December 31, 2003:

<TABLE>
<CAPTION>
                                       Outstanding Options                                Exercisable Options
                      -------------------------------------------------------     ------------------------------------
                           Number                                                      Number
                         Outstanding           Weighted           Weighted           Exercisable           Weighted
    Range of                as of               Average           Average               as of              Average
    Exercise            December 31,           Remaining          Exercise          December 31,           Exercise
     Prices                 2003                 Life              Price                2003                Price
------------------    ------------------    ----------------    -------------     ------------------     -------------
<S>                   <C>                   <C>                 <C>               <C>                    <C>
    $0.350 -
        $1.438                160,000              7.94               $0.59             128,334               $0.60
    $1.813 -
       $1.813                 650,000              6.45               $1.81             650,000               $1.81
    $2.000 -
       $2.625                 540,085              4.71               $2.35             540,085               $2.35
    $2.688 -
       $4.875                 392,638              4.54               $3.62             392,638               $3.62
    $6.000 -
       $13.000                172,474              2.80               $9.49             172,474               $9.49
                      ------------------                                          ------------------
     Totals                 1,915,197              5.36               $2.93           1,883,531               $2.96
                      ==================                                          ==================
</TABLE>

(14)     EMPLOYEE STOCK PURCHASE PLAN

Effective April 1, 1998, CD&L adopted an Employee Stock Purchase Plan (the
"Employee Purchase Plan") which was amended in 1999. The Employee Purchase Plan
permitted eligible employees to purchase CD&L common stock at 85% of the closing
market price on the last day prior to the commencement or the end of the
purchase period. The Employee Purchase Plan provided for the purchase of up to
500,000 shares of common stock. No shares were issued under the Employee
Purchase Plan during 2003, 2002 or 2001.

(15)     SHAREHOLDER PROTECTION RIGHTS AGREEMENT

On December 27, 1999, the Board of Directors of the Company announced the
declaration of a dividend of one right (a "Right") for each outstanding share of
Common Stock of the Company held of record at the close of business on January
6, 2000, or issued thereafter and prior to the time at which they separate from
the Common Stock and thereafter pursuant to options and convertible securities
outstanding at the time they separate from the Common Stock. The Rights were
issued pursuant to a Stockholder Protection Rights Agreement, dated as of
December 27, 1999, between the Company and American Stock Transfer & Trust
Company, as Rights Agent. Each Right entitles its registered holder to purchase
from the Company, after the Separation Time, one one-hundredth of a share of
Participating Preferred Stock, par value $0.01 per share, for $27.00 (the
"Exercise Price"), subject to adjustment. The holders of Rights will, solely by
reason of their ownership of Rights, have no rights as stockholders of the
Company, including, without limitation, the right to vote or to receive
dividends.

The Rights will separate from the Common Stock if any person or group (subject
to certain exceptions including the April 14, 2004 financial restructuring)
becomes the beneficial owner of fifteen percent or more of the Common Stock or
any person or group (subject to certain exceptions) makes a tender or exchange
offer that would result in that person or group beneficially owning fifteen
percent or more of the Common Stock. In April 2004, the Company amended the Plan
to exclude persons participating in the April 14, 2004 financial restructuring
so long as their ownership was less than 30%. Upon separation of the Rights from
the Common Stock, each Right (other than Rights beneficially owned by the
acquiring person or group, which Rights shall become void) will constitute the
right to purchase from the Company that number of shares of Common Stock of the
Company having a market price equal to twice the Exercise Price for an amount
equal to the Exercise Price. In addition, if a person or group who has acquired
beneficial ownership of fifteen percent or more of the Common Stock controls the
Board of Directors of the Company and the Company engages in certain business
combinations or asset sales, then the holders of the Rights (other than the
acquiring person or group) will have the right to purchase common stock of the
acquiring company having a market value equal to two times the Exercise Price.

In certain circumstances, the Board of Directors may elect to exchange all of
the then outstanding Rights (other than Rights beneficially owned by the
acquiring person or group, which Rights become void) for shares of Common Stock
at an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect certain changes in the capital stock of the Company. In
addition, the Board of Directors may, prior to separation from the Common Stock,
redeem all (but not less than all) the then outstanding Rights at a price of
$.01 per Right. Unless redeemed, exchanged or amended on an earlier date, the
Rights will expire on the tenth anniversary of the record date.

                                       53
<PAGE>

At December 31, 2003 and 2002, no Rights have been exchanged.

(16)     RELATED PARTY TRANSACTIONS:

Leasing Transactions -

Effective as of February 1, 2003, the Company has leased its former vehicle
repair facility to a company whose principal is a shareholder and former
executive of the Company. During the year ended December 31, 2003, the Company
made payments for vehicle maintenance and repairs of approximately $226,000.
During 2003, the Company sold 68 vehicles for approximately $45,000 to this
company. Additionally, the Company has recorded rental income from this company
of approximately $33,000 during the year ended December 31, 2003.

Certain subsidiaries of the Company paid approximately $303,000, $356,000 and
$425,000 for the years ended December 31, 2003, 2002 and 2001, respectively, in
rent to certain directors, stockholders or companies owned and controlled by
directors or stockholders of the Company (other than the transaction noted
above). Rent is paid for office, warehouse facilities and transportation
equipment. At December 31, 2003 and 2002, $12,000 and $8,000, respectively, are
owed to related parties in connection with these transactions.


Note Receivable from Stockholder -

In connection with his indemnification to the Company under the terms of the
Company's acquisition of Securities, Mr. Vincent Brana, an employee of the
Company, has entered into a settlement agreement and executed a promissory note
(the "Brana Note") in the amount of $500,000 or such greater amount as may be
due under the settlement agreement. The Company has agreed to advance certain
legal fees and expenses related to certain litigation involving Securities, for
which Mr. Brana has indemnified the Company. At December 31, 2003 and 2002, the
Company had a receivable due from Mr. Brana totaling $2,800,000. Mr. Brana has
agreed to repay the Company on December 1, 2003, together with interest
calculated at a rate per annum equal to the rate charged the Company by its
senior lender. Mr. Brana delivered 357,301 shares of CD&L common stock to the
Company as collateral for the Brana Note. On September 8, 2000 the parties
entered into a settlement agreement in which Securities and Mr. Brana agreed to
pay Liberty Mutual $1,300,000. An initial payment of $650,000 was made by
Securities on October 16, 2000, $325,000 plus interest at a rate of 10.5% per
annum was paid in monthly installments ending July 1, 2001 and the balance of
$325,000 plus interest at a rate of 12.0% per annum was paid in monthly
installments ending July 1, 2002.

At December 31, 2002, the Company had a receivable due from Mr. Brana totaling
$2,800,000. As of December 31, 2002, considering the market value of the
collateral and Mr. Brana's failure to provide satisfactory evidence to support
his ability to pay the Brana Note, the Company maintained a $2,800,000 reserve
against the receivable.

In an effort to resolve all outstanding disputes between Mr. Brana and the
Company, a settlement agreement was executed in December 2003. Pursuant to the
agreement, the Company has returned to Mr. Brana the 357,301 shares of CD&L
common stock previously held by the Company as collateral for the Brana Note. In
addition, the agreement provided for an exchange of releases between the
parties. In connection with this agreement, the Brana Note was written off as of
December 31, 2003. As the note was fully reserved, there was no net income
statement impact. Mr. Brana's employment with the Company terminated on
September 1, 2002 and he has served as a paid consultant since that time.

(17)     SUBSEQUENT EVENTS:

2004 Acquisition -

On March 1, 2004, the Company consummated a transaction providing for the
repurchase of certain Indiana-based assets and liabilities sold to First Choice
in June 2001 (See Note 4). The acquisition, which includes the release of
certain non-compete agreements, we believe will support and enhance our business
growth opportunities in Indiana. Consideration for the repurchase includes
cancellation of a certain note receivable owed by First Choice of approximately
$1,600,000 plus a three year contingent earn-out based on future net revenue
generated by the accounts repurchased.

                                       54
<PAGE>

2004 Restructuring of Senior Notes Debt

At December 31, 2003, the Company was indebted to Paribas and Exeter
(collectively "Paribas") in the sum of approximately $11,000,000 pursuant to a
subordinated note bearing interest at 12% per annum (see Senior Notes in Note
9). On April 14, 2004, an agreement was reached among the Company, Paribas and
certain members of CD&L management and others ("Investors") as to the financial
restructuring of the Senior Notes. Paribas agreed to convert a portion of its
existing debt due from CD&L into equity and to modify the terms of its
subordinated note if the Investors purchase a portion of the note and accept
similar modifications. The nature of the restructuring is as follows:

         (a)      Paribas exchanged notes in the aggregate principal amount of
                  $4.0 million for shares of the Series A Convertible Redeemable
                  Preferred Stock of the Company, par value $.001 per share
                  ("Preferred Stock") with a liquidation preference of $4.0
                  million. The Preferred Stock is convertible into an aggregate
                  of 4,000,000 shares of Common Stock, does not pay dividends
                  (unless dividends are declared and paid on the Common Stock),
                  and is redeemable by the Company for the liquidation value.
                  Holders of the Preferred Stock will have the right to elect
                  two directors.

         (b)      Paribas and the Company amended the terms of the $7.0 million
                  balance of the Notes, and then exchanged the original notes
                  for the amended and restated notes, which consist of two
                  series of convertible notes, the Series A Convertible
                  Subordinated Notes (the "Series A Convertible Notes") in the
                  principal amount of $3.0 million and the Series B Convertible
                  Subordinated Notes ("Series B Convertible Notes") in the
                  principal amount of $4.0 million (collectively, the
                  "Convertible Notes"). The Loan Agreement was amended and
                  restated to reflect the terms of the substituted Series A
                  Convertible Notes and the Series B Convertible Notes,
                  including the elimination of most financial covenants.
                  Principal is due in a balloon payment at the maturity date of
                  April 14, 2011. The Convertible Notes bear interest at a rate
                  of 9% for the first two years of the term, 10.5% for the next
                  two years, and 12% for the final three years of the term. The
                  terms of the two series of Convertible Notes are identical
                  except for the conversion price ($1.016 for the Series A
                  Convertible Notes, the average closing price for the Company's
                  shares for the 5 days prior to the closing, and $2.032 for the
                  Series B Convertible Notes).

         (c)      The Investors purchased the Series A Convertible Notes from
                  Paribas for a purchase price of $3.0 million.

         (d)      The Company issued an additional $1.0 million of Series A
                  Convertible Notes to the Investors for an additional payment
                  of $1.0 million, the proceeds of which were used to reduce
                  short-term debt.

         (e)      The Investors, Paribas and the Company entered into a
                  Registration Rights Agreement pursuant to which the shares of
                  the Company's common stock issuable upon conversion of the
                  Preferred Stock and the Convertible Notes will be registered
                  for resale with the Securities and Exchange Commission.

In addition, the Company has agreed to commence a rights offering to its common
stockholders as soon as practical, and in any event prior to January 14, 2005,
whereby the common shareholders of the Company shall have the right to acquire
at least $2 million of additional shares of common stock of the Company in the
aggregate at a price equal to the conversion price of the Series A Convertible
Notes.

                                       55
<PAGE>

The following summarized unaudited pro forma financial information was prepared
assuming that the restructuring of the Senior Notes debt occurred on December
31, 2003 (in thousands):

<TABLE>
<CAPTION>
                                                                  As Reported           Adjustment             Pro Forma
                                                            ------------------------  ---------------       ----------------
<S>                                                         <C>                       <C>                   <C>

Total assets                                                     $40,352                       $-               $40,352
                                                             =======================  ===============       =================

Liabilities
   Current liabilities
      Short-term borrowings                                        5,767                   (1,000)   (a)          4,767
      Current maturities of long-term debt                         2,585                   (1,000)   (a)          1,585
      Accounts payable and accrued liabilities                    14,392                     (151)   (b)         14,241
                                                             -----------------------  ---------------       -----------------
      Total current liabilities                                   22,744                   (2,151)               20,593
                                                             -----------------------  ---------------       -----------------
   Long-term liabilities
      Long-term debt                                              11,785                   (1,624)   (a)(b)      10,161
      Other long-term liabilities                                    240                        -                   240
                                                             -----------------------  ---------------       -----------------
   Total liabilities                                              34,769                   (3,775)               30,994
                                                             -----------------------  ---------------       -----------------

Stockholders' equity
   Preferred stock                                                     -                    4,000    (a)          4,000
   Common stock                                                        8                        -                     8
   Additional paid-in capital                                     12,883                        -                12,883
   Treasury stock                                                   (162)                       -                  (162)
   Accumulated deficit                                            (7,146)                    (225)   (b)         (7,371)
                                                             -----------------------  ---------------       -----------------
   Total stockholders' equity                                      5,583                    3,775                 9,358
                                                             -----------------------  ---------------       -----------------

Total liabilities and stockholders' equity                       $40,352                       $-               $40,352
                                                             =======================  ===============       =================
</TABLE>

(a)      Represents the initial entry to record the restructuring: (i) the
         conversion of $4,000,000 of long-term debt into Preferred Stock, (ii)
         the issuance of $4,000,000 of long-term debt to Investors, and (iii)
         the repayment of $1,000,000 of current maturities of long-term debt and
         $2,000,000 of long-term debt related to the original Paribas Senior
         Notes.

(b)      Represents the write-off of the unamortized debt discount balance of
         $376,000 as of December 31, 2003 related to the original Senior Notes
         and the related tax effect.

The Company has reviewed SFAS 150 with respect to this transaction and has
determined that the Preferred Shares issued are properly treated as equity, as
the shares are not mandatorily redeemable at any time. As the interest on the
Investor Notes and the new Paribas note increase over the term of the notes, the
Company will record the associated interest expense on a straight-line basis,
which will give rise to accrued interest over the early term of the notes.

(18)     SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest and income taxes (net of refunds received) for the years
ended December 31, 2003, 2002 and 2001 was as follows (in thousands) -

                                            2003          2002          2001
                                        ------------  ------------  ------------
  Interest                                 $1,739        $2,507        $3,171
  Income taxes                               $899         ($281)      ($1,132)

Supplemental schedule of non-cash financing activities for the years ended
December 31, 2003, 2002 and 2001 was as follows (in thousands) -

                                                     2003      2002      2001
                                                   --------  --------  ---------
  Capital lease obligations incurred                  $-        $8       $693
  Reduction of purchase price for businesses
     previously acquired, net                          -         -        559

                                       56
<PAGE>

(19)     CHANGES TO DECEMBER 31, 2001 FINANCIAL STATEMENTS:

Subsequent to the issuance of the Company's 2001 financial statements, the
Company determined that the write-off of the $2,500,000 note receivable from the
purchasers of Sureway, which was included in discontinued operations, should be
included in continuing operations. As a result, the consolidated financial
statements for the year ended December 31, 2001 have been restated.

The impact of this restatement on reported operations is as follows (in
thousands) -

                                        As Originally Reported      As Restated
                                        -----------------------     ------------

Loss from continuing operations                 ($3,964)               ($5,804)
Loss from discontinued operations                (2,305)                  (465)
Net loss                                        ($6,269)               ($6,269)

Basic loss per share:
  Continuing operations                          ($.52)                 ($.76)
  Discontinued operations                         (.30)                  (.06)
  Net loss per share                             ($.82)                 ($.82)

Diluted loss per share:
  Continuing operations                          ($.52)                 ($.76)
  Discontinued operations                         (.30)                  (.06)
  Net loss per share                             ($.82)                  ($.82)



                                       57
<PAGE>

(20)     QUARTERLY FINANCIAL DATA (UNAUDITED):

Unaudited quarterly financial data for the years ended December 31, 2003 and
2002 was as follows (in thousands, except per share amounts) -

<TABLE>
<CAPTION>
                                                                               Quarter Ended
                                                  -------------------------------------------------------------------------
                                                     March 31,          June 30,        September 30,       December 31,
                                                  ----------------  -----------------  -----------------  -----------------
<S>                                               <C>               <C>                 <C>                <C>
Year ended December 31, 2003:
  Revenue                                             $40,307           $40,887            $40,846            $44,043
  Gross Profit                                          7,264             7,738              8,297              9,436
  Net Income (Loss)                                      $606(b)           $222               $442               $413
  Basic Income (Loss) Per Share                          $.08              $.03               $.06               $.05
  Diluted Income (Loss) Per Share                        $.07              $.03               $.05               $.05
  Basic Weighted Average Common
        Shares Outstanding                              7,659             7,659              7,659              7,659
  Diluted Weighted Average Common
        Shares Outstanding                              8,170             8,165              8,175              8,205

Year ended December 31, 2002:
  Revenue                                             $38,549           $38,885            $38,921            $40,877
  Gross Profit                                          7,928             8,232              7,681              6,239
  Net Income (Loss)                                        $6              $440               $381              $(542)(a)
  Basic Income (Loss) Per Share                          $.00              $.06               $.05              $(.07)
  Diluted Income (Loss) Per Share                        $.00              $.05               $.05              $(.07)
  Basic Weighted Average Common
        Shares Outstanding                              7,659             7,659              7,659              7,659
  Diluted Weighted Average Common
        Shares Outstanding                              8,167             8,169              8,166              7,659

</TABLE>

       (a) During the fourth quarter of 2002, the Company recorded an additional
           reserve of $300,000 in connection with a related party note
           receivable (Note 16).
       (b) During the first quarter of 2003, the Company recorded a gain of
           $1,034,000 as a result of the exchange of the Sureway Note Receivable
           previously discussed under "Discontinued Operations" in Item 7. of
           this Annual Report.

                                       58
<PAGE>

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures


For information regarding the Company's change in independent auditors from
Arthur Andersen LLP to Deloitte & Touche LLP, please refer to our Current Report
on Form 8-K filed with the Commission on August 9, 2002. We have had no
disagreements with our independent auditors regarding accounting or financial
disclosure matters.


Item 9A.  Controls and Procedures

         (a)      Disclosure controls and procedures. As of December 31, 2003,
                  CD&L management, including the principal executive officer and
                  principal financial officer, evaluated the Company's
                  disclosure controls and procedures related to the recording,
                  processing, summarization and reporting of information in its
                  periodic reports that the Company files with the SEC. These
                  disclosure controls and procedures have been designed to
                  ensure that (a) material information relating to the Company,
                  including its consolidated subsidiaries, is made known to CD&L
                  management, including these officers, by other employees of
                  the Company and its subsidiaries, and (b) this information is
                  recorded, processed, summarized, evaluated and reported, as
                  applicable, within the time periods specified in the SEC's
                  rules and forms. Based upon the evaluation, the Company's
                  principal executive officer and principal financial officer
                  concluded that the Company's disclosure controls and
                  procedures are effective in ensuring that material information
                  relating to the Company, including its consolidated
                  subsidiaries, is made known to them by others within those
                  entities, particularly during the period in which this annual
                  report on Form 10-K was being prepared.

         (b)      Changes in internal controls over financial reporting. There
                  have been no changes in the Company's internal control over
                  financial reporting that occurred during the Company's last
                  fiscal quarter to which this report relates that have
                  materially affected, or are reasonably likely to materially
                  affect, the Company's internal control over financial
                  reporting.

                                       59
<PAGE>

                                    PART III

Item 10.  Directors and Executive Officers of the Company

         Set forth below are the names and ages (as of March 1, 2004) of each of
the directors and executive officers, the other positions and offices presently
held by each such person within the Company, the period during which each such
person has served on the Board of Directors of the Company, and the principal
occupations and employment of each such person during the past five years. In
each instance in which dates are not provided in connection with a director's
business experience, such director has held the position indicated for at least
the past five years.

         Albert W. Van Ness, Jr., 61, has served as the Chairman of the Board,
Chief Executive Officer and Director of CD&L since January 1997. He was formerly
the President and Chief Operating Officer of Club Quarters, LLC, a privately
held hotel management company and remains a member partner. In the early
nineties, Mr. Van Ness served as Director of Managing People & Productivity, a
senior management consulting firm. During most of the eighties, Mr. Van Ness
held various executive positions with Cunard Line Limited, a passenger ship and
luxury hotel company, including Executive Vice President and Chief Operating
Officer of the Cunard Leisure Division and Managing Director and President of
the Hotels and Resorts Division. Earlier in his career Mr. Van Ness served as
the President of Seatrain Intermodal Services, Inc., a cargo shipping company.
Mr. Van Ness held various management positions at the start of his professional
life with Ford Motor Company, Citibank and Hertz. Mr. Van Ness majored in
Sociology and Economics and received a B.A. and M.A. degree and completed his
coursework towards his doctorate in Economics. He attended Duke University,
Northern State University, South Dakota State University and Syracuse
University.

         William T. Brannan, 55, has served as President, Chief Operating
Officer and Director of CD&L since November 1994. From January 1991 until
October 1994, Mr. Brannan served as President, Americas Region - US Operations,
for TNT Express Worldwide, a major European-based overnight express delivery
company. Prior to that, Mr. Brannan spent 10 years with United Parcel Service
where he served as Vice President and General Manager of UPS Truck Leasing, a
wholly-owned UPS subsidiary which was formed by Mr. Brannan in 1981. Mr. Brannan
has more than 25 years of experience in the transportation and logistics
industry.

         Michael Brooks, 50, has served as Director of the Company since
December 1995 and as Group Operations President since December 2000. Mr. Brooks
previously had been the President of Silver Star Express, Inc., a subsidiary of
the Company, since November 1995. Prior to the merger of Silver Star Express,
Inc. into the Company, Mr. Brooks was President of Silver Star Express, Inc.
since 1988. Mr. Brooks has more than 25 years of experience in the same-day
delivery and distribution industries. In addition, Mr. Brooks is currently a
Member of the Express Carriers Association and various other transportation
associations.

         Thomas E. Durkin III, 50, Director since 1999. Mr. Durkin was appointed
as Vice President of Corporate Development, General Counsel and Secretary of
Capital Environmental Resource, Inc. in October 2001. He is also a partner to
Durkin & Durkin, a New Jersey based law firm, with whom Mr. Durkin practiced as
a partner from September 1978 until September 1997. Mr. Durkin served as a
consultant to Waste Management Inc., a multibillion dollar publicly held
international solid waste management company from January 2000 to September
2001. From October 1997 through December 1999, Mr. Durkin served as area Vice
President of Business Development of Waste Management Inc. In addition, Mr.
Durkin has served as a partner of two privately held real estate brokerage
companies. Mr. Durkin graduated from Fordham University in 1975 and graduated
Cum Laude from Seton Hall University School of Law in 1978.

         Jon F. Hanson, 67, Director since 1997. Mr. Hanson has served as the
President and Chairman of Hampshire Management Company, a real estate investment
firm since December 1976. From April 1991 to the present, Mr. Hanson has served
as a director to the Prudential Insurance Company of America. In addition, Mr.
Hanson currently serves as a director with the United Water Resources and the
Orange and Rockland Utilities from April 1985 and September 1995, respectively.

         Marilu Marshall, 58, Director since 1997. Vice President Human
Resources - North America for Estee Lauder Co. Inc. since October 1998. From
November 1987 until September 1998, Ms. Marshall served as Senior Vice-President
and General Counsel for Cunard Line Limited. Prior thereto, from July 1984 to
September 1987 Ms. Marshall served as the Vice-President and General Counsel of
GNOC, Corp., t/a Golden Nugget Hotel & Casino.

                                       60
<PAGE>

         Matthew Morahan, 54, Director since 2000. Mr. Morahan has been a
private investor since 1997. From 1994 until 1997, Mr. Morahan served as
Executive Vice President of the Macro Hedge Fund of Summit Capital Advisors LLC.
Prior thereto, Mr. Morahan served as Managing Director of the High Yield
Department of Paine Webber Group from 1991 to 1994. From 1976 to 1990, he served
as Partner and Managing Director of Wertheim & Co. Mr. Morahan served as Vice
President of the Corporate Bond Department for Hornblower & Weeks, Hemphill,
Noyes & Co. from 1971 to 1976.

         John A. Simourian, 69, Director since 1999. Mr. Simourian has served as
Chairman of the Board and Chief Executive Officer of Lily Transportation Corp.
("Lily"), a privately held truck leasing and dedicated logistics company, since
1958 when Mr. Simourian founded Lily. Lily currently employs approximately 750
employees and leases and or operates 4,000 vehicles out of 27 locations from New
England to North Carolina. Mr. Simourian attended Harvard University where he
received his undergraduate degree in 1957 and his graduate degree from the
Harvard Business School in 1961. In 1982 Mr. Simourian was elected to the
Harvard University Hall of Fame. Mr. Simourian also served in the United States
Navy from 1957 to 1959.

         John S. Wehrle, 52, Director since 1997. Managing Partner of Gryphon
Holdings, L.P. and Gryphon Holdings II, L.P. since January 1999. From August
1997 to December 1998, Mr. Wehrle served as President and CEO of Heartland
Capital Partners, L.P. Prior thereto, Mr. Wehrle served as Vice President and
Head of Mergers & Acquisitions for A.G. Edwards & Sons, Inc. from July 1994 to
July 1997. From 1989 to 1994 Mr. Wehrle served as Vice President-Financial
Planning for The Dyson-Kissner-Moran Corporation. He also served as Managing
Director of Chase Manhattan Bank, N.A. for three years from August 1986 to
October 1989 where he was engaged in the execution of Leveraged Acquisitions.
From 1976 to 1986 Mr. Wehrle held various positions with both Price Waterhouse
and Touche Ross & Co. in both New York and London.

         Russell J. Reardon, 54, has served as Vice President - Chief Financial
Officer since November 1999. Mr. Reardon previously had been Vice President -
Treasurer of CD&L since January 1999. Prior thereto, from September 1998 until
January 1999 Mr. Reardon was Chief Financial Officer and Secretary of Able
Energy, Inc. a regional energy retailer. From April 1996 until June 1998, Mr.
Reardon was Chief Financial Officer and Secretary of Logimetrics, Inc. a
manufacturer of broad-band wireless communication devices. He earned an
accounting degree and an MBA in Finance from Fairleigh Dickinson University.

         Mark T. Carlesimo, 50, has served as Vice President - General Counsel
and Secretary of CD&L since September 1997. From July 1983 until September 1997,
Mr. Carlesimo served as Vice President of Legal Affairs of Cunard Line Limited.
Earlier in his career, Mr. Carlesimo served as Staff Counsel to Seatrain Lines,
Inc., a cargo shipping company and was engaged in the private practice of law.
Mr. Carlesimo received a B.A. in Economics from Fordham University in 1975 and
received his law degree from Fordham University School of Law in 1979. Mr.
Carlesimo is a Member of the Bar of the states of New York and New Jersey.

         James J. Cosentino, 49, was appointed Vice President - Corporate
Controller in May 2003. Prior to his appointment, Mr. Cosentino held several
financial management positions with both publicly and privately owned companies.
From 1980 through 1992 he was with the Macmillan Publishing Company and more
recently, from 1996 to 2002, he was the Controller of Prestige Window Fashions.
Mr. Cosentino earned his undergraduate degree from Westminster College and an
MBA in Finance from Fairleigh Dickinson University. Mr. Cosentino is a member of
the New Jersey State Society of CPAs and the Financial Executive Institute
(FEI).


Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company's directors, certain
officers and persons holding more than 10% of a registered class of the
Company's equity securities to file with the Securities and Exchange Commission
and to provide the Company with initial reports of ownership, reports of changes
in ownership and annual reports of ownership of Common Stock and other equity
securities of the Company. Based solely upon a review of such reports furnished
to the Company by its directors and executive officers, the Company believes
that all Section 16(a) reporting requirements were timely fulfilled during 2003.

                                       61
<PAGE>

Code of Ethics

The Company has adopted a code of ethics for senior financial officers of the
Company. A copy of this code of ethics has been filed as Exhibit 14.1 to this
Annual Report.

Audit Committee Financial Expert

The Company has determined that John S. Wehrle, the audit committee chairperson,
is an independent audit committee financial expert as defined by Item 401(h) of
Regulation S-K.

Item 11.  Executive Compensation

         The following table summarizes certain information relating to
compensation for services rendered during the years ended December 31, 2001,
2002 and 2003 to each person serving as the Chief Executive Officer of the
Company and each of the Company's four other most highly paid executive officers
whose compensation exceeded $100,000.

<TABLE>
<CAPTION>
                                                                                          Long-Term
                                                Annual Compensation                   Compensation (1)
                                ------------------------------------------------------------------------
                                                                                           Awards
                                ------------------------------------------------------------------------
                                                                          Other          Securities
                                                                          Annual         Underlying
                                                                         Compen-          Options/           All Other
           Name and                        Salary         Bonus           sation            SARs            Compensation
      Principal Position         Year        ($)           ($)            ($)(2)             (3)                ($)
------------------------------  -----     ---------      --------       -----------      ----------         ------------
<S>                             <C>       <C>            <C>            <C>              <C>                <C>
Albert W. Van Ness, Jr.         2003        252,875         -               -                   -                -
   Chairman and Chief           2002        299,988       75,000            -              25,000                -
   Executive Officer            2001        288,119      173,625            -              25,000                -

William T. Brannan              2003        299,988            -            -                   -                -
   President and Chief          2002        299,988       76,229            -                   -                -
   Operating Officer            2001        275,764       39,375            -                   -                -

Michael Brooks                  2003        240,923            -            -                   -                -
   Group Operations             2002        239,077       61,525            -                   -                -
   President                    2001        218,461       32,500            -                   -                -

Russell J. Reardon              2003        201,144            -            -                   -                -
   Chief Financial Officer      2002        200,000       51,201            -                   -                -
                                2001        185,385       37,500            -                   -                -

Mark Carlesimo                  2003        166,933            -            -                   -                -
   General Counsel and          2002        153,173       24,163            -                   -                -
   Secretary                    2001        146,154       20,250            -                   -                -

</TABLE>
-----------------

(1)      The Company did not grant any restricted stock awards or stock
         appreciation rights or make any long-term incentive plan pay-out during
         the years ended December 31, 2001, 2002 and 2003.

(2)      Excludes certain personal benefits, the total value of which was less
         than the lesser of either $50,000 or 10% of the total annual salary and
         bonus for each of the executives.

(3)      Comprised solely of incentive or non-qualified stock options. See
         "Stock Option Plans - Employee Stock Compensation Program."

                                       62
<PAGE>

Employment Agreements; Covenants-Not-To-Compete

         On or about November 15, 2002, Mr. Van Ness entered into an amended
Employment Agreement with the Company (the "2003 Agreement"). The 2003 Agreement
commenced on January 5, 2003 and continues through the close of business on May
1, 2005. The 2003 Agreement provides for an annual salary of $250,000 per year
subject to annual increases as determined by the Compensation Committee. In
addition, the 2003 Agreement provides for the right to receive an annual bonus
equal to up to 100% of Mr. Van Ness' then current base salary subject to the
Company attaining certain targets. Mr. Van Ness continues to serve as the
Company's Chairman of the Board and Chief Executive Officer.

         The 2003 Agreement provides that, in the event of a termination of
employment by the Company for any reason other than "cause" or "disability" (as
defined in the 2003 Agreement) or by Mr. Van Ness as a result of a material
breach by the Company, then Mr. Van Ness will be entitled to receive for the
remainder of the term all base salary due, all annual bonuses and all other
benefits and prerequisites. In the event that Mr. Van Ness' employment
terminates within 360 days of a "change in control" (as defined in the 2003
Agreement), Mr. Van Ness will be entitled to receive two times the sum of his
then-current base salary and the highest potential annual bonus during his
employment with the Company. Mr. Van Ness' employment agreement is subject to
certain non-competition, non-solicitation and anti-raiding provisions.

         Effective as of May 1, 2000 Messrs. Brannan, Brooks, Reardon and
Carlesimo entered into five year employment agreements with the Company. Annual
salaries for those individuals under the agreement are currently $300,000,
$250,000, $250,000 and $185,000, respectively.

         Each agreement contains identical terms and conditions (other than
salary) including covenants against competition and change in control
provisions. The change in control provision provides that if the employment with
the Company is terminated for any reason by either the employee or the Company
within six months following a change in control of the Company, the employee
will be entitled to receive a lump sum payment equal to two (2) times the sum of
employee's then current base salary plus the highest annual bonus payment made
to the employee during his employment with the Company. Each employment
agreement also contains non-competition covenants that will continue for two
years following termination of employment unless termination was by the Company
without cause or by the employee as a result of a breach of the employment
agreement by the Company in which event the covenants against competition will
cease upon termination of employment.


                                       63
<PAGE>

Stock Option Plans

During 2003, the Company did not grant any stock options to purchase Common
Stock or stock appreciation rights to any of the executives named in the Summary
Compensation Table above.



               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                        AND FY-END OPTION/SAR VALUES (1)

<TABLE>
<CAPTION>
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
                                                                     Number of Securities
                                                                    Underlying Unexercised      Value of Unexercised
                                                                      Options/SARs at        In-The-MoneyOptions/SARs
                                 Shares Acquired       Value              FY-End (#)              at FY-End ($)(3)
                                   on Exercise        Realized           Exercisable/               Exercisable/
             Name                     (#)(2)           ($)(2)           Unexercisable              Unexercisable
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
<S>                              <C>               <C>             <C>                       <C>
Albert W. Van Ness, Jr.                 --               --                       672,814/0             -/-
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
William T. Brannan                      --               --                       261,166/0             -/-
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
Michael Brooks                          --               --                       203,461/0             -/-
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
Russell J. Reardon                      --               --                       177,500/0             -/-
-------------------------------- ----------------- --------------- ------------------------- ---------------------------
Mark Carlesimo                          --               --                        36,250/0             -/-
-------------------------------- ----------------- --------------- ------------------------- ---------------------------

-------------------------------- ----------------- --------------- ------------------------- ---------------------------
</TABLE>

-------------
(1)      No stock appreciation rights have been granted by the Company.

(2)      No options were exercised in 2003.

(3)      As of December 31, 2003, the fair market value of a share of Common
         Stock (presumed to equal the closing sale price as reported on the
         American Stock Exchange) was $.73.

Compensation of Directors

Directors who are employees of the Company do not receive additional
compensation for serving as directors. Effective in 1997, each director who is
not an employee of the Company received an annual retainer of $16,000 ($26,000
and $18,000 for the Audit and Compensation Committee chairperson, respectively).
The total directors fees earned by non-employee directors in 2003 was $100,000.
Directors of the Company are reimbursed for out-of-pocket expenses incurred in
their capacity as directors of the Company. Non-employee directors also receive
stock options under the Company's 1995 Stock Option Plan. The Company granted
quarterly options of 1,250 shares at fair market value to each of the
non-employee directors.

Compensation Committee Interlocks and Insider Participation

The Company's Compensation Committee is comprised currently of Ms. Marilu
Marshall, Chair, Mr. Thomas E. Durkin III, Mr. Matthew J. Morahan, and Mr. John
S. Wehrle. None of the Committee's members have been an officer or employee of
the Company. At present, no executive officer of the Company and no member of
its Compensation Committee is a director or compensation committee member of any
other business entity which has an executive officer that sits on the Company's
Board of Directors or Compensation Committee.

                                       64
<PAGE>

Item 12. Security Ownership of Certain Beneficial Owners and Management

         Based upon information available to the Company, the following
stockholders beneficially owned more than 5% of the Common Stock as of April 14,
2004.

NAME AND ADDRESS              NUMBER OF SHARES    PERCENT OF
OF BENEFICIAL OWNER           BENEFICIALLY OWNED  CLASS

BNJ Paribas                   6,411,762(1)        45.6%
Exeter Capital and Venture
C/O BNP Paribas
787 Seventh Avenue
New York, NY 10019

Albert W. Van Ness, Jr.       1,399,525(2)        15.5%
80 Wesley Street
South Hackensack,
New Jersey 07606

Michael Brooks                1,129,300(3)        12.9%
80 Wesley Street
South Hackensack,
New Jersey 07606

William T. Brannan            1,048,846(4)        12.0%
80 Wesley Street
South Hackensack,
New Jersey 07606

Matthew J. Morahan              433,858(5)         5.4%
80 Wesley Street
South Hackensack,
New Jersey 07606

Russell J. Reardon              925,622(6)        10.8%
80 Wesley Street
South Hackensack,
New Jersey 07606

Vincent T. Brana                590,551(7)         7.2%
80 Wesley Street
South Hackensack,
New Jersey 07606

(1) Includes 506,250 shares of Common Stock issuable upon exercise of Warrants
    pursuant to the January 1999 private placement and 5,905,512 shares
    convertible for Series A Preferred Stock or convertible notes issued in
    connection with the financial restructuring.

(2) Includes 672,814 shares of Common Stock issuable upon the exercise of
    options pursuant to the Employee Stock Compensation Program which are
    exercisable within 60 days of April 14, 2004 and 590,551 shares upon
    conversion of convertible notes issued in connection with the financial
    restructuring.

(3) Includes 286,794 shares of Common Stock issuable upon the exercise of
    options pursuant to the Employee Stock Compensation Program which are
    exercisable within 60 days of April 14, 2004 and 590,551 shares upon
    conversion of convertible notes issued in connection with the financial
    restructuring.

(4) Includes 344,499 shares of Common Stock issuable upon the exercise of
    options pursuant to the Employee Stock Compensation Program which are
    exercisable within 60 days of April 14, 2004 and 590,551 shares upon
    conversion of convertible notes issued in connection with the financial
    restructuring.

(5) Includes 20,000 shares of Common Stock issuable upon the exercise of options
    pursuant to the Employee Stock Compensation Program which are exercisable
    within 60 days of April 14, 2004 and 196,850 shares upon conversion of
    convertible notes issued in connection with the financial restructuring.

(6) Includes 260,833 shares of Common Stock issuable upon the exercise of
    options pursuant to the Employee Stock Compensation Program which are
    exercisable within 60 days of April 14, 2004 and 590,551 shares upon
    conversion of convertible notes issued in connection with the financial
    restructuring.

(7) Includes 590,551 shares upon conversion of convertible notes issued in
    connection with the financial restructuring.

         The following table sets forth information as of April 14, 2004 with
respect to beneficial ownership of the Common Stock by (i) each director, (ii)
each executive named in the Summary Compensation Table (the "Named Executives")
and (iii) all executive officers and directors as a group. Unless otherwise
indicated, the address of each such person is c/o CD&L, Inc., 80 Wesley Street,
South Hackensack, New Jersey 07606. All persons listed have sole voting and
investment power with respect to their shares unless otherwise indicated.


                        Amount of Beneficial Ownership(1)
                        ---------------------------------
<TABLE>
<CAPTION>
                                                                      Shares
                                                                     Issuable
                                                     Shares            Upon
                                                    Issuable         Conversion
                                                  Upon Exercise      of Stock in
                                                   of Stock         the Financial         Total           Percentage
Name                                Shares        of Options(1)     Restructuring         Shares            Owned
----                                ------        -------------     -------------         ------            -----
<S>                                 <C>               <C>               <C>              <C>                <C>
Albert W. Van Ness, Jr.             136,160           672,814           590,551          1,399,525          15.5%
William T. Brannan                  113,796           344,499           590,551          1,048,846          12.0%
Michael Brooks                      251,955           286,794           590,551          1,129,300          12.9%
Thomas E. Durkin III                     --            20,000                --             20,000             *
Jon F. Hanson                        64,000(2)         28,750                --             92,750           1.2%
Marilu Marshall                          --            28,750                --             28,750             *
Matthew J. Morahan                  222,008            15,000           196,850            433,858           5.4%
John A. Simourian                        --            20,000                --             20,000             *
John S. Wehrle                           --            27,500                --             27,500             *
Russell J. Reardon                   74,238           260,833           590,551            925,622          10.8%
Mark T. Carlesimo                        --           119,583            98,425            218,008           2.8%

All executive officers and
directors as a group (11
persons)                            862,157         1,824,523         2,657,479          5,344,159          61.7%
</TABLE>
------------
* Less than 1%


Note: The sum of individual beneficial ownership percentages can exceed 100% due
to the nature of the calculation which assumes total outstanding shares and the
exercise of all convertible instruments for any individual shareholder without
regard to exercise of similar instruments by any other shareholder.

(1) Includes options granted pursuant to the Employee Stock Compensation Program
    and the Director Plan, which are exercisable within 60 days of April 14,
    2004.

(2) Represents 64,000 shares held by Ledgewood Employees Retirement Plan of
    which Mr. Hanson is a beneficiary.



                                       65


<PAGE>

Item 13.  Certain Relationships and Related Transactions

           Mr. Brooks and members of his immediate family own various real
estate partnerships which lease properties to Silver Star, a subsidiary of the
Company for use as terminals in Valdosta, Georgia and Dayton, Ohio. In 2003,
Silver Star paid approximately $46,000 in rent for these properties. As of
January 1, 2004, the Company is obligated to pay rentals of approximately
$18,000 for the Valdosta, Georgia property, which the Company believes to be the
fair market rental value of the property. The Dayton, Ohio lease expired in July
2003.

           Mr. Simourian, a member of the Company's board of directors, is the
Chief Executive Officer of Lily Transportation Corp. ("Lily"), a privately held
truck leasing and dedicated logistics company. In 2003, Click Messenger
Services, a subsidiary of the Company, paid approximately $240,000 to Lily for
vehicle rentals.


Item 14.  Principal Accountant Fees and Services

The Company has been billed the following fees for services rendered by its
principal accountant during 2003 and 2002 (in thousands):



                                                      2003            2002
                                                   -----------    -------------
               Audit Fees                             $227            $219
               Audit-Related Fees                       38              15
               Tax Fees                                124             132
               All Other Fees                            4               -
                                                   -----------    -------------

               Total                                  $393            $366
                                                   ===========    =============

         Audit-related fees consist of professional services rendered in
conjunction with the Company's various responses to an SEC comment letter. Tax
fees primarily relate to the preparation of Federal and state tax returns and
tax advice associated with those filings. All other fees include administrative
and out-of-pocket expenses incurred by the principal accountant.

         The principal accountant is engaged each year by the Company's audit
committee and as such, all fees are pre-approved by the audit committee at the
beginning of each year.

                                       66
<PAGE>

                                     PART IV

Item 15.  Exhibits, Financial Statement Schedules and Reports on Form 8-K


(a)(1)   Financial Statements

         See Item 8. Financial Statements and Supplementary Data.

(a)(2)   Financial Statement Schedules

                     INDEX TO FINANCIAL STATEMENT SCHEDULES

                                                                            Page
                                                                            ----
CD&L, INC. AND SUBSIDIARIES:
       Schedule II - Valuation and Qualifying Accounts -
           For the years ended December 31, 2003, 2002 and 2001..............S-1

         All other schedules called for by Regulation S-X are not submitted
because they are not applicable or not required or because the required
information is not material or is included in the financial statements or notes
thereto.

(a)(3)  Exhibits

         The Exhibits listed in (b) below are filed herewith.

(b) Reports on Form 8-K

         The following current reports on Form 8-K were filed during the fourth
quarter of 2003.

o        Report on Form 8-K filed on November 18, 2003 concerning the November
         17, 2003 press release announcing third quarter earnings for the 2003
         fiscal year.

(c) Exhibits

<TABLE>
<CAPTION>
       Exhibit
        Number                                             Description
        ------                                             -----------
<S>              <C>

         3.1      Second Restated Certificate of Incorporation of CD&L, Inc. (filed as Exhibit 3.1 to the Company's Registration
                  Statement on Form S-1 (File No. 33-97008) and incorporated herein by reference).

         3.2      Certificate of Amendment of Second Amended and Restated Certificate of Incorporation of CD&L, Inc. (filed as
                  Exhibit 3ci) to the Company's Form 10-Q for the quarter ended June 30, 2000 and incorporated herein by reference).

         3.3      Amended and Restated By-laws of CD&L, Inc. amended through November 6, 1997 (filed as Exhibit 3.2 to the Company's
                  Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference).

         4.1      Form of certificate evidencing ownership of Common Stock of CD&L, Inc. (filed as Exhibit 4.1 to the Company's
                  Registration Statement on Form S-1 (File No. 33-97008) and incorporated herein by reference).

         4.2      Instruments defining the rights of holders of the Company's long-term debt (not filed pursuant to Regulation S-K
                  Item 601(b)(4)(iii); to be furnished to the Commission upon request).
</TABLE>

                                       67
<PAGE>
<TABLE>
<CAPTION>
<S>              <C>

         4.3      CD&L, Inc. Shareholder Protection Rights Agreement (filed as Exhibit 4.1 to the Company's Form 8-K dated December
                  27, 1999 and incorporated herein by reference).

         4.4      Amendment No. 1 to Shareholder Protection Rights Agreement dated April 14, 2004 by and between CD&L, Inc. and
                  American Stock Transfer & Trust Company.

         4.5      Certificate of Designations, Preferences and Rights of Series A Convertible Redeemable Preferred Stock of CD&L,
                  Inc.

         10.1     CD&L, Inc. Employee Stock Compensation Program (filed as Exhibit 10.1 to the Company's Registration Statement on
                  Form S-1 (File No. 33-97008) and incorporated herein by reference).

         10.2     CD&L, Inc. 1995 Stock Option Plan for Independent Directors as amended and restated through March 31, 1999 (filed
                  as Exhibit A to the Company's 1999 Proxy Statement and incorporated herein by reference).

         10.3     CD&L, Inc. Year 2000 Stock Incentive Plan (filed as Exhibit A to the Company's 2000 Proxy Statement and
                  incorporated herein by reference).

         10.4     CD&L, Inc. 2002 Stock Option Plan for Independent Directors (filed as Exhibit A to the Company's 2002 Proxy
                  Statement and incorporated herein by reference).

         10.5     Employee Stock Purchase Program (filed as Exhibit B to the Company's 2000 Proxy Statement and incorporated herein
                  by reference).

         10.6     Loan and Security Agreement, dated July 14, 1997 by and between First Union Commercial Corporation and CD&L, Inc.
                  and Subsidiaries (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter
                  ended June 30, 1997 and incorporated herein by reference) (hereinafter "First Union Credit Agreement").

         10.7     Amendment dated March 30, 2001 to First Union Credit Agreement (filed as Exhibit 10.5 to the Company's Annual
                  Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference).

         10.8     Amendment dated as of March 31, 2002 to First Union Credit Agreement (filed as Exhibit 10.6 to the Company's
                  Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference).

         10.9     Loan and Security Agreement dated June 27, 2002 by and among CD&L, Inc. (and subsidiaries) and Summit Business
                  Capital Corp., doing business as Fleet Capital - Business Finance Division (filed as Exhibit 10.1 to the Company's
                  Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 and incorporated herein by reference)
                  (hereinafter "Fleet Facility").

         10.10    Amendment dated April 23, 2003 to Fleet Facility (filed as Exhibit 10.10 to the Company's Annual Report on Form
                  10-K for the year ended December 31, 2002 and incorporated herein by reference).

         10.11    Senior Subordinated Loan Agreement dated as of January 29, 1999 with Paribas Capital Funding, LLC, Exeter Venture
                  Lenders, L.P. and Exeter Capital Partners IV, L.P. (filed as Exhibit 99.3 to the Company's Current Report on Form
                  8-K/A filed on June 23, 1999 and incorporated herein by reference) (hereinafter "Paribas Agreement").

         10.12    Warrant Agreement dated as of January 29, 1999 with Paribas Capital Funding, LLC, Exeter Venture Lenders, L.P. and
                  Exeter Capital Partners IV, L.P. (filed as Exhibit 99.4 to the Company's Current Report on Form 8-K/A filed on
                  July 23, 1999 and incorporated herein by reference)
</TABLE>

                                       68
<PAGE>
<TABLE>
<CAPTION>
<S>              <C>

         10.13    Amendment dated March 30, 2001 to Paribas Agreement (filed as Exhibit 10.8 to the Company's Annual Report on Form
                  10-K for the year ended December 31, 2000 and incorporated herein by reference).

         10.14    Amendment dated April 12, 2002 to Paribas Agreement (filed as Exhibit 10.10 to the Company's Annual Report on Form
                  10-K for the year ended December 31, 2001 and incorporated herein by reference).

         10.15    Amendment dated June 28, 2002 to Paribas Agreement (filed as Exhibit 10.2 to the Company's Quarterly Report on
                  Form 10-Q for the fiscal quarter ended June 30, 2002 and incorporated herein by reference).

         10.16    Amendment dated April 23, 2003 to Paribas Agreement (filed as Exhibit 10.16 to the Company's Annual Report on Form
                  10-K for the year ended December 31, 2002 and incorporated herein by reference).

         10.17    Form of Employment Agreement, dated as of May 1, 2000, with William T. Brannan (Employment agreements of Michael
                  Brooks, Russell J. Reardon and Mark T. Carlesimo are in the same form) (filed as Exhibit 10.9 to the Company's
                  Annual Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference).

         10.18    Amendment to Albert W. Van Ness, Jr. Employment Agreement dated March 15, 2001 (filed as Exhibit 10.18 to the
                  Company's Annual Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference).

         10.19    Amendment Number 2 dated June 6, 2001 to the Employment Agreement dated June 5, 2000 by and between the Company
                  and Albert W. Van Ness, Jr. (filed as Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the quarter
                  ended June 30, 2001 and incorporated herein by reference).

         10.20    Asset Purchase Agreement by and among Sureway Worldwide, LLC, Global Delivery Systems, LLC, Sureway Air Traffic
                  Corporation and CD&L, Inc. (hereinafter "Sureway Agreement") (filed as Exhibit 10.16 to the Company's Annual
                  Report on Form 10-K for the year ended December 31, 2000 and incorporated herein by reference).

         10.21    $2,500,000 Subordinated Note in favor of CD&L, Inc. issued pursuant to Sureway Agreement by the purchaser, Sureway
                  Worldwide, LLC (filed as Exhibit 10.16 to the Company's Annual Report on Form 10-K for the year ended December 31,
                  2000 and incorporated herein by reference).

         10.22    Stock Purchase Agreement dated June 14, 2001 by and among Executive Express, Inc., Charles Walch, National Express
                  Company, Inc. and CD&L, Inc. (hereinafter "National Express Agreement") (filed as Exhibit 10.1 to the Company's
                  Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 and incorporated herein by reference).

         10.23    Promissory Note in the sum of $1,650,000 of Executive Express, Inc. due June 14, 2006 (filed as Exhibit 10.2 to
                  the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001 and incorporated herein by
                  reference).

         10.24    Asset Purchase Agreement dated February 27, 2004 by and among Executive Express, Inc., Charles Walch, Silver Star
                  Express, Inc. and CD&L, Inc. (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on March 1,
                  2004 and incorporated herein by reference.)
</TABLE>

                                       69
<PAGE>
<TABLE>
<CAPTION>
<S>              <C>

         10.25    Restructuring and Exchange Agreement dated April 14, 2004 by and among CD&L, Inc., BNP Paribas SA, Exeter Venture
                  Lenders, L.P., Exeter Capital Partners IV, L.P., Albert W. VanNess, Jr., William T. Brannan, Michael Brooks,
                  Russell J. Reardon, Mark Carlesimo and Matthew Morahan and others (hereinafter "Paribas Restructuring and Exchange
                  Agreement").

         10.26    Amended and Restated $8,000,000 Senior Subordinated Loan Agreement by and among CD&L, Inc. and Various Lenders
                  dated as of January 29, 1999 amended and restated as of April 14, 2004.

         10.27    Form of Amended and Restated Note dated April 14, 2004 by and between CD&L, Inc. and various lenders.

         10.28    Form of Registration Rights Agreement dated April 14, 2004 by and between CD&L, Inc. and various investors and
                  lenders.

         10.29    Form of Stockholders Agreement dated April 14, 2004 by and between CD&L, Inc. and various investors and lenders.

         10.30    Form of Amended Employment Agreement dated April 14, 2004 with William T. Brannan (Employment agreements of
                  Michael Brooks, Russell J. Reardon and Mark T. Carlesimo are in the same form).

         11.1     Statement Regarding Computation of Net Income (Loss) Per Share.

         14.1     Code of Ethics for Senior Financial Officers

         21.1     List of Subsidiaries of CD&L, Inc.

         23.1     Independent Auditors' Consent

         23.2     Notice of Inability to Obtain Consent From Arthur Andersen LLP

         24.1     Power of Attorney

         31.1     Certification of Albert W. Van Ness, Jr. Pursuant to Exchange Act Rules 13a-14a and 15d-14a, as Adopted Pursuant
                  to Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2     Certification of Russell J. Reardon Pursuant to Exchange Act Rules 13a-14a and 15d-14a, as Adopted Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1     Certification of Albert W. Van Ness, Jr. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

         32.2     Certification of Russell J. Reardon Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.
</TABLE>

                                       70
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this annual report on Form
10-K for the year ended December 31, 2003 to be signed on its behalf by the
undersigned, thereunto duly authorized, on April 14, 2004.

                                            CD&L, Inc.


                                            By: /s/Russell J. Reardon
                                                ---------------------
                                                Russell J. Reardon
                                                Chief Financial Officer

         Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on April 14, 2004.

<TABLE>
<CAPTION>
                        Signature                                                     Capacity
                        ---------                                                     --------
<S>                                                         <C>
               /s/ Albert W. Van Ness, Jr.                  Chairman of the Board, Chief Executive Officer (Principal
               ---------------------------                  Executive Officer) and Director
                 Albert W. Van Ness, Jr.

                 /s/ William T. Brannan *                   President, Chief Operating Officer and Director
                 ------------------------
                    William T. Brannan

                 /s/ Russell J. Reardon *                   Vice President, Chief Financial Officer (Principal Financial
                 ------------------------                   and Accounting Officer)
                    Russell J. Reardon

                   /s/ Michael Brooks *                     Group Operations President and Director
                   --------------------
                      Michael Brooks

               /s/ Thomas E. Durkin, III *                  Director
               ---------------------------
                  Thomas E. Durkin, III

                   /s/ Jon F. Hanson *                      Director
                   -------------------
                      Jon F. Hanson

                  /s/ Marilu Marshall *                     Director
                  ---------------------
                     Marilu Marshall

                  /s/ Matthew Morahan *                     Director
                  ---------------------
                     Matthew Morahan

                   /s/ John Simourian *                     Director
                   --------------------
                      John Simourian

                   /s/ John S. Wehrle *                     Director
                   --------------------
                      John S. Wehrle



*By:    /s/ Albert W. Van Ness, Jr.
        ---------------------------
           Albert W. Van Ness, Jr.
           Attorney-in-Fact
</TABLE>

                                       71
<PAGE>

                                                                     Schedule II

                           CD&L, INC. AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (in thousands)


<TABLE>
<CAPTION>
                                         Balance            Charged
                                            at             to Costs          Write-offs                              Balance
                                        Beginning             And             (Net of                               at End of
          Description                   of Period          Expenses          Recoveries)         Other (a)           Period
----------------------------------  -----------------    --------------    ----------------    --------------    --------------
<S>                                 <C>                  <C>               <C>                 <C>               <C>
For the year ended
   December 31, 2003 -
   Allowance for doubtful
   accounts                               $492               $629              ($249)                -               $872
                                     ================    ==============    ================    ==============    ==============
   Allowance for doubtful
   note receivable                       $2,800                -              ($2,800)               -                $ -
                                     ================    ==============    ================    ==============    ==============

For the year ended
   December 31, 2002 -
   Allowance for doubtful
   accounts                               $951              ($165)             ($294)                -               $492
                                     ================    ==============    ================    ==============    ==============
   Allowance for doubtful
   note receivable                       $2,500              $300                 -                  -             $2,800
                                     ================    ==============    ================    ==============    ==============

For the year ended
   December 31, 2001 -
   Allowance for doubtful
   accounts                              $1,840              ($69)             ($720)             ($100)             $951
                                     ================    ==============    ================    ==============    ==============
   Allowance for doubtful
   note receivable                       $2,500                      -            -                  -             $2,500
                                     ================    ==============    ================    ==============    ==============
</TABLE>

(a) Represents allowance for doubtful accounts of company disposed of.

                                       72
<PAGE>

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
       Exhibits
<S>               <C>

         4.4      Amendment No. 1 to Shareholder Protection Rights Agreement dated April 14, 2004 by and between CD&L, Inc. and
                  American Stock Transfer & Trust Company.

         4.5      Certificate of Designations, Preferences and Rights of Series A Convertible Redeemable Preferred Stock of CD&L,
                  Inc.

         10.25    Restructuring and Exchange Agreement dated April 14, 2004 by and among CD&L, Inc., BNP Paribas SA, Exeter Venture
                  Lenders, L.P., Exeter Capital Partners IV, L.P., Albert W. VanNess, Jr., William T. Brannan, Michael Brooks,
                  Russell J. Reardon, Mark Carlesimo and Matthew Morahan and others (hereinafter "Paribas Restructuring and Exchange
                  Agreement").

         10.26    Amended and Restated $8,000,000 Senior Subordinated Loan Agreement by and among CD&L, Inc. and Various Lenders
                  dated as of January 29, 1999 amended and restated as of April 14, 2004.

         10.27    Form of Amended and Restated Note dated April 14, 2004 by and between CD&L, Inc. and various lenders.

         10.28    Form of Registration Rights Agreement dated April 14, 2004 by and between CD&L, Inc. and various investors and
                  lenders.

         10.29    Form of Stockholders Agreement dated April 14, 2004 by and between CD&L, Inc. and various investors and lenders.

         10.30    Form of Amended Employment Agreement dated April 14, 2004 with William T. Brannan (Employment agreements of
                  Michael Brooks, Russell J. Reardon and Mark T. Carlesimo are in the same form).

         11.1     Statement Regarding Computation of Net Income (Loss) Per Share

         14.1     Code of Ethics for Senior Financial Officers

         21.1     List of Subsidiaries of CD&L, Inc.

         23.1     Independent Auditors' Consent

         23.2     Notice of Inability to Obtain Consent From Arthur Andersen LLP

         24.1     Power of Attorney

         31.1     Certification of Albert W. Van Ness, Jr. Pursuant to Exchange Act Rules 13a-14a and 15d-14a, as Adopted Pursuant
                  to Section 302 of the Sarbanes-Oxley Act of 2002.

         31.2     Certification of Russell J. Reardon Pursuant to Exchange Act Rules 13a-14a and 15d-14a, as Adopted Pursuant to
                  Section 302 of the Sarbanes-Oxley Act of 2002.

         32.1     Certification of Albert W. Van Ness, Jr. Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
                  the Sarbanes-Oxley Act of 2002.

         32.2     Certification of Russell J. Reardon Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
                  Sarbanes-Oxley Act of 2002.
</TABLE>

                                       73


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.4
<SEQUENCE>3
<FILENAME>b331333_ex4-4.txt
<DESCRIPTION>STOCKHOLDER PROTECTION RIGHTS AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit 4.4

                                 AMENDMENT NO. 1

                                       TO

                     STOCKHOLDER PROTECTION RIGHTS AGREEMENT


         This Amendment No. 1 (this "Amendment") is dated as of April 14, 2004,
between CD&L, Inc., a Delaware corporation formerly known as Consolidated
Delivery & Logistics, Inc. (the "Company"), and American Stock Transfer & Trust
Company (the "Rights Agent");

                               W I T N E S S E T H

         WHEREAS, the Company and the Rights Agent entered into a Stockholder
Protection Rights Agreement, dated as of December 27, 1999 (the "Rights
Agreement"); and

         WHEREAS, Section 5.4 of the Rights Agreement provides that, prior to
the Flip-in Date, the Company and the Rights Agent may amend the Rights
Agreement in any respect without the approval of any holders of Rights; and

         WHEREAS, the Company is about to (i) enter into a Restructuring and
Exchange Agreement (the "Restructuring Agreement") with Paribas Capital Funding
LLC, Exeter Venture Lenders L.P. and Exeter Capital Partners IV, L.P.
(collectively, the "Lenders") and Albert Van Ness, Jr., William T. Brannan,
Michael Brooks, Russell Reardon, Matthew Morahan, Mark T. Carlesimo and certain
other individuals (collectively, the "Investors"), as well as the other
Transaction Documents (as defined in the Restructuring Agreement"), and (ii)
commence an offering of non-transferable subscription rights (the "Subscription
Rights") to purchase up to $4.0 million of the Company's common stock, par value
$.001 per share (the "Common Stock"), to the holders of the outstanding shares
of Common Stock pursuant to a registration statement on Form S-3 to be filed
with the Securities and Exchange Commission (the "Rights Offering"), and the
Company wishes to ensure that the Rights provided for in the Rights Agreement do
not become exercisable on account of the Company entering into the Transaction
Documents or commencing the Rights Offering or as a result of the consummation
of any of the transactions contemplated under the Transaction Documents or the
exercise of Subscription Rights by any of the Lenders and Investors; and

         WHEREAS, the Board of Directors of the Company has approved this
Amendment;

         NOW THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein set forth, the parties hereby agree as follows:

         1. The definition of "Acquiring Person" in Section 1.1 of the Rights
Agreement is hereby amended by adding the following to the end of such
definition:


<PAGE>

         "Notwithstanding anything else in this definition to the contrary, none
         of Paribas Capital Funding LLC, Exeter Venture Lenders L.P. and Exeter
         Capital Partners IV, L.P. (collectively, the "Lenders") and Albert Van
         Ness, Jr., William T. Brannan, Michael Brooks, Russell Reardon, Matthew
         Morahan, Mark T. Carlesimo, Vincent P. Brana, Martin C. Galinsky, Peter
         Young, Jack McCorkell, Curtis G. Hight, J. Daniel Ayer, Dominick Simone
         and Ralph M. Bahna (collectively, the "Investors"), nor any affiliate
         of any of the Lenders or the Investors, shall be deemed to be an
         Acquiring Person within the meaning of this Agreement (i) on account of
         the Company and any of the Lenders or Investors, or any affiliate of
         any of the Lenders or Investors, entering into any of the Transaction
         Documents or exercising any Subscription Rights, (ii) as a result of
         the consummation of any of the transactions contemplated under the
         Transaction Documents or the conversion, exercise or exchange of any of
         the Company's securities (A) held by any Lender or Investor as of April
         14, 2004 or (B) issued to the Lenders or Investors pursuant to the
         Transaction Documents and, in the case of any such conversion, exercise
         or exchange, in accordance with the terms of such securities, or (iii)
         as a result of any additional acquisition of the Company's securities
         by any of the Lenders or Investors provided that no such additional
         acquisition by any of the Lenders or Investors shall result in such
         Lender or Investor being the Beneficial Owner of 30% or more of the
         outstanding shares of Common Stock. Consequently, neither a Stock
         Acquisition Date nor a Flip-in Date, as defined in this Agreement,
         shall occur upon (i) the execution of any of the Transaction Documents
         by the parties thereto, (ii) the commencement of the Rights Offering,
         (iii) the exercise of Subscription Rights by any of the Lenders or
         Investors, (iv) the consummation of any of the transactions
         contemplated under the Transaction Documents (including any conversion,
         exercise or exchange by any of the Lenders or Investors of any of the
         securities issued to such Lender or Investor pursuant to the
         Transaction Documents, which conversion, exercise or exchange is in
         accordance with the terms of such security), (v) any conversion,
         exercise or exchange by any of the Lenders or Investors of any
         securities of the Company held by such Lender or Investor as of April
         14, 2004, in accordance with the terms of such security, or (vi) any
         additional acquisition of the Company's securities by any of the
         Lenders or Investors provided that no such additional acquisition by
         any of the Lenders or Investors shall result in such Lender or Investor
         being the Beneficial Owner of 30% or more of the outstanding shares of
         Common Stock. In addition, neither (i) the Company's execution of the
         Transaction Documents, (ii) the Company's commencement of the Rights
         Offering, (iii) the exercise of the Subscription Rights by any of the
         Lenders or Investors, (iv) the consummation of any of the transactions
         contemplated under the Transaction Documents (including any conversion,
         exercise or exchange by any of the Lenders or Investors of any of the


                                      -2-
<PAGE>

         securities issued to such Lender or Investor pursuant to the
         Transaction Documents, which conversion, exercise or exchange is in
         accordance with the terms of such security), (v) any conversion,
         exercise or exchange by any of the Lenders or Investors of any
         securities of the Company held by such Lender or Investor as of April
         14, 2004, in accordance with the terms of such security, nor (vi) the
         acquisition of any additional securities of the Company by any of the
         Lenders or Investors (provided that no such acquisition of additional
         securities by any of the Lenders or Investors shall result in such
         Lender or Investor being the Beneficial Owner of 30% or more of the
         outstanding shares of Common Stock) shall constitute a Flip-over
         Transaction or Event."

         2. By executing this Amendment, the Company hereby certifies to the
Rights Agent that the proposed amendment to the Rights Agreement contained in
this Amendment has been made in accordance with Section 5.4 of the Rights
Agreement.

         3. Capitalized terms used in this Amendment and not otherwise defined
herein shall have the meanings ascribed to them in the Rights Agreement.

         4. Except as amended or modified hereby, the Rights Agreement shall
remain in full force and effect in accordance with its original terms.

         5. This Amendment may be executed in one or more counterparts, each of
which shall constitute an original, and together, all such executed counterparts
shall be deemed one and the same instrument.


         (This space intentionally left blank; signature page follows.)


                                      -3-
<PAGE>



         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.

                                        CD&L, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------




                                        AMERICAN STOCK TRANSFER &
                                        TRUST COMPANY


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                      -4-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.5
<SEQUENCE>4
<FILENAME>b331333_ex4-5.txt
<DESCRIPTION>CERTIFICATE OF DESIGNATIONS, PREFERENCES & RIGHTS
<TEXT>
<PAGE>

                                                                     Exhibit 4.5



               CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
                                       OF
                 SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
                                       OF
                                   CD&L, INC.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)


                  The undersigned, Mark Carlesimo, Vice President of CD&L, INC.,
a corporation organized and existing under the laws of the State of Delaware
(the "Company"), does hereby certify that, pursuant to authority vested in the
Board of Directors of the Company (the "Board") by Article Fourth of the
Certificate of Incorporation of the Company (the "Certificate of
Incorporation"), the following resolution was adopted as of April 13, 2004 by
the Board of Directors of the Company pursuant to Section 151 of the Delaware
General Corporation Law:

                  "RESOLVED that, pursuant to authority vested in the Board of
Directors of the Company by Article Fourth of the Certificate of Incorporation
of the Company, out of the total authorized number of 2,000,000 shares of
Company preferred stock, par value $.001 per share ("Preferred Stock"), there
shall be designated a series of 392,157 shares which shall be issued in and
constitute a single series to be known as "Series A Convertible Redeemable
Preferred Stock" (hereinafter called the "Series A Preferred Stock"). The shares
of Series A Preferred Stock shall have the voting powers, designations,
preferences and other rights, and the qualifications, limitations and
restrictions thereof (in addition to the voting powers, designations,
preferences and other rights, and the qualifications, limitations and
restrictions set forth in the Certificate of Incorporation which are applicable
to Preferred Stock generally) set forth below:

                  Section 1.        Designation and Amount; Ranking.

                  (a) This series of Preferred Stock shall be designated as the
"Series A Convertible Redeemable Preferred Stock" of the Company, and the
authorized number of shares constituting such series shall be 392,157, par value
$.001 per share. The price and the liquidation preference of shares of Series A
Preferred Stock shall be the Liquidation Preference.

                  (b) The shares of Series A Preferred Stock shall rank senior
to shares of Junior Securities of the Company as to the payment of dividends and
the distribution of assets upon the liquidation, dissolution or winding up of
the Company.

                  Section 2.        Dividends.

                  Dividends on the Series A Preferred Stock shall be declared
and paid from time to time as determined by the Company's Board out of funds
legally available therefor. The Company shall not declare, pay or set aside any
dividends or distributions (other than dividends payable solely in shares of
Common Stock) ("Dividends" or "Dividend", as applicable) on shares of Junior
Securities, unless the holders of Series A Preferred Stock first receive, or
simultaneously receive, a Dividend on each outstanding share of Series A
Preferred Stock equal to the product of (i) the per share Dividend to be
declared, paid or set aside for the Junior Securities, multiplied by (ii) the
number of shares of Common Stock into which such share of Series A Preferred
Stock is convertible immediately prior to the record date set by the Company
with respect to such Dividends. All Dividends paid with respect to shares of
Series A Preferred Stock shall be paid pro rata to the holders entitled thereto.


<PAGE>

                  Section 3.        Change in Control.

                  (a)      In the event of a Change in Control of the Company,
the holders of shares of the Series A Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Company available for distribution
to its stockholders (after payment or provision for payment of all debts and
liabilities of the Company), before any payment shall be made to the holders of
Junior Securities by reason of their ownership thereof, for each share of Series
A Preferred Stock, an amount equal to the Issue Price plus any and all accrued
but unpaid dividends upon the Series A Preferred Stock, if any (subject to
equitable adjustment in the event of any stock dividend, stock split,
combination, reorganization, recapitalization, reclassification, or other
similar event affecting the shares of Series A Preferred Stock) pursuant to
Section 4(b)) (the "Liquidation Preference").

                  (b)      If, upon such Change in Control of the Company, the
assets to be distributed are insufficient to permit the payment in full to the
holders of the Series A Preferred Stock of all amounts distributable to them
under Section 3(a) hereof, then the entire assets of the Company available for
such distribution shall be distributed ratably among the holders of the Series A
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive under Section 3(a).

                  (c)      After payment has been made in full pursuant to
Section 3(a) above, the remaining assets available for distribution (after
payment or provision for payment of all debts and liabilities of the Company)
shall be distributed among the holders of the Junior Securities according to
their respective rights and preferences.

                  (d)      Distributions Other than Cash. Whenever the
distribution provided for in this Section 3 shall be payable in property other
than cash, the value of such distribution shall be the fair market value as
follows:

                  (i)      if such property is traded on a securities exchange
                           or through the Nasdaq National Market and if no
                           restrictions exist with respect to the
                           transferability thereof, the value shall be deemed to
                           be the average of the closing prices of the
                           securities on such exchange or system over the thirty
                           (30) calendar day period ending three (3) calendar
                           days prior to, but not including, the effective date
                           of the Change in Control;

                  (ii)     if such property is actively (as determined in good
                           faith by the Board) traded over-the-counter but not
                           on the Nasdaq National Market and if no restrictions
                           exist with respect to the transferability thereof,
                           the value shall be deemed to be the average of the
                           closing bid or sale prices (whichever is applicable)
                           over the thirty (30) calendar day period ending three
                           (3) calendar days prior to, but not including, the
                           closing; and


                                      -2-
<PAGE>

                  (iii)    if Subsections 3(e)(i) and 3(e)(ii) do not apply, the
                           value shall be the fair market value thereof, as
                           determined in good faith by the Board.

                  (e)      The Company shall give each holder of Series A
                           Preferred Stock written notice of any Change in
                           Control not later than ten (10) days prior to any
                           meeting of stockholders to approve such Change in
                           Control or, if no meeting is to be held, not later
                           than twenty (20) calendar days prior to the date of
                           such Change in Control.

                  Section 4.        Conversion. The holders of Series A
Preferred Stock shall have conversion rights as follows (the "Conversion
Rights"):

                  (a) Right to Convert; Conversion Price. Each share of Series A
Preferred Stock shall be convertible, without the payment of any additional
consideration by the holder thereof and at the option of the holder thereof, at
any time and from time to time after the date of issuance of such share, at the
office of the Company or any transfer agent for the Series A Preferred Stock,
into such number of fully paid and non-assessable shares of the Common Stock
(excluding fractional shares which shall be rounded to the nearest full share)
as is determined by dividing the Issue Price by the Series A Conversion Price in
effect at the time of conversion. The "Series A Conversion Price" for purposes
of calculating the number of shares of the Common Stock deliverable upon
conversion without the payment of any additional consideration by the holder of
Series A Preferred Stock shall initially be equal to $1.02. Such initial Series
A Conversion Price shall be subject to adjustment, in order to adjust the number
of shares of the Common Stock into which Series A Preferred Stock is
convertible, as hereinafter provided. In the event of a redemption of any shares
of Series A Preferred Stock pursuant to Section 8 hereof, the Conversion Rights
of the shares designated for redemption shall terminate at the close of business
on the first full day preceding the date fixed for redemption, unless the
redemption price is not paid on such redemption date, in which case the
Conversion Rights for such shares shall continue until such price is paid in
full. In the event of a Change in Control of the Company, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on a Change in Control
to the holders of Series A Preferred Stock, unless the Liquidation Preference is
not paid upon such date, in which case the Conversion Rights for such shares
shall continue until such Liquidation Preference is paid in full. At the time of
conversion and upon receipt of the stock certificates surrendered for
conversion, the Company shall pay in cash to the holder thereof an amount equal
to all accrued but unpaid dividends upon the Series A Preferred Stock, if any,
to the date of conversion, without interest.

                  (b) Mechanics of Conversion. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into shares of the Common
Stock, such holder shall surrender the certificate or certificates therefor,
duly endorsed or with stock powers attached, at the office of the Company or of
any transfer agent for the Series A Preferred Stock, and shall give written
notice to the Company at such office that such holder elects to convert the same
and shall state therein the name of such holder or the name or names of the
nominees of such holder in which such holder wishes the certificate or
certificates for whole shares of the Common Stock to be issued and the date of
such


                                      -3-
<PAGE>


conversion (the "Conversion Date") which shall be a Business Day. The Company
shall, within ten (10) Business Days, issue and deliver at such office to such
holder of Series A Preferred Stock, or to such holder's nominee or nominees, a
certificate or certificates for the number of whole shares of the Common Stock
to which such holder shall be entitled. Such conversion shall be deemed to have
been made immediately prior to the close of business on the Conversion Date, and
the Person or Persons entitled to receive the whole shares of Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such whole number of shares of Common Stock on such date. In case
the number of shares of Series A Preferred Stock represented by the certificate
or certificates surrendered pursuant to subparagraph 4(b) exceeds the number of
shares converted, the Company shall upon such conversion, execute and deliver to
the holder thereof at the expense of the Company, a new certificate for the
number of shares of Series A Preferred Stock represented by the certificate or
certificates surrendered which are not to be converted. Such conversion shall be
deemed to have been made immediately prior to the close of business on the
Conversion Date and the Person or Persons entitled to receive the shares of
Common Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date. The
Company shall pay any and all issue and transfer taxes that may be payable in
respect of the issuance and delivery of whole shares of the Common Stock upon
conversion of the Series A Preferred Stock.

                  (c) Termination of Rights upon Conversion. All shares of
Series A Preferred Stock converted as herein provided shall no longer be deemed
to be outstanding and all rights with respect to such shares, including the
rights, if any, to receive notices and to vote and to further accrue dividends
shall immediately cease and terminate upon such conversion (except only the
right of the holders thereof to receive shares of the Common Stock in exchange
therefor pursuant to the terms hereof).

                  (d) Adjustments to Conversion Price for Dilutive Issuances.
The Series A Conversion Price shall be subject to adjustment as follows:

                           (i)      In case the Company shall at any time
                                    subdivide (by any stock split, stock
                                    dividend or otherwise) its outstanding
                                    shares of Common Stock into a greater number
                                    of shares, the Series A Conversion Price in
                                    effect immediately prior to such subdivision
                                    shall be proportionately reduced, and,
                                    conversely, in case the outstanding shares
                                    of Common Stock shall be combined into a
                                    smaller number of shares, the Series A
                                    Conversion Price in effect immediately prior
                                    to such combination shall be proportionately
                                    increased. In the case of any such
                                    subdivision, no further adjustment shall be
                                    made pursuant to subparagraph (ii) below by
                                    reason thereof.

                           (ii)     In case the Company distributes to holders
                                    of Junior Securities shares of capital
                                    stock, then lawful and adequate provision
                                    shall be made so that each holder of a share
                                    of Series A Preferred Stock shall
                                    thereafter, upon conversion, have the right
                                    to receive an equal amount of capital stock
                                    as if the Series A Preferred Stock had been
                                    converted at that time.


                                      -4-
<PAGE>



                  Section 5.        Voting Rights of Series A Preferred Stock.

                  (a) Except as otherwise required by law, as set forth in any
agreement between the Company and the holders of the Series A Preferred Stock,
or as provided in this Certificate of Designations, each holder of shares of
Series A Preferred Stock shall have no voting rights. So long as at least
196,079 shares of Series A Preferred Stock (a majority of the initially issued
shares of Series A Preferred Stock) are outstanding, except where the vote or
written consent of the holders of a greater number of shares of the Company is
required by applicable law or the Certificate of Incorporation and in addition
to any other vote that may be required by applicable law, without the prior
written approval of the holders of a majority of the then outstanding Series A
Preferred Stock, given in person or by proxy, either in writing or at a meeting
called for that purpose, the Company will not alter or modify any of the terms,
designations, powers, preferences, privileges or other rights of, or
restrictions provided for the benefit of holders of Series A Preferred Stock.

                  (b) So long as at least 196,079 shares of Series A Preferred
Stock (a majority of the initially issued shares of Series A Preferred Stock)
are outstanding, the holders of the Series A Preferred Stock, voting as a
separate class, shall have the right to elect two members of the Board (the
"Series A Directors"). The rights of the holders of the Series A Preferred Stock
to elect the Series A Directors shall terminate on the first date on which less
than 196,079 shares (a majority of the initially issued shares of Series A
Preferred Stock) of Series A Preferred Stock are outstanding (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or similar recapitalization affecting such shares). At any meeting
(or in a written consent in lieu thereof) held for the purpose of electing
directors, the presence in person or by proxy (or the written consent) of the
holders of at least a majority in interest of the then outstanding shares of
Series A Preferred Stock shall constitute a quorum of the Series A Preferred
Stock for the election of the Series A Directors; provided that such election
shall occur at a duly convened meeting of the stockholders or otherwise in
accordance with the by-laws of the Company. A vacancy in any directorship
elected by the holders of the Series A Preferred Stock shall be filled only by
vote or written consent of a majority in interest of the holders of the Series A
Preferred Stock. The term of office of the Series A Directors shall terminate on
the earlier to occur of (i) the date three (3) months subsequent to the
termination of such rights, or (ii) the annual meeting of stockholders of the
Company immediately following the termination of such rights.

                  (c) With respect to the voting rights of the holders of the
Series A Preferred Stock pursuant to this Section 5, each holder of Series A
Preferred Stock shall be entitled to one vote for each share of Series A
Preferred Stock with respect to each matter referred to above.

                  Section 6.        Notices of Record Date.  In the event:

                  (a) the Company shall take a record of the holders of its
Common Stock (or other stock or securities at the time issuable upon conversion
of the Series A Preferred Stock) for the purpose of entitling or enabling them
to receive any Dividend, or to receive any right to subscribe for or purchase
any shares of stock of any class or any other securities, or to receive any
other right;


                                      -5-
<PAGE>

                  (b) of any capital reorganization of the Company, any
reclassification of the Common Stock of the Company, any consolidation or merger
of the Company with or into another corporation (other than a consolidation or
merger in which the Company is the surviving entity and its Common Stock is not
converted into or exchanged for any other securities or property), or any
transfer of all or substantially all of the assets of the Company;

                  (c) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company; or

                  (d) of any other act or transaction requiring the approval of
holders of the Series A Preferred Stock pursuant to Section 5 above,

then, and in each such case, the Company will deliver or cause to be delivered
to the holders of the Series A Preferred Stock a notice specifying, as the case
may be, (i) the record date for such Dividend or right, and the amount and
character of such Dividend or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation, winding-up, act or transaction is to take place, and the time, if
any is to be fixed, as of which the holders of record of Common Stock (or such
other stock or securities at the time issuable upon the conversion of the Series
A Preferred Stock) shall be entitled to exchange their shares of Common Stock
(or such other stock or securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up or other action. Such notice shall be
mailed at least fifteen (15) days prior to the record date (in the case of the
events described in Subsection 6(a)) or effective date (in the case of the
events described in Subsections 6(b), 6(c) and 6(d)).

                  Section 7.        Common Stock Reserved. The Company shall
reserve and keep available out of its authorized but unissued Common Stock such
number of shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A Preferred Stock.

                  Section 8.        Redemption.  The shares of Series A
Preferred Stock shall be redeemable as follows:

                  (a) Subject to the Company's legal ability to effect a
redemption under the applicable law, at any time on or after the initial
issuance date, the Company may elect to redeem all or any portion of the
outstanding shares of Series A Preferred Stock by paying for each share the
Issue Price.

                  (b) Notice of the election to redeem shall be mailed, not less
than thirty (30) days prior to the specified redemption date, to each holder of
Series A Preferred Stock which is to be redeemed, at such holder's address as it
appears on the books of the Company. The notice shall specify the date of
redemption and the amount payable per share.

                  (c) The holders of shares of Series A Preferred Stock which
have been called for redemption shall not have any rights as stockholders on and
after the specified redemption date, regardless of whether they have surrendered
their share certificates and received payment, except the right to receive the
redemption price (as described in paragraph (a) above), without interest, upon
surrender of their share certificates, provided that on or before the specified
redemption date the Company has deposited the funds necessary for redemption
with a bank or trust company with irrevocable instructions and authority to pay
the redemption price to the stockholders upon surrender of the appropriate share
certificates.


                                      -6-
<PAGE>



                  Section 9.        Reacquired Shares. Any shares of Series A
Preferred Stock converted, redeemed, purchased, or otherwise acquired by the
Company in any manner whatsoever shall, automatically and without further
action, be retired and canceled promptly after the acquisition thereof, and
shall not be reissued as shares of Series A Preferred Stock. Such shares shall
be restored to the status of authorized but unissued shares of Preferred Stock
and the Company from time to time shall take such action as may be necessary to
reduce accordingly the number of authorized shares of Series A Preferred Stock.

                  Section 10.       No Impairment. The Company will not,
through any reorganization, transfer of assets, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company but will at all time in good faith assist in the
carrying out of all the provisions of this Certificate of Designations,
Preferences and Rights and in the taking of all such action as may be necessary
or appropriate in order to protect the conversion rights and liquidation
preferences granted hereunder of the holders of the Series A Preferred Stock
against impairment.

                  Section 11.       No Waiver. Except as otherwise modified or
provided for herein, the holders of Series A Preferred Stock shall also be
entitled to, and shall not be deemed to have waived, any other applicable rights
granted to such holders under the Delaware General Corporation Law.

                  Section 12.       Amendment; Waiver. Any term of the Series A
Preferred Stock may be amended or waived (including the adjustment provisions
included in Section 4(d) hereof) upon the written consent of the Company and the
holders of at least a majority of the Series A Preferred Stock then outstanding;
provided, however that the number of shares of Common Stock issuable upon
exercise of Conversion Rights hereunder and the Conversion Price may not be
amended, and the right to convert the Series A Preferred Stock may not be
altered or waived, without the written consent of the holders of all of the
Series A Preferred Stock then outstanding, except as provided in Section 4(d)
hereof.

                  Section 13.       Remedies Cumulative. No failure or delay on
the part of the holders of the Series A Preferred Stock in the exercise of any
power, right or privilege under this Certificate of Designation shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, 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 under this
Certificate of Designation are cumulative to and not exclusive of any rights or
remedies otherwise available.


                                      -7-
<PAGE>

                  Section 14.       Certain Definitions.

                  As used in this Certificate of Designations, Preferences and
Rights of Series A Convertible Redeemable Preferred Stock (this "Certificate of
Designations"), the following terms have the respective meanings set forth
below:

                  "Board" shall have the meaning set forth in the first
paragraph of this Certificate of Designation.

                  "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.

                  "Certificate of Incorporation" shall have the meaning set
forth in the first paragraph of this Certificate of Designation.

                  "Change in Control" shall be deemed to have occurred if any of
the following events occur:

                  (a) 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

                  (b) 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

                  (c) an approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or

                  (d) any action pursuant to which any person (as such term is
defined in Section 13(d) of the Securities Exchange Act of 1934), 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 Securities Exchange Act of 1934),
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 Company's Board of Directors shall
determine that such person so becoming such beneficial owner shall not
constitute a Change in Control; or



                                      -8-
<PAGE>



                  (e) the individuals (A) who, as of the date hereof (including
the nominees of the holders of the Company's Series A Convertible Redeemable
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.

                   "Common Stock" means the common stock, par value $.001 per
share of the Company, including the stock into which the Series A Preferred
Stock is convertible, and any capital stock of any class of the Company
hereafter authorized that shall not be entitled to a fixed sum in respect of the
rights of the holders thereof to participate in dividends or in the distribution
of assets upon the voluntary or involuntary liquidation, dissolution or winding
up of the Company.

                  "Company" shall have the meaning set forth in the first
paragraph of this Certificate of Designation.

                  "Dividends" shall have the meaning set forth in Section 2 of
this Certificate of Designation.

                  "Issue Price" means $10.20 per share.

                  "Junior Securities" means (i) the Common Stock and (ii) all
classes and series of stock of the Company now or hereafter authorized, issued
or outstanding which by their terms do not expressly provide that they are
senior to, or on parity with, the Series A Preferred Stock with respect to
dividends or liquidation.

                  "Person" or "Persons" means and includes natural persons,
corporations, limited partnerships, general partnerships, joint stock companies,
joint ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereto.

                  "Preferred Stock" shall have the meaning set forth in the
resolution set forth in the preamble of this Certificate of Designation."



                                      -9-
<PAGE>


                  IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Designations this 13th day of April, 2004.


                                             CD&L, INC.


                                             By:
                                                --------------------------------
                                                Name:   Mark Carlesimo
                                                Title:  Vice-President

                                      -10-


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.25
<SEQUENCE>5
<FILENAME>b331333_ex10-25.txt
<DESCRIPTION>RESTRUCTURING AND EXCHANGE AGREEMENT
<TEXT>
<PAGE>

                                                                   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;


                                       -1-
<PAGE>



                  (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


                                      -2-
<PAGE>



                                     (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.


                                       -3-
<PAGE>



                           (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;


                                       -4-
<PAGE>


                           (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;


                                       -5-
<PAGE>



                           (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.


                                       -6-
<PAGE>



                  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.


                                       -7-
<PAGE>



                  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.


                                       -8-
<PAGE>



                  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.


                                       -9-
<PAGE>



                  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.


                                      -10-
<PAGE>



                  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.


                                      -11-
<PAGE>



                  (e) Waivers. All key employees (meaning Albert W. Van Ness,
Jr., William, T. Brannan, Russell Reardon, Michael Brooks and Mark Carlesimo
(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. Ryan Beck & 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. Orloff Lowenbach Stifelman & Siegel
("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.


                                      -12-
<PAGE>



                  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., 80 Wesley Street, S. Hackensack, New Jersey 07606,
facsimile number (201) 489-6974, 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.


                                      -13-
<PAGE>



                  (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.


                                      -14-
<PAGE>



                  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}


                                      -15-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.26
<SEQUENCE>6
<FILENAME>b331333_ex10-26.txt
<DESCRIPTION>SENIOR SUBORDINATED LOAN AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.26


                                                                  Execution Copy


================================================================================


                              AMENDED AND RESTATED


                                   $8,000,000

                       SENIOR SUBORDINATED LOAN AGREEMENT

                                      among

                                   CD&L, INC.

                                       and

                                 VARIOUS LENDERS

                    -----------------------------------------


                          Dated as of January 29, 1999


                    amended and restated as of April 14, 2004


                    -----------------------------------------

================================================================================


<PAGE>



                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S>            <C>     <C>                                                                                     <C>

                                                                                                               Page

SECTION 1      Amount and Terms of Loans..........................................................................3

               1.01    The Loans..................................................................................3

SECTION 2.     Repayment; Prepayments; Payments; Taxes............................................................5

               2.01    Payment of Loans...........................................................................5
               2.02    Mandatory and Voluntary Prepayments........................................................5
               2.03    Method and Place of Payment................................................................6
               2.04    Net Payments...............................................................................6

SECTION 3.     Conditions Precedent to Exchange on the Closing Date...............................................7

               3.01    Notes......................................................................................8
               3.02    Corporate Documents; Proceedings...........................................................8
               3.03    Subordinated Guaranties....................................................................8
               3.04    Litigation.................................................................................8
               3.05    Approvals..................................................................................8
               3.06    Material Adverse Change, Etc...............................................................8
               3.07    No Default; Representations and Warranties.................................................9

SECTION 4.     Representations, Warranties and Agreements.........................................................9

               4.01    Status.....................................................................................9
               4.02    Power and Authority........................................................................9
               4.03    No Violation...............................................................................9
               4.04    Governmental Approvals....................................................................10
               4.05    Financial   Statements;    Financial   Condition;   Undisclosed   Liabilities;
                       Projections; Etc..........................................................................10
               4.06    Litigation................................................................................10
               4.07    Capitalization............................................................................10
               4.08    Use of Proceeds; Margin Regulations.......................................................10
               4.09    Subsidiaries..............................................................................11
               4.10    The Transaction...........................................................................11
               4.11    Investment Company Act....................................................................11
               4.12    Public Utility Holding Company Act........................................................11
               4.13    Valid Issuance of Borrower Common Stock...................................................11

SECTION 5.     Affirmative Covenants.............................................................................11

               5.01    Information Covenants.....................................................................11
               5.02    Books, Records and Inspections............................................................14
               5.03    Maintenance of Property, Insurance........................................................14

</TABLE>


                                       -i-
<PAGE>


<TABLE>
<CAPTION>
<S>            <C>     <C>                                                                                     <C>

                                                                                                               Page

               5.04    Corporate Franchises......................................................................14
               5.05    Compliance with Statutes, Etc.............................................................14
               5.06    Compliance with Environmental Laws........................................................14
               5.07    End of Fiscal Years; Fiscal Quarters......................................................15
               5.08    Payment of Taxes..........................................................................15
               5.09    Observation of Board of Directors.........................................................15
               5.10    Use of Proceeds, Margin Regulations.......................................................16
               5.11    Intellectual Property Rights..............................................................16

SECTION 6.     Negative Covenants................................................................................16

               6.01    Dividends.................................................................................16
               6.02    Consolidated EBITDA to Interest...........................................................16
               6.03    Limitation on Voluntary Payments and Modifications; Limitation on
                       Modifications of Certificate of Incorporation, By-Laws and Certain Other
                       Agreements; Etc...........................................................................17
               6.04    Limitation on Certain Restrictions on Subsidiaries........................................17

SECTION 7.     Events of Default.................................................................................17

               7.01    Payments..................................................................................17
               7.02    Covenants.................................................................................17
               7.03    Stockholders Agreement....................................................................18
               7.04    Default Under Other Agreements............................................................18
               7.05    Bankruptcy, Etc...........................................................................18
               7.06    Subordinated Guaranty.....................................................................18
               7.07    TTM EBITDA................................................................................18

SECTION 8.     Definitions and Accounting Terms..................................................................18

               8.01    Defined Terms.............................................................................19

SECTION 9.     Subordination.....................................................................................27

               9.01    Obligations Subordinate to Senior Indebtedness............................................27
               9.02    Payment Over of Proceeds Upon Dissolution.................................................28
               9.03    No Payment in Certain Circumstances.......................................................29
               9.04    Acceleration Rights; Remedies.............................................................30
               9.05    Payment Otherwise Permitted...............................................................30
               9.06    Subrogation to Rights of Holders of Senior Indebtedness...................................31
               9.07    Provisions Solely to Define Relative Rights...............................................31
               9.08    No Waiver of Subordination Provisions; Amendment..........................................31
               9.09    Reliance on Judicial Order or Certificate of Liquidating Agent............................32
               9.10    Turnover; Miscellaneous Subordination Provisions..........................................32

</TABLE>

                                      -ii-
<PAGE>

<TABLE>
<CAPTION>
<S>            <C>     <C>                                                                                     <C>

                                                                                                               Page

SECTION 10.    Miscellaneous.....................................................................................33

               10.01   Payment of Expenses, Etc..................................................................33
               10.02   Right of Setoff...........................................................................34
               10.03   Notices...................................................................................34
               10.04   Benefit of Agreement......................................................................35
               10.05   No Waiver; Remedies Cumulative............................................................36
               10.06   Payments Pro Rata.........................................................................36
               10.07   GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL....................36
               10.08   Counterparts..............................................................................37
               10.09   Headings Descriptive......................................................................37
               10.10   Amendment or Waiver.......................................................................38
               10.11   Survival..................................................................................38
               10.12   Domicile of Loans.........................................................................38

</TABLE>



Schedules and Exhibits
----------------------
SCHEDULE I        Commitments
SCHEDULE II       Subsidiaries

EXHIBIT A         Original Lenders
EXHIBIT B         Investors
EXHIBIT C         Form of Original Note
EXHIBIT D         Form of Series A Convertible Note
EXHIBIT E         Form of Series B Convertible Note
EXHIBIT F         Form of Section 2.04(b)(ii) Certificate
EXHIBIT G         Form of Section 3.02(a) Certificate
EXHIBIT H         Reaffirmation
EXHIBIT I         Form of Assignment and Assumption Agreement



                                      -iii-
<PAGE>



                  AMENDED AND RESTATED SENIOR SUBORDINATED LOAN AGREEMENT, dated
as of April 14, 2004, among CD&L, INC., a corporation organized and existing
under the laws of the State of Delaware (the "Borrower"), the financial
institutions party hereto listed on Exhibit A (each, an "Original Lender") and
the individual parties hereto listed on Exhibit B (the "Investors", and
collectively with the Originals Lenders, the "Lenders"). Unless otherwise
defined herein, all capitalized terms used herein and defined in Section 8 are
used herein as therein defined.


                              W I T N E S S E T H :
                              -------------------

                  Background. Pursuant to a Senior Subordinated Loan Agreement
dated as of January 29, 1999, as amended (the "Original Loan Agreement"), the
Original Lenders provided loans (the "Original Loans") to the Borrower in the
original principal amount of $15.0 million. As of the date hereof, the Borrower
has repaid to the Lenders the principal sum of $4.0 million, and there remains
an outstanding principal balance due to the Lenders of $11.0 million. Such
indebtedness is evidenced by the Borrower's Senior Subordinated Promissory Notes
dated as of January 29, 1999 (the "Original Notes"). The Investors seek to
invest $4.0 million in the Borrower, subject to certain restructuring of the
Borrower's capital structure. Pursuant to an Exchange and Restructuring
Agreement dated this date (the "Exchange Agreement"), the Borrower, the
Investors and the Original Lenders have agreed as follows:

                  (a) The Original Lenders will exchange Original Notes in the
aggregate principal amount of $4.0 million for shares of the Series A
Convertible Redeemable Preferred Stock of CDL ("Preferred Stock") with a
liquidation preference of $4.0 million, and otherwise on the terms set forth in
the Certificate of Designation of the Preferred Stock described in and annexed
to the Exchange Agreement (the "Certificate of Designation");

                  (b) The Original Lenders will amend the terms of the $7.0
million balance of the Original Notes, and then exchange the Original Notes for
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 (the "Series B Convertible Notes") in the
principal amount of $4.0 million (collectively, the "Convertible Notes" or the
"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 Exchange
Agreement;

                  (c) The Investors will purchase the Series A Convertible Notes
from the Lenders for a purchase price of $3.0 million and the Lenders will
assign such Series A Convertible Notes to the Investors in such manner as set
forth in Schedule I hereto;

                  (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 this Agreement (the "New Loan" and together with the Original Loans,
the "Loans" as the same may be repaid pursuant to the terms hereof from time to
time), the proceeds of which shall be used in part to pay interest due as of the
date hereof on the Original Notes to the Lenders;


                                       -2-
<PAGE>




                  (e) The Investors and the Lenders will enter into a
Stockholders Agreement dated as of the date hereof (the "Stockholders
Agreement") to reflect certain agreements between them with respect to CDL; and

                  (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 are referred to as the "Transaction" and
collectively, the Loan Documents, the Exchange Agreement, the Certificate of
Designation, the Stockholders Agreement and the Registration Rights Agreement
are referred to as the "Transaction Documents").

To effectuate the foregoing, the Borrower, the Investors and the Original
Lenders have agreed to amend and restate the Original Loan Agreement in its
entirety to govern and reflect the terms of the Loans, the Series A Convertible
Notes and the Series B Convertible Notes (collectively, the "Convertible Notes"
or the "Notes").

                  NOW, THEREFORE, IT IS AGREED:

                  SECTION 1.   Amount and Terms of Loans.

                  1.01 The Original Loans. On or about January 29, 1999, each
Original Lender severally made an Original Loan in Dollars to the Borrower in a
principal amount equal to such Lender's commitment at such time. As of the date
hereof, after giving effect to the New Loan, the outstanding balance of the
Loans are reflected on Schedule I.

                  1.02 Notice of Borrowing. The Borrower shall give each
Investor at the address specified opposite its signature below, prior to 12:00
Noon (New York time) on the Business Day preceding the Closing Date, written
notice (or telephonic notice promptly confirmed in writing) of the proposed
Borrowing of Additional Loans.

                  1.03 Disbursement of Funds. No later than 12:00 Noon (New York
time) or the Closing Date, each Investor will make available to the Borrower an
amount equal to such Investor's Commitment, by wire transfer to an account
designated in writing by the Borrower to the Investors in Dollars and
immediately available funds.

                  1.04 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loan made to it by each Original Lender, has been
evidenced by a promissory note substantially in the form of Exhibit C (each, an
"Original Note" and, collectively, the "Original Notes").

                  (b) On the Closing Date, (x) the Original Note issued to each
         Original Lender shall (i) be endorsed and delivered to the Company in
         exchange for (a) a Convertible Note in the amount and series indicated
         on Schedule I, and (ii) Preferred Stock in the amount indicated on
         Schedule I. Each Convertible Note issued to each Original Lender and
         each Investor shall (i) be executed by the Borrower, (ii) be payable to
         the order of


                                       -3-
<PAGE>


         such Original Lender or its registered assigns and be dated the Closing
         Date, (iii) be in the stated principal amount equal to the Loan
         outstanding to such Original Lender on the Closing Date and be payable
         in the principal amount of the Loan evidenced thereby, (iv) mature on
         the Maturity Date, (v) bear interest as provided in Section 1.05, (vi)
         be subject to voluntary repayment and mandatory repayment as provided
         in Section 2.02, (vii) be convertible into shares of the Borrower's
         Common Stock on terms set forth in the forms of Series A Convertible
         Note and Series B Convertible Note, as the case may be, annexed hereto
         as Exhibits D and E and (viii) be entitled to the benefits of this
         Agreement and the Subordinated Guaranty.

                  (c) Each Original Lender and Investor will note on its
         internal records the amount of each Loan made or acquired by it and
         each payment in respect thereof and will, prior to any transfer of any
         Note, endorse on the reverse side thereof the outstanding principal
         amount of the Loan evidenced thereby. Failure to make any such notation
         shall not affect the Borrower's obligations in respect of the Loans.

                  1.05 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Loan from the Closing Date until
the maturity thereof (whether by acceleration or otherwise), at a rate which
shall be as follows:

                  (i) 9% per annum from the Closing Date to the Second
             Anniversary of the Closing Date,

                  (ii) 10.5% per annum from the Second Anniversary of the
             Closing Date of the Closing to the Fourth Anniversary of the
             Closing Date; and

                  (iii) 12% per annum from the Fourth Anniversary of the Closing
             Date to the Seventh Anniversary of the Closing Date.

                  (b) Interest shall be calculated on the basis of a 360-day
         year of twelve 30-day months and shall be computed on the balance of
         the principal outstanding from time to time, the first payment of
         interest to be due and payable 90 days following the Closing Date and
         on each Quarterly Payment Date, on any prepayment (on the amount
         prepaid), at maturity (whether by acceleration or otherwise), and after
         such maturity on demand.

                  (c) Overdue principal and, to the extent permitted by law,
         overdue interest in respect of each Loan and any other overdue amount
         payable hereunder shall, in each case, bear interest at a rate per
         annum equal to 2% in excess of the then applicable rate provided in
         clause (a) above and shall be payable on demand.

                  1.06 Capital Adequacy Regulations. If any Lender shall have
determined that after the date hereof, the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable


                                       -4-
<PAGE>



agency, has or would have the effect of reducing the rate of return on such
Lender's or such other corporation's capital or assets as a consequence of such
Lender's Commitment or Commitments hereunder or its obligations hereunder to a
level below that which such Lender or such other corporation could have achieved
but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's or such other corporation's policies with respect to
capital adequacy), then from time to time, upon written demand by such Lender,
accompanied by the notice referred to in the last sentence of this Section 1.06,
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such other corporation for such reduction. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use reasonable averaging and attribution methods. Each Lender,
upon determining that any additional amounts will be payable pursuant to this
Section 1.06, will give prompt written notice thereof to the Borrower, which
notice shall set forth in reasonable detail the basis of the calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 1.06 upon the subsequent receipt of such notice.

                  SECTION 2.   Repayment; Prepayments; Payments; Taxes.

                  2.01 Payment of Loans. The unpaid principal amount of the
Loans plus all accrued and unpaid interest thereon and all other amounts owed
hereunder with respect thereto shall be paid in full in cash on the Maturity
Date.

                  2.02 Mandatory and Voluntary Prepayments. (a) At any time
after the First Anniversary of the Closing Date, the Borrower may, upon not less
than twenty (20) days' and not more than sixty (60) days' prior written notice
to the Lenders, which notice shall be irrevocable, at any time and from time to
time, prepay the Loans in whole or in part, provided, however, that (i) each
partial prepayment pursuant to this Section 2.02(a) shall be in an aggregate
principal amount of at least $500,000 and, if greater, in integral multiples of
$500,000, and (ii) no such prepayment shall be made unless (x) there is no
Senior Indebtedness outstanding under the Credit Agreement and all commitments
under the Credit Agreement have been terminated or (y) the Credit Agreement
expressly permits such payments or the Bank has, in writing, consented to such
payment. In connection with any voluntary prepayment, there shall be no premium
or penalty upon any prepayment. The Lenders shall have the right to exercise
their conversion rights under the Convertible Notes following receipt of such
notice and prior to prepayment.

                  (b) Notwithstanding the foregoing, the Lenders and the
Borrower agree and acknowledge that the Credit Agreement prohibits any payments
that would otherwise be made to the Lenders under Section 2.02(a) and, as a
result thereof, no payment shall be made to the Lenders under Section 2.02(a)
unless and only to the extent the Credit Agreement is amended or modified to
provide that such amounts may be paid to the Lenders.

                  (c) Except in the event a given Lender waives any right to
payment of the Loans resulting from an Event of Default (or waives, in part,
repayment of a portion of its outstanding Loans to which it is otherwise
entitled as a result of an Event of Default), all prepayments which are applied
to principal will be applied on a pro rata basis to all Loans.


                                       -5-
<PAGE>



                  2.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to each Lender not later than 12:00 Noon (New York time) on the
date when due and shall be made in Dollars and in immediately available funds at
the address specified opposite such Lender's signature below. Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.

                  2.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 2.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income of a Lender pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Lender is located) and all interest, penalties
or similar liabilities with respect thereto (collectively, "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due hereunder or under any Note, after withholding or
deduction for or on account of any Taxes, will not be less than the amount
provided for herein or in such Note. If any amounts are payable in respect of
Taxes pursuant to the preceding sentence, then the Borrower shall be obligated
to reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income of such Lender pursuant to the laws of
the jurisdiction or any political subdivision or taxing authority thereof or
therein in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Lender is located and for any
withholding of taxes as such Lender shall determine are payable by or withheld
from such Lender in respect of such amounts so paid to or on behalf of such
Lender pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Lender pursuant to this sentence. The Borrower will furnish
to each Lender within 45 days after the date of the payment of any Taxes due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Lender.

                  (b) Each Lender that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower on or prior to the Closing Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to Section
10.04 (unless the respective Lender was already a Lender hereunder immediately
prior to such assignment or transfer), on the date of such assignment or
transfer to such Lender, (i) two accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete
exemption under an income tax treaty) (or successor forms) certifying to such
Lender's entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Lender is not a "bank" within the


                                       -6-
<PAGE>


meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit F (any such certificate, a "Section
2.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Lender's entitlement
as of such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that from time to time after the Closing
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower two new accurate and complete original signed copies of Internal
Revenue Service Form W-8ECI, Form W-8BEN (with respect to a complete exemption
under an income tax treaty) or Form W-8BEN (with respect to the portfolio
interest exemption) and a Section 2.04(b)(ii) Certificate, as the case may be,
and such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note, or it shall immediately notify the Borrower of its inability to deliver
any such Form or Certificate, in which case such Lender shall not be required to
deliver any such Form or Certificate pursuant to this Section 2.04(b).
Notwithstanding anything to the contrary contained in Section 2.04(a), but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 2.04(a) hereof to gross-up payments to be made to
a Lender in respect of income or similar taxes imposed by the United States if
(I) such Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section 2.04(b)
or (II) in the case of a payment, other than interest, to a Lender described in
clause (ii) above, to the extent that such forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 2.04,
the Borrower agrees to pay additional amounts and to indemnify each Lender in
the manner set forth in Section 2.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.

                SECTION 3.   Conditions Precedent to Exchange on the Closing
                             Date.

                The obligation of each Lender to consummate the transactions
contemplated hereby on the Closing Date is subject to the satisfaction of the
following conditions precedent:


                                       -7-
<PAGE>




                  3.01 Notes. On the Closing Date, there shall have been
delivered to each Lender and Investor the appropriate Convertible Notes, in each
case executed by the Borrower and in the amount, maturity and as otherwise
provided herein.

                  3.02 Corporate Documents; Proceedings. (a) On the Closing
Date, each Lender shall have received a certificate, dated the Closing Date,
signed by the Chief Executive Officer, Chief Financial Officer, President or any
Vice President of the Borrower, and attested to by the Secretary or any
Assistant Secretary of such Loan Party, in the form of Exhibit G with
appropriate insertions, together with copies of the resolutions of the Borrower
referred to in such certificate.

                  (b) All corporate and legal proceedings and all instruments
and agreements relating to the transactions contemplated by this Agreement, the
other Loan Documents and the other Documents shall be satisfactory in form and
substance to the Lenders, and each Lender shall have received all information
and copies of all documents and papers, including records of corporate
proceedings, governmental approvals, good standing certificates and bring-down
telegrams, if any, which such Lender may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.

                  3.03 Subordinated Guaranties. On the Closing Date, each
Subsidiary of the Borrower shall have duly authorized, executed and delivered a
Reaffirmation of its Subordinated Guaranty in the form of Exhibit H (as amended,
modified or supplemented from time to time in accordance with the terms hereof
and thereof, the "Subordinated Guaranty"), and the Subordinated Guaranty shall
be in full force and effect.

                  3.04 Litigation. On the Closing Date, no litigation by any
entity (private or governmental) shall be pending or threatened with respect to
this Agreement, any other Document or any documentation executed in connection
herewith or with respect to the Transaction, or which any Lender shall determine
could reasonably be expected to have a materially adverse effect on the
Transaction or on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole (after giving
effect to the Transaction).

                  3.05 Approvals. All necessary governmental and third party
approvals in connection with the Transaction (including, without limitation, all
necessary approvals from Fleet Bank, N.A.) shall have been obtained and remain
in effect. There shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction.

                  3.06 Material Adverse Change, Etc. Since December 31, 2003,
nothing shall have occurred (and none of the Lenders shall have become aware of
any facts or conditions not previously known) which the Required Lenders shall
determine (i) could reasonably be expected to have a material adverse effect on
the rights or remedies of the Lenders or on the ability of any Loan Party to
perform its obligations to the Lenders under this Agreement or any other Loan
Document, and (ii) could reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of any
Loan Party and its Subsidiaries taken as a whole (after giving effect to the
Transaction).


                                       -8-
<PAGE>




                  3.07 No Default; Representations and Warranties. After giving
effect to the Transaction (i) there shall exist no Default or Event of Default
and (ii) all representations and warranties contained herein or in the other
Loan Documents shall be true and correct in all material respects.

                  SECTION 4. Representations, Warranties and Agreements. In
order to induce the Lenders to enter into this Agreement, the Borrower makes the
following representations, warranties and agreements as to itself and its
Subsidiaries on and as of the Closing Date, all of which representations,
warranties and agreements shall survive the execution and delivery of this
Agreement and the other Loan Documents:

                  4.01 Status. Each Loan Party and its Subsidiaries (i) is a
duly organized and validly existing corporation (or a limited liability company
or partnership, as applicable) in good standing under the laws of the
jurisdiction of its organization, (ii) has the power and authority to own its
property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the ownership,
leasing or operation of property or the conduct of its business requires such
qualifications except for failures to be so qualified which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of such Loan Party
and its Subsidiaries taken as a whole.

                  4.02 Power and Authority. Each Loan Party and its Subsidiaries
has the power to execute, deliver and perform the terms and provisions of each
of the Documents to which it is party and has taken all necessary corporate
action (or limited liability company or partnership action if applicable) to
authorize the execution, delivery and performance by it of each of such
Documents. Each Loan Party and its Subsidiaries has duly executed and delivered
each of the Documents to which it is party, and each of such Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
bankruptcy, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by general equitable principles (regardless of
whether the issue of enforceability is considered in a proceeding in equity or
at law).

                  4.03 No Violation. Neither the execution, delivery or
performance by any Loan Party of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any applicable law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality applicable to
it, (ii) will conflict with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Credit Documents) upon any of the property or
assets of any Loan Party or its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument to which any of them are a
party or by which any of their property or assets is bound or to which any of
them may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws (or similar organizational documents) of any Loan Party
or its Subsidiaries.


                                       -9-
<PAGE>




                  4.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made on or prior to the Closing Date and
are in full force and effect), or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of any
Document, (ii) the legality, validity, binding effect or enforceability of any
such Document or (iii) the Transaction.

                  4.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; Etc. The consolidated financial statements of the
Borrower and its Subsidiaries as at and for the year ended December 31, 2003
present fairly in all material respects the financial position of the Borrower
at the dates of said statements and the results of operations for the period
covered thereby. Such financial statements have been prepared in accordance with
generally accepted accounting principles consistently applied except to the
extent provided in the notes to said financial statements. Since December 31,
2003, there has been no material adverse change in the performance, business,
assets, nature of assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.

                  4.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the Borrower and its Subsidiaries,
threatened (i) with respect to any Document or the transactions contemplated
thereby, or (ii) that are likely to materially and adversely affect the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

                  4.07 Capitalization. On the Closing Date, after giving effect
to the Transaction, the authorized capital stock of the Borrower consists of (i)
30,000,000 shares of common stock, $0.001 par value per share (the "Borrower
Common Stock"), of which 7,658,660 shares are issued and outstanding, and (ii)
2,000,000 shares of preferred stock, $0.001 par value per share (the "Borrower
Preferred Stock"), none of which shares were issued and outstanding prior to the
Closing Date. All of such outstanding shares have been be duly and validly
issued, are fully paid and nonassessable.

                  4.08 Use of Proceeds; Margin Regulations. (a) All proceeds of
the Additional Loans shall be used by the Borrower (i) to pay accrued interest
on the Notes and (ii) thereafter, to repay outstanding loans under the Credit
Agreement or for other working capital and general corporate purposes.

                  (b) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purposes of
purchasing or carrying any margin Stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of Regulation T, U or X of the Board of Governors of the Federal Reserve System.


                                      -10-
<PAGE>




                  4.09 Subsidiaries. On the Closing Date, the corporations,
limited liability companies and partnerships listed on Schedule III are the only
Subsidiaries of the Borrower. Schedule III correctly sets forth, as of the
Closing Date, the percentage ownership (direct and indirect) of the Borrower in
each class of capital stock (or other equity interests) of such Subsidiaries and
also identifies the direct owner thereof.

                  4.10 The Transaction. All aspects of the Transaction have been
effected in accordance with the Documents and all applicable law. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Transaction shall have been obtained, given, filed or taken and are in full
force and effect (or effective judicial relief with respect thereto has been
obtained). Additionally, at the time of consummation thereof, there does not
exist any judgment, order or injunction prohibiting or imposing material adverse
conditions upon the consummation of the Transaction, and there does not exist
any judgment, order or injunction prohibiting or imposing any material adverse
condition upon the Loans or the performance by any of the Loan Parties or their
Subsidiaries of their obligations under the Documents.

                  4.11 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.

                  4.12 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

                  4.13 Valid Issuance of Borrower Common Stock. The Borrower has
duly authorized and reserved a sufficient number of shares of Borrower Common
Stock for issuance upon the conversion of the Convertible Notes without giving
effect to any additional shares of Borrower Common Stock which may be issued
after giving effect to antidilution adjustments to the conversion of the
Convertible Notes after the Closing Date pursuant to the Convertible Notes. The
Borrower Common Stock, when issued and delivered by the Borrower pursuant to
conversion of the Convertible Notes, will be duly and validly issued, fully paid
and non-assessable securities of the Borrower free and clear of all Liens, and
no Person has any preemptive rights to subscribe for any capital stock of the
Borrower.

                  SECTION 5.   Affirmative Covenants. The Borrower covenants and
agrees that on and after the Closing Date and until the Loans and Convertible
Notes, together with interest, and all other Obligations, are paid in full:


                                      -11-
<PAGE>



                  5.01 Information Covenants. The Borrower shall furnish to each
Lender:

                           (a) Quarterly Financial Statements. On the earlier to
         occur of (x) the date of the filing of the Borrower's Form 10-Q Report
         with the SEC for or (y) the date occurring 50 days after the close of,
         each of the first three quarterly accounting periods in each fiscal
         year of the Borrower, the consolidated and consolidating balance sheets
         of the Borrower and its Subsidiaries as at the end of such quarterly
         period and the related consolidated and consolidating statements of
         earnings and stockholders' equity and statement of cash flows for such
         quarter, in each case for such quarterly period and for the elapsed
         portion of the fiscal year ended with the last day of such quarterly
         period, in each case setting forth comparative figures for the related
         periods in the prior fiscal year and comparable budgeted figures for
         such period, all of which shall be certified by the chief financial
         officer or controller of the Borrower, subject to normal year-end audit
         adjustments and shall be accompanied by a management discussion and
         analysis of the results of operations and financial condition with
         respect to such period.

                           (b) Annual Financial Statements. On the earlier to
         occur of (x) the date of the filing of the Borrower's Form 10-K Report
         with the SEC for or (y) the date occurring 105 days after the close of,
         each fiscal year of the Borrower, the consolidated and consolidating
         balance sheets of the Borrower and its Subsidiaries as at the end of
         such fiscal year and the related consolidated and consolidating
         statements of earnings and stockholders' equity and statement of cash
         flows for such fiscal year and setting forth comparative figures for
         the preceding fiscal year and comparable budgeted figures for such
         period and certified, (x) in the case of the consolidating statements
         by the chief financial officer or controller of the Borrower and (y) in
         the case of the consolidated financial statements of the Borrower and
         its Subsidiaries, by any of the "big five" or other independent
         certified public accountants of recognized national standing reasonably
         acceptable to the Required Lenders, together with a signed opinion of
         such accounting firm (which opinion shall not be qualified in any
         respect) stating that in the course of its regular audit of the
         financial statements of the Borrower, which audit was conducted in
         accordance with generally accepted auditing standards, such accounting
         firm obtained no knowledge of any Default or Event of Default which has
         occurred and is continuing or, if in the opinion of such accounting
         firm such a Default or Event of Default has occurred and is continuing,
         a statement as to the nature thereof and shall be accompanied by a
         management discussion and analysis of the results of operations and
         financial condition with respect to such period.

                           (c) Officers' Certificates. At the time of the
         delivery of the financial statements provided for in Section 5.01(a),
         (b) and (c), a certificate of the chief financial officer or
         controller, of the Borrower to the effect that no Default or Event of
         Default has occurred and is continuing or, if any Default or Event of
         Default has occurred and is continuing, specifying the nature and
         extent thereof, which certificate, in the case of certificates
         delivered pursuant to Section 5.01(b) or (c), shall set forth the
         calculations required to establish whether the Borrower was in
         compliance with the provisions of Sections 6.03 at the end of such
         fiscal quarter.

                           (d) Notice of Default or Litigation. Promptly, and in
         any event within two Business Days after an officer of any of the Loan
         Parties or their Subsidiaries obtains knowledge thereof, notice of (i)
         the occurrence of any event which constitutes a Default or Event of
         Default, (ii) any litigation or governmental investigation or
         proceeding pending (x) against any of the Loan Parties or their
         Subsidiaries which could reasonably


                                      -12-
<PAGE>


         be expected to materially and adversely affect the performance,
         business, assets, nature of assets, liabilities, operations,
         properties, condition (financial or otherwise) or prospects of the
         Borrower and its Subsidiaries taken as a whole or (y) with respect to
         any Document, and (iii) any other event which could reasonably be
         expected to materially and adversely affect the performance, business,
         assets, nature of assets, liabilities, operations, properties,
         condition (financial or otherwise) or prospects of the Borrower and its
         Subsidiaries taken as a whole.

                           (e) Other Reports and Filings. Promptly upon
         transmission thereof, copies of any financial information, proxy
         materials and other information and reports, if any, which any of the
         Loan Parties or their Subsidiaries (x) has filed with the Securities
         and Exchange Commission or any successor thereto (the "SEC") or (y) has
         delivered to holders of, or any agent or trustee with respect to,
         Indebtedness (including the holders of any Senior Indebtedness) of such
         Loan Party or such Subsidiary in its capacity as such a holder, agent,
         or trustee.

                           (f) Environmental Matters. Promptly upon, and in any
         event within five Business Days after an officer of any of the Loan
         Parties or any of their Subsidiaries obtains knowledge thereof, notice
         of any of the following environmental matters: (i) any pending or
         threatened material Environmental Claim against any of the Loan
         Parties, any of their Subsidiaries, any Real Property owned or operated
         by any of the Loan Parties or any of their Subsidiaries; (ii) any
         condition or occurrence on or arising from any Real Property owned or
         operated at any time by any of the Loan Parties or any of their
         Subsidiaries that (A) could reasonably be anticipated to result in a
         material noncompliance by such Loan Party or Subsidiary with any
         applicable Environmental Law, or (B) could reasonably be anticipated to
         form the basis of a material Environmental Claim against such Loan
         Party or Subsidiary or any Real Property owned or operated by such Loan
         Party or Subsidiary; (iii) any condition or occurrence on any Real
         Property owned or operated by any of the Loan Parties, any of their
         Subsidiaries or any property adjoining such Real Property that could
         reasonably be anticipated to cause any of such Real Property owned or
         leased by the Borrower or any of its Subsidiaries to be subject to any
         material restrictions on the ownership, occupancy, use or
         transferability of such Real Property under any Environmental Law; and
         (iv) the taking of any removal or remedial action in response to a
         material Release or material threatened Release or the actual or
         alleged presence of any Hazardous Material on or from any Real Property
         owned or operated at any time by any of the Loan Parties or any of
         their Subsidiaries in each case as required by any Environmental Law or
         any governmental or other administrative agency. All such notices shall
         describe in reasonable detail the nature of the claim, investigation,
         condition, occurrence or removal or remedial action and such Loan
         Party's, such Subsidiary's response thereto. In addition, Borrower will
         provide the Lenders with copies of all material non-privileged
         communications with any government or governmental agency relating to
         Environmental Claims, all material non-privileged communications with
         any person relating to material Environmental Claims, and such detailed
         reports of any material Environmental Claim as may reasonably be
         requested by the Required Lenders.


                                      -13-
<PAGE>




                           (g) Credit Agreement Notices. Promptly upon
         transmission thereof, a copy of any notice of default furnished by the
         Borrower under Article VI of the Credit Agreement simultaneously with
         the delivery thereof to the Bank.

                           (h) Other Information. From time to time, such other
         information or documents (financial or otherwise) with respect to any
         Loan Party or its Subsidiaries, as any Lender may reasonably request.

                  5.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, keep proper books of record and account
in which full, true and correct entries, in conformity with United States
generally accepted accounting principles and all requirements of law, shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower shall, and shall cause each of its Subsidiaries to,
permit, upon reasonable notice, officers and designated representatives of any
Lender to visit and inspect, under guidance of officers of the Borrower or such
Subsidiaries, any of the properties of the Borrower or its Subsidiaries, and to
examine the books of account of the Borrower or its Subsidiaries and discuss the
affairs, finances and accounts of the Borrower or its Subsidiaries with, and be
advised as to the same by, its and their officers, all at such reasonable times
and intervals and to such reasonable extent as such Lender may request.

                  5.03 Maintenance of Property, Insurance. The Borrower will,
and will cause each of its Subsidiaries to, (i) keep all material property
useful and necessary in its business in good working order and condition
(ordinary wear and tear excepted), and (ii) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks and liabilities and with such
deductibles or self-insured retentions as are customary in the industry of the
Borrower.

                  5.04 Corporate Franchises. The Borrower shall, and shall cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises licenses and patents; provided, however, that nothing in this
Section 5.04 shall prevent the withdrawal of any such Person of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

                  5.05 Compliance with Statutes, Etc. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.


                                      -14-
<PAGE>



                  5.06 Compliance with Environmental Laws. The Borrower shall,
and shall cause each of its Subsidiaries to, comply, in all material respects,
with all Environmental Laws applicable to the ownership or use of all the Real
Property, and shall promptly pay, or cause its Subsidiaries to promptly pay all
costs and expenses incurred in such compliance, and will keep or cause to be
kept the Borrower's or its Subsidiaries' interest in all owned Real Properties
free and clear of any Liens imposed pursuant to such Environmental Laws imposed
in connection with their ownership or use. Neither the Borrower nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of, or permit
the generation, use, treatment, storage, Release or disposal of Hazardous
Materials on any Real Property, or transport or permit the transportation of
Hazardous Materials to or from any Real Property, other than in the normal
course of business in compliance with applicable law. If required to do so under
any applicable directive or order of any governmental agency, the Borrower
agrees to undertake, and cause each of its Subsidiaries to undertake, any clean
up, removal, remedial or other action necessary to remove and clean up any
Hazardous Materials from any Real Property owned, leased or operated by the
Borrower or any of its Subsidiaries in accordance with, in all material
respects, such orders and directives of all governmental authorities, except to
the extent that the Borrower or such Subsidiary is contesting such order or
directive in good faith and by appropriate proceedings and for which adequate
reserves have been established to the extent required by GAAP; provided that it
will not constitute a breach of this Section 5.06 if a Person other than the
Borrower and its Subsidiaries takes such action on behalf of the Borrower and
its Subsidiaries.

                  5.07 End of Fiscal Years; Fiscal Quarters. The Borrower will
cause its, and each of its Subsidiaries', fiscal years (unless any Foreign
Subsidiary is required to adopt a different fiscal year under applicable law) to
end on December 31 of each year and each of its, and each of its Subsidiaries',
four fiscal quarters to end on March 31, June 30, September 30 and December 31
of each year.

                  5.08 Payment of Taxes. The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties would
otherwise attach thereto, and all lawful claims which, if unpaid, might become a
lien or charge upon any properties of any of its Subsidiaries; provided,
however, that neither the Borrower nor any of its Subsidiaries shall be required
to pay any such tax, assessment, charge, levy or claim which is being contested
in good faith and by proper proceedings if it has maintained adequate reserves
with respect thereto in accordance with generally accepted accounting
principles.

                  5.09 Observation of Board of Directors. In the event that the
Original Lenders have not elected directors to the Board pursuant to the terms
of the Certificate of Designation for the Preferred Shares, Paribas may
designate one individual (the "Observer") to attend all meetings of the Board of
Directors of the Borrower (and any committees thereof) at the reasonable expense
of the Borrower. The Observer shall be entitled to receive all reports,
presentations and materials, as if the Observer were a member of the Board of
Directors, all at the reasonable expense of the Borrower. The Borrower agrees to
give the Observer prior written notice of all meetings of the Board of Directors
of the Borrower promptly after the scheduling thereof and in any event no later
than five Business Days prior to such meeting, or if such meeting is scheduled
less than five Business Days in advance, on the date preceding the date for
which such meeting has been scheduled.


                                      -15-
<PAGE>




                  5.10 Use of Proceeds, Margin Regulations. (a) The Borrower
shall use all proceeds of the Additional Loans as provided in Section 4.08(a).

                  (b) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose of
purchasing or carrying any Margin stock. Neither the making of any Loan nor the
use of the proceeds thereof will violate or be inconsistent with the provisions
of the Regulation T, U or X of the Board of Governors of the Federal Reserve
System.

                  5.11 Intellectual Property Rights. The Borrower will, and will
cause each of its Subsidiaries to, maintain in full force and effect all
Intellectual Property rights necessary or material to the business of the
Borrower or any Subsidiary of the Borrower and take no action (including,
without limitation, the licensing of Intellectual Property), or fail to take an
action, as the case may be, in connection with such Intellectual Property rights
which could reasonably be expected to result in a material adverse effect on the
performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole. The Borrower shall, and shall cause each of
its Subsidiaries to, diligently prosecute all pending applications filed in
connection with seeking the Intellectual Property rights and take all other
reasonable actions necessary for the protection and maintenance of the
Intellectual Property rights necessary or appropriate to the business of the
Borrower or any Subsidiary of the Borrower at all times from and after the
Closing Date other than any such actions the failure of which, in the aggregate,
could not reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.

                  SECTION 6.   Negative Covenants. The Borrower hereby covenants
that on and after the Closing Date and until the Loans and Convertible Notes,
together with interest and all other Obligations incurred hereunder and
thereunder, have been paid in full:

                  6.01 Dividends. The Borrower will not, nor will the Borrower
permit any of its Subsidiaries to, declare or pay any Dividends with respect to
the Borrower or any of its Subsidiaries, except that (i) any Subsidiary of the
Borrower may pay Dividends to the Borrower or any Wholly-Owned Domestic
Subsidiary of the Borrower and (ii) so long as no Default or Event of Default is
then in existence or would result from the payment of the respective Dividend,
the Borrower may pay cash Dividends not to exceed (x) $500,000 per annum in the
form of one or more purchases of Warrants from Paribas or any of its Affiliates
pursuant to its right of first offer under Section 14(d) of the Warrant
Agreement and (y) $250,000 per annum in the form of one or more purchases of
Warrants from any Exeter Entity or any of its Affiliates pursuant to its right
of first offer under Section 14(d) of the Warrant Agreement.

                  6.02 Consolidated EBITDA to Interest. The Borrower will not
permit the ratio of Consolidated EBITDA for any period of four consecutive
fiscal quarters, in each case taken as one accounting period, to be less than
three times the FTM Interest Payments for such same period of four consecutive
fiscal quarters, as determined at the end of each fiscal quarter.


                                      -16-
<PAGE>




                  6.03 Limitation on Voluntary Payments and Modifications;
Limitation on Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Etc. The Borrower shall not, and shall not permit its
Subsidiaries to:

                           (a) make (or give any notice in respect of) any
         voluntary or optional payment or prepayment on or voluntary or optional
         redemption (including pursuant to any change of control provision) or
         voluntary or optional acquisition for value of (including, without
         limitation, by way of depositing with the trustee with respect thereto
         money or securities before due for the purpose of paying when due), of
         any Indebtedness that is not Senior Indebtedness;

                           (b) amend or modify, or permit the amendment or
         modification of any provision of the Existing Indebtedness or any
         agreement relating to any of the foregoing in any manner adverse to the
         Lenders; or

                           (c) amend or modify or change its Certificate of
         Incorporation (including, without limitation, by the filing or
         modification of any certificate of designation), By-Laws (or similar
         organizational documents) or any agreement entered into by it with
         respect to its capital stock or other equity interests in any manner
         adverse to the Lenders.

                  6.04 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (i) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower, (ii) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (iii) transfer any of its properties or assets to the Borrower,
except for such encumbrances or restrictions existing under or by reason of (v)
applicable law, (w) this Agreement and the other Loan Documents, (x) the Credit
Agreement and the other Credit Documents, (y) customary provisions restricting
subletting or assignments of any lease governing a leasehold interest of the
Borrower or any other Subsidiary of the Borrower and (z) any asset transfer
restrictions imposed by purchase money financing.

                  SECTION 7.   Events of Default. Upon the occurrence of any of
the following specified events (each, an "Event of Default"):

                  7.01 Payments. The Borrower shall default in the payment of
the principal of, interest on or any other amount due in respect of, the
Convertible Notes, by the fifth business day following the date that same shall
become due and payable (whether on an interest payment date or the Maturity
Date, by acceleration or otherwise).

                  7.02 Covenants. Other than in respect of Section 6.02, the
Borrower shall fail to observe or perform any other covenant, agreement or
warranty relating to the Convertible Notes, and such failure or breach shall not
have been remedied within ten (10) business days after notice of such failure or
breach has been given to the Borrower.


                                      -17-
<PAGE>



                  7.03 Stockholders Agreement. The Borrower or any Subsidiary
shall have entered into any agreement or taken any action described in Section
5.2(a) through (h) of the Stockholders Agreement without obtaining any required
approval of the holders of a majority of the shares of the Preferred Stock, if
required by Section 5.2 of the Stockholders Agreement.

                  7.04 Default Under Other Agreements. The Borrower shall
default in any of its payment obligations under any other debenture of any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issues, or by which there
may be secured or evidenced any indebtedness for borrowed money or money due
under any long term leasing or factoring arrangement of the Borrower in an
amount exceeding $100,000.

                  7.05 Bankruptcy, Etc. The Borrower shall commence, or there
shall be commenced against the Borrower, a case under any applicable bankruptcy
or insolvency laws which remains undismissed for a period of sixty (60) days; or
the Borrower suffers any appointment of any custodian for it or any substantial
part of its property which continues undischarged or unstayed for a period of 60
days; or the Borrower thereof makes a general assignment for the benefit of
creditors; or the Borrower shall fail to pay, or shall state that it is unable
to pay, or shall be unable to pay, its debts generally as they become due.

                  7.06 Subordinated Guaranty. The Subordinated Guaranty or any
provision thereof shall cease to be in full force or effect as to any
Subordinated Guarantor, or any Subordinated Guarantor or any Person acting by or
on behalf of any Subordinated Guarantor shall deny or disaffirm such
Subordinated Guarantor's obligations under the Subordinated Guaranty, or any
Subordinated Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant to
the Subordinated Guaranty and such default shall continue beyond any grace
period specifically applicable thereto.

                  7.07 TTM EBITDA. The Borrower shall at any time fail to
satisfy the financial covenant set forth in Section 6.02 then, and in any such
event, and at any time thereafter, if any Event of Default shall then be
continuing, the Required Lenders (or, in the case of an Event of Default under
Section 7.01, any Lender (or group of Lenders that are affiliates of one
another) with outstanding Loans in an aggregate principal equal to at least
$5,000,000) may, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of any other Lender or the
holder of any Convertible Note to enforce its claims against any Loan Party
(provided that, if an Event of Default specified in Section 7.04 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Required Lenders to the Borrower as specified in clause
(i) below shall occur automatically without the giving of any such notice): (i)
declare the principal of and any accrued interest in respect of all Loans and
the Convertible Notes and all Obligations to be, whereupon the same shall,
subject to Section 9.04 hereof, become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; and (ii) exercise any rights or remedies under
the Subordinated Guaranty.


                                      -18-
<PAGE>




                  SECTION 8.   Definitions and Accounting Terms.

                  8.01 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):

                  "Additional Loan" shall mean the loan of $1 million being
provided by the Investors this date.

                  "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.

                  "Agreement" shall mean this amended and restated loan
agreement, as modified, supplemented or amended from time to time.

                  "Anniversary" shall mean April 14 in any year. "First
Anniversary" shall mean April 14, 2005, "Second Anniversary" shall mean April
14, 2006, etc., through the "Seventh Anniversary", which shall mean April 14,
2011.

                  "Bank" shall mean, collectively, Fleet and any other
institution which becomes a "Lender" under the Credit Agreement pursuant to the
terms thereof after the Closing Date.

                  "Board" shall mean the Board of Directors of the Borrower.

                  "Borrower" shall have the meaning provided in the first
paragraph of this Agreement.

                  "Borrower Common Stock" shall have the meaning provided in
Section 4.07.

                  "Business Day" shall mean any day except Saturday, Sunday and
any day which shall be in New York City a legal holiday or a day on which
banking institutions are authorized or required by law or other government
action to close.

                  "Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than twelve months from the date of acquisition, (ii) time deposits
and certificates of deposit of any commercial bank organized under the laws of
the United States, any State thereof or the District of Columbia having, or
which is the principal banking subsidiary of a bank holding company organized
under the laws of the United States, any State thereof, or the District of
Columbia having, capital, surplus and undivided profits aggregating in excess of
$200,000,000 and having a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Corporation ("S&P") or "A2" or the
equivalent thereof from Moody's Investors Service, Inc. ("Moody's"), with
maturities of not more than twelve months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more


                                      -19-
<PAGE>


than 7 days for underlying securities of the types described in clause (i) above
entered into with any bank meeting the qualifications specified in clause (ii)
above, (iv) commercial paper issued by any Person incorporated in the United
States and/or tax exempt securities issued by any agency or instrumentality of
any state of the United States or subdivision thereof, in each case rated at
least A-2 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and in each case maturing not more than 12 months after the
date of acquisition by such Person, (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above and (vi) as to any Foreign
Subsidiary, securities available in the applicable foreign country where such
Foreign Subsidiary operates and which are reasonably equivalent as to credit
quality and principal risk as the securities of the types described in clauses
(i) through (v) above.

                  "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 et seq.

                  "Claims" shall have the meaning provided in the definition of
"Environmental Claims."

                  "Closing Date" shall mean April 14, 2004.

                  "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder. Section references to the Code are to the Code, as in effect
at the date of this Agreement, and to any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.

                  "Consolidated EBIT" shall mean, for any period, the
Consolidated Net Income before any deduction for interest income, Consolidated
Interest Expense, amortization of deferred financing charges, debt discounts and
premiums and provision for income taxes and without giving effect to (i) any net
extraordinary gains or losses, or (ii) any gains or losses from sales of assets
(other than inventory sold in the ordinary course of business) or (iii) any
writeoffs of deferred financing charges, goodwill or debt discounts or premiums.

                  "Consolidated EBITDA" for any period shall mean Consolidated
EBIT, adjusted by adding thereto the amount of all amortization of intangibles
and depreciation and leasehold improvements that were deducted in arriving at
Consolidated Net Income for such period.

                  "Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the Borrower and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) payable during such period (but excluding amortization of deferred
financing charges and debt discounts or premiums) in respect of all Indebtedness
of the Borrower and its Subsidiaries, on a consolidated basis, for such period.

                  "Consolidated Net Income" shall mean, for any period, net
income of the Borrower and its Subsidiaries for such period determined on a
consolidated basis (after provision for taxes); provided, however, the net
income of any Subsidiary of the Borrower, which is not a Wholly-Owned Subsidiary
and for which the investment of the Borrower therein is accounted for by the
equity method of accounting, shall have its net income included in the
Consolidated Net Income of the Borrower and its Subsidiaries only to the extent
of the amount of cash dividends or distributions paid by such Subsidiary to the
Borrower.


                                       -20-
<PAGE>




                  "Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.

                  "Credit Agreement" shall mean the Loan and Security Agreement,
dated as of June 27, 2002, among the Borrower, certain of its Subsidiaries and
the Bank, as amended prior to the Closing Date and as such agreement may, be
further amended, restated, extended, replaced, supplemented, restructured or
otherwise modified or refinanced pursuant to a Permitted Refinancing from time
to time (in whole or in part without limitation (except as provided in this
Agreement) as to terms, extensions of maturities, increasing the amount of
borrowings or other conditions or covenants), including all related notes,
collateral documents, guarantees, Interest Rate Contracts, instruments and
agreements entered into in connection therewith, as the same may be amended,
modified, supplemented, restated, restructured, replaced or refinanced pursuant
to a Permitted Refinancing from time to time.

                  "Credit Documents" shall mean the "Loan Documents", as defined
in the Credit Agreement (as in effect on the date hereof).

                  "Credit Party" shall mean the Borrower and each of its
Subsidiaries party to any Credit Document.

                  "Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.

                  "Dividend", with respect to any Person, shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than capital stock of such Person) or cash to its
stockholders in their capacity as stockholders, or redeemed, retired, purchased
or otherwise acquired, directly or indirectly, for a consideration any shares of
any class of its capital stock outstanding on or after the Closing Date


                                      -21-
<PAGE>


(or any options or warrants issued by such Person with respect to its capital
stock), or set aside any funds for any of the foregoing purposes, or shall have
permitted any Subsidiary of such Person to purchase or otherwise acquire for a
consideration any shares of any class of the capital stock of such Person
outstanding on or after the Closing Date (or any options or warrants issued by
such Person with respect to its capital stock). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all cash payments made
or required to be made by such Person with respect to any stock appreciation
rights, equity incentive plans or any similar plans or setting aside of any
funds for the foregoing purposes.

                  "Documents" shall mean the Loan Documents and the Credit
Documents.

                  "Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.

                  "Domestic Subsidiaries" shall mean each Subsidiary of the
Borrower incorporated or organized in the United States or any State or
territory thereof.

                  "Eligible Transferee" shall mean and include the Investors, a
commercial bank, financial institution, other "accredited investor" (as defined
in Regulation D of the Securities Act), other than an individual, that is not a
competitor of the Borrower or any of its Subsidiaries, or a "qualified
institutional buyer" as defined in Rule 144A of the Securities Act.

                  "Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any violation of, or liability under, any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereafter, "Claims"), including, without limitation, (a) any
and all Claims by governmental or regulatory authorities for enforcement,
cleanup, removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law, and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials arising from alleged injury
or threat of injury to health, safety or the environment.

                  "Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, policy and rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 7401 et seq.; the Clean Air Act, 42
U.S.C. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et
seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.; and any
applicable state and local or foreign counterparts or equivalents.

                  "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.


                                      -22-
<PAGE>




                  "ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which, together with the Borrower or any Subsidiary of
the Borrower, would be deemed to be a "single employer" (i) within the meaning
of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Borrower or a Subsidiary of the Borrower being or having been a general partner
of such person.

                  "Event of Default" shall have the meaning provided in
Section 7.

                  "Exchange Act" shall mean the Securities Exchange Act of 1934,
as in effect on the Closing Date.

                  "Exeter Entity" shall mean each of Exeter Venture Lenders L.P.
and Exeter Capital Partners IV, L.P. and any Affiliate that is a successor
thereto.

                  "Fleet" shall mean Fleet Bank, N.A. or any successor thereto
by merger or consolidation.

                  "FTM Interest Payments" shall mean interest due on all
Indebtedness of the Borrower at the contract rates over the twelve month period
commencing at the date of measurement.

                  "Hazardous Materials" means (a) petroleum or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain,
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous waste," "restricted hazardous waste," "toxic substances,"
"toxic pollutants," "contaminants," or "pollutants," or words of similar meaning
and regulatory effect, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated under applicable Environmental Laws.

                  "Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal and interest) of such
Person for borrowed money or for the deferred purchase price of property or
services (including, without limitation, any contingent consideration (including
Permitted-Earnout Debt) or seller paper which may be payable or issuable in
connection with acquisitions by the Borrower or any of its Subsidiaries) other
than trade payables and accrued expenses arising in the ordinary course of
business in accordance with customary trade terms, (ii) the maximum amount
available to be drawn under all letters of credit issued for the account of such
Person and all unpaid drawings in respect of such letters of credit, (iii) all
Indebtedness of the types described in clauses (i), (ii), (iv), (v), (vi) or
(vii) of this definition secured by any Lien on any property owned by such
Person, whether or not such Indebtedness has been assumed by such Person, (iv)
all Capitalized Lease Obligations of such Person, (v) all Contingent Obligations
of such Person, (vi) mandatory obligations of such Person to redeem or purchase
Stock or purchase or repay Indebtedness and (vii) any Financial Undertaking (as
such term is defined in the Credit Agreement (as in effect on the date hereof))
of such Person.


                                      -23-
<PAGE>




                  "Indemnified Matters" shall have the meaning provided in
Section 10.01.

                  "Indemnitees" shall have the meaning provided in Section
10.01.

                  "Interest Rate Contract" shall mean interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
interest rate insurance, and other agreements or arrangements designed to
provide protection against fluctuations in interest rates, each as in effect on
the date hereof.

                  "Investor" shall have the meaning provided in the first
paragraph of this Agreement.

                  "Leasehold Properties" of any Person means all right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.

                  "Lender" and "Original Lender" shall have the meanings
provided in the first paragraph of this Agreement.

                  "Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).

                  "Loan" has the meaning specified in the first paragraph of
this Agreement.

                  "Loan Documents" shall mean, collectively, this Agreement,
each Convertible Note, and each Subordinated Guaranty.

                  "Loan Party" means each of the Borrower and each Subordinated
Guarantor.

                  "Maturity Date" shall mean April 14, 2011.

                  "Moody's" shall have the meaning provided in the definition of
"Cash Equivalents."

                  "Non-Payment Blockage Notice" shall have the meaning provided
in Section 9.03.

                  "Non-Payment Blockage Period" shall have the meaning provided
in Section 9.03.

                  "Non-Payment Default" shall have the meaning provided in
Section 9.03.


                                      -24-
<PAGE>




                  "Note" and "Convertible Note" shall have the meanings provided
in the Background section.

                  "Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to any Lender pursuant to the terms of this Agreement or any other Loan
Document, including without limitation, all principal, interest, premium,
penalties, fees, expenses, indemnification, reimbursements, damages and any
other liabilities, together with and including any amounts received upon the
exercise of rights of recession or other rights of action (including claims for
damages) or otherwise.

                  "Observer" shall have the meaning provided in Section 5.12.

                  "Paribas" shall mean BNP Paribas, a French societe anonyme,
and the successor in interest to Paribas Capital Funding LLC.

                  "Payment Default" shall have the meaning provided in Section
9.03.

                  "PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.

                  "Permitted Refinancing" means any refinancing of Senior Debt
which refinancing does not result in the final maturity date of the Senior Debt
occurring prior to November 15, 2001.

                  "Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.

                  "Plan" shall mean any pension plan, as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.

                  "Quarterly Payment Date" shall mean the first Business Day of
each March, June, September and December of each calendar year.

                  "RCRA" shall mean the Resource Conservation and Recovery Act,
as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.

                  "Reaffirmation" shall mean each Subsidiary Grantor's
reaffirmation of its obligations under its guaranty of the Loan and Notes in the
form set forth in Exhibit H.

                  "Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leasehold Properties.


                                      -25-
<PAGE>




                  "Related Fund" shall mean, with respect to any Lender that is
a fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

                  "Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.

                  "Required Lenders" shall mean, at any time, Lenders the sum of
whose then outstanding Loans represents at least a majority of all then
outstanding Loans.

                  "S&P" shall have the meaning provided in the definition of
"Cash Equivalents."

                  "SEC" shall have the meaning provided in Section 5.01(h).

                  "Section 2.04(b)(ii) Certificate" shall have the meaning
provided in Section 2.04(b)(ii).

                  "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

                  "Senior Debt" shall mean all payment and performance
obligations now or hereafter incurred pursuant to and in accordance with the
terms of the Credit Agreement and the other Credit Documents (including without
limitation all principal, interest (including, without limitation, any
post-petition interest on such obligations at the rate set forth in the Credit
Agreement, accruing whether or not granted or permitted in connection with an
event of the type referred to in Section 7.04 hereof), premium, penalties, fees,
expenses, indemnification, reimbursements, damages and other liabilities payable
under the Credit Agreement and the other Credit Documents) and any Interest Rate
Contract. Senior Debt outstanding under the Credit Agreement shall continue to
constitute Senior Debt for all purposes hereof, notwithstanding that such Senior
Debt or any claim in respect thereof may be disallowed, avoided or subordinated
pursuant to any insolvency law, the United States Bankruptcy Code or any similar
federal or state law for the relief of debtors or other applicable insolvency
law or equitable principles as a claim for unmatured interest.

                  "Senior Indebtedness" shall mean collectively, with respect to
the Borrower and its Subsidiaries, (a) the Senior Debt and (b) any additional
Indebtedness of the Borrower and its Subsidiaries for borrowed money which is
either secured or not subordinated to the payment of the Obligations, or (ix),
which additional Indebtedness may be incurred pursuant to the Credit Agreement.
Senior Indebtedness outstanding under the Credit Agreement shall continue to
constitute Senior Indebtedness for all purposes hereof, notwithstanding that
such Senior Indebtedness or any claim in respect thereof may be disallowed,
avoided or subordinated pursuant to any insolvency law, the United States
Bankruptcy Code or any similar federal or state law for relief of debtors or
other applicable insolvency law or equitable principles as a claim for unmatured
interest.


                                      -26-
<PAGE>




                  "Subordinated Guarantor" shall mean each Domestic Subsidiary
and each other Subsidiary which has entered into the Subordinated Guaranty in
accordance with this Agreement.

                  "Subordinated Guaranty" shall have the meaning provided in
Section 3.03 as the same may be amended, modified or supplemented from time to
time.

                  "Subordinated Obligations" shall have the meaning set forth in
Section 9.01.

                  "Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through one or more Subsidiaries of such Person has more
than a 50% equity interest at the time.

                  "Taxes" shall have the meaning provided in Section 2.04(a).

                  "Transaction" shall have the meaning set forth in the
Background Section.

                  "TTM EBITDA" shall mean Consolidated EBITDA over the twelve
month period ending on the measurement date.

                  "UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.

                  "United States" and "U.S." shall each mean the United States
of America.

                  "Wholly-Owned Domestic Subsidiary" shall mean, as to any
Person, any Wholly-Owned Subsidiary of such Person that is a Domestic
Subsidiary.

                  "Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock is at the time owned by such Person
and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such Person
and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity
interest at such time.

                  SECTION 9.   Subordination.

                  9.01 Obligations Subordinate to Senior Indebtedness. The
Borrower covenants and agrees, and each Lender and each other holder of any
Convertible Note, if any, likewise covenants and agrees, that, (a) to the extent
and in the manner hereinafter set forth in this Section 9, the payment of the
Obligations, including pursuant to any amendment, modification, restatement or
renewal thereof (the "Subordinated Obligations"), is hereby expressly made
subordinated and subject in right of payment to the prior payment in full of all
Senior Indebtedness and (b) the terms and conditions of such subordination is
for the benefit of the holders of the Senior Indebtedness and each such holder
may enforce such subordination.


                                      -27-
<PAGE>




                  9.02 Payment Over of Proceeds Upon Dissolution. In the event
of (i) any insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding in connection
therewith, relative to the Borrower or to its assets, or (ii) any liquidation,
dissolution or other winding up of the Borrower, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or (iii) any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Borrower (collectively, "Bankruptcy Events"), then and in any
such event:

the holders of Senior Indebtedness shall be entitled to receive payment in full
in cash of all amounts due or to become due on or in respect of all Senior
Indebtedness (including interest after the commencement of a Bankruptcy Event at
the rate specified in the Senior Indebtedness, whether or not allowed), before
any Lender is entitled to receive any direct or indirect payment or distribution
on account of Subordinated Obligations including, without limitation, by
exercise of set-off and any payment which may be payable or deliverable by
reason of any other Indebtedness being subordinated in right of payment to the
Subordinated Obligations;

any payment or distribution of assets of the Borrower of any kind or character,
whether in cash, property or securities (including, without limitation,
securities of the Borrower or any successor), by set-off or otherwise, to which
any Lender would be entitled on account of the Subordinated Obligations but for
the provisions of this Section 9 or 2.02, including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of the Borrower being subordinated to the payment of
Subordinated Obligations (except for any such payment or distribution (1)
authorized by an unstayed, final, nonappealable order or decree stating that
effect is being given to the subordination of such Subordinated Obligations to
the Senior Indebtedness, and made by a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy law or (2) of
securities which, if debt securities, are subordinated to at least the same
extent as the Subordinated Obligations are to (A) such Senior Indebtedness or
(B) any securities issued in exchange for Senior Indebtedness; provided,
however, that (x) the final maturity of such securities shall not be earlier
than one year following the maturity date of the last to mature of the Senior
Indebtedness (including any securities issued in exchange therefor) at the time
outstanding and the scheduled amortization thereof shall not be more favorable
(as to amount or time of payment) than the scheduled amortization of the
principal amount of the Subordinated Obligations, (y) such securities shall
contain covenants which are no more restrictive than the covenants contained
herein and shall not contain greater defaults than as are contained herein, and
(z) such securities shall bear interest at a rate per annum less than or equal
to 14% per annum computed on the same basis as described herein) 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 otherwise, directly to the holders of all Senior Indebtedness 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, ratably according to the aggregate amounts remaining
unpaid on account of such Senior Indebtedness held or represented by each, to
the extent necessary to make payment in full of all such Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or distribution
to the holders of such Senior Indebtedness; and


                                      -28-
<PAGE>




in the event that, notwithstanding the foregoing provisions of this Section 9,
any Lender shall have received any such payment or distribution of assets of the
Borrower of any kind or character on account of the Subordinated Obligations,
whether, property or securities (including, without limitation, securities of
the Borrower or any successor thereto), including any such payment or
distribution which may be payable or deliverable by reason of the payment of any
other Indebtedness of the Borrower being subordinated to the payment of the
Subordinated Obligations (but excluding any payment of the character described
in the parenthetical clause in the foregoing paragraph (b)) before all Senior
Indebtedness is paid in full, then and in such event such payment or
distribution shall be paid over or delivered, in accordance with Section 9.10
hereof, forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other Person making payment or distribution of
assets of the Borrower for application to the payment of all such Senior
Indebtedness remaining unpaid, to the extent necessary to pay such Senior
Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.

                  If, notwithstanding the provisions of this Agreement, there
shall occur any consolidation of the Borrower with, or any merger of the
Borrower into, another corporation or the liquidation or dissolution of the
Borrower following any conveyance, transfer or lease of its properties and
assets substantially as an entirety to another corporation, such consolidation,
merger or liquidation shall not be deemed a Bankruptcy Event; provided, that no
other Bankruptcy Event shall have occurred and be continuing at the time of such
consolidation, merger or liquidation. The Bank is hereby authorized to file an
appropriate claim on behalf of the Lenders if the Lenders do not file such claim
or there is not filed on behalf of the Lenders a proper proof of claim in the
form required in any Bankruptcy Event prior to thirty (30) days before the
expiration of the time to file such claim or claims.

                  9.03 No Payment in Certain Circumstances. In the event that
(i) the Borrower shall fail to pay when due (after giving effect to any
applicable grace periods), upon acceleration or otherwise, any amount or
obligation with respect to Senior Indebtedness under the Credit Agreement (a
"Payment Default") which Payment Default shall not have been cured or waived in
writing, or (ii) an event of default (other than a Payment Default) under the
Credit Agreement shall occur and be continuing, which shall not have been cured
or waived in writing (a "Non-Payment Default"), and the Borrower and each Lender
receive written notice of such Non-Payment Default from either the Bank or the
holders of at least a majority in aggregate principal amount of the Senior
Indebtedness under the Credit Agreement at the time outstanding (a "Non-Payment
Blockage Notice"), then no payment on account of the Subordinated Obligations
shall be made by the Borrower or otherwise on account of the Subordinated
Obligations (x) in the case of any Payment Default, unless and until such Senior
Indebtedness shall have been paid in full or until such Payment Default shall
have been cured or waived in writing, or (y) in the case of any Non-Payment
Default, from the date on which the Borrower and each Lender receive such
Non-Payment Blockage Notice until the earlier of (1) 179 days after such date
and (2) the date, if any, on which the Senior Indebtedness under the Credit
Agreement is paid in full or such Non-Payment Default is waived by the holders
of such Senior Indebtedness under the Credit Agreement or otherwise cured (a
"Non-Payment Blockage Period"); provided, that (x) only one


                                      -29-
<PAGE>


Non-Payment Blockage Notice may be given in any 360-day period, (y) no
Non-Payment Default or event which, with the giving of notice and/or lapse of
time, would become a Non-Payment Default which, in either case, existed or was
continuing on the date of the commencement of any Non-Payment Blockage Period
shall be, or be made, the basis for the commencement of a subsequent Non-Payment
Blockage Period unless such Non-Payment Default or event, as the case may be,
shall in the interim have been cured or waived in writing for period of not less
than 90 consecutive days and (z) there must be a 181 consecutive day period in
any 360 consecutive day period during which no Non-Payment Blockage Period is in
effect.

                  In the event that, notwithstanding the foregoing, any Lender
shall have received any payment or distribution on account of the Subordinated
Obligations contrary to the foregoing provisions of this Section 9.03, then and
in such event such payment shall be paid over and delivered forthwith to the
holders (or their agent or trustee) of the relevant Senior Indebtedness in
accordance with Section 9.10 hereof. The provisions of this Section 9.03 shall
not apply to any payment with respect to which Section 9.02 would be applicable.

                  9.04 Acceleration Rights; Remedies. If an Event of Default,
other than an Event of Default under Section 7.04, shall exist at any time that
any Senior Indebtedness under the Credit Agreement shall be outstanding or there
shall exist any obligation of the Bank to make any loan or advance thereunder,
no Lender nor any other holder of the Notes shall take any action, judicial or
otherwise, to accelerate or collect payment on the Subordinated Obligations or
to pursue any other remedy with respect to the Subordinated Obligations
(including, without limitation, commencing or joining with any other creditor of
the Borrower in commencing any proceeding in bankruptcy) prior to the earlier of
(i) the expiration of 30 calendar days immediately following the receipt by the
Bank of notice of the occurrence of such Event of Default from the Required
Lenders or from the holder or holders entitled to accelerate payments on the
Subordinated Obligations or (ii) acceleration of the Senior Indebtedness under
the Credit Agreement, but such action may only be taken if at the end of such
period such Event of Default has not been cured or waived; provided, that any
amount received by any of the Lenders as a result of any acceleration permitted
above prior to payment in full in cash of the Senior Indebtedness under the
Credit Agreement shall be paid to the Bank in accordance with the provisions of
this Section 9.

                  9.05 Payment Otherwise Permitted. Nothing contained in this
Section 9 or elsewhere in this Agreement or in the Notes shall prevent the
Borrower, at any time except as set forth in Section 2.02 or 9.02 or under the
conditions described in Section 9.03, from making payments at any time of
principal of and interest on the Loans or any other amount payable by the
Borrower under the Notes or this Agreement. Notwithstanding the provisions of
this Section 9, no Lender shall be charged with knowledge of the existence of
any facts, including of the occurrence of a Payment Default, which would
prohibit the making of any payment or distribution by the Borrower or of any
other payment on account of the Subordinated Obligations or the receipt or
retention thereof by any Lender, or the taking of any action by any Lender of
the type referred to in Section 9.04, unless such Lender shall have received at
least two Business Day's prior written notice of such facts.


                                      -30-
<PAGE>




                  9.06 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to, and solely Closing following, the final payment in full of all
Senior Indebtedness, the Lenders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to such Senior Indebtedness to the extent of
the payments or distributions made to the Bank, or otherwise applied to payment
of, the Senior Indebtedness pursuant to the provisions of this Section 9 until
the principal of and interest on the Loans and the Notes shall be paid in full
in cash. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Lenders would be entitled except for the provisions of this Section 9, and no
payments over pursuant to the provisions of this Section 9 to the holders of
Senior Indebtedness by the Lenders shall, as among the Borrower, its creditors
(other than holders of Senior Indebtedness) and the Lenders, be deemed to be a
payment or distribution by the Borrower to or on account of the Senior
Indebtedness.

                  9.07 Provisions Solely to Define Relative Rights. The
provisions of this Section 9 and Section 2.02 are and are intended solely for
the purpose of defining the relative rights of the holders of the Notes on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Section 9 or elsewhere in this Agreement or in the Notes is
intended to or shall (i) impair, as among the Borrower, its creditors (other
than holders of Senior Indebtedness) and the Lenders, the obligation of the
Borrower, which is absolute and unconditional, to pay to the Lenders the
principal of, and premium and interest on, and any other amount payable by the
Borrower under, the Loans, the Notes or this Agreement as and when the same
shall become due and payable in accordance with its terms; or (ii) affect the
relative rights against the Borrower of the Lenders and its creditors (other
than the holders of Senior Indebtedness); or (iii) prevent the Lenders from
accelerating the Loans and exercising all other remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if any,
under this Section 9 of the holders of Senior Indebtedness (x) upon the
occurrence of a Bankruptcy Event, to receive, pursuant to and in accordance with
Section 9.02, cash, property and securities otherwise payable or deliverable to
the Lenders, (y) under the conditions specified in Section 9.03, to prevent any
payment prohibited by such Section or (z) under Section 9.04.

                  9.08 No Waiver of Subordination Provisions; Amendment. No
right of any present or future holder of any Senior Indebtedness to enforce
subordination as provided herein shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Borrower or by any act
or failure to act, in good faith, by any such holder, or by any non-compliance
by the Borrower with the terms, provisions, and covenants of this Agreement,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with. Without in any way limiting the generality of the foregoing, the
holders of Senior Indebtedness may at any time and from time to time, without
the consent of or notice to the Lenders or any other holder of the Notes,
without incurring responsibility to the Lenders or such holders and without
impairing or releasing the subordination provided in this Section 9 or the
obligations hereunder of the Lenders and such holders to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; (iv) exercise or refrain from exercising any rights
against the Borrower and any other Person or any security therefor; and (v) take
or refrain from taking any other action whether similar or dissimilar to the
foregoing.


                                      -31-
<PAGE>




                  9.09 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Borrower or any other
payment on account of the Subordinated Obligations referred to in this Section
9, the Lenders shall be entitled to rely upon any unstayed, final, nonappealable
order or decree entered by any court of competent jurisdiction in which a
Bankruptcy Event is pending, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of Senior
Indebtedness of the Borrower, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Section 9.

                  9.10 Turnover; Miscellaneous Subordination Provisions. (a) If
a payment or distribution is made to any holder of Subordinated Obligations that
because of this Section 9 or Section 2.02 should not have been made to it, such
holder shall segregate such payment or distribution from its other funds and
property and hold it in trust for the benefit of, and, upon written request, pay
it over (in the same form as received, with any necessary endorsement) to, the
holders of Senior Indebtedness as their interests may appear, or the Bank or
other agent or representative or the trustee under the Credit Agreement,
indenture or other agreement (if any) pursuant to which Senior Indebtedness may
have been incurred or issued, as their respective interests may appear, for
application (in the case of cash) to, or as collateral (in the case of non-cash
property or securities) for the payment or prepayment of, all obligations with
respect to Senior Indebtedness remaining unpaid to the extent necessary to pay
such obligations in full in accordance with their terms, after giving effect to
an concurrent payment or distribution to or for the holders of Senior
Indebtedness.

                  (b) A distribution may consist of cash, securities or other
         property, by set-off or otherwise, and a payment or distribution on
         account of any obligations with respect to the holders of Subordinated
         Obligations shall include any redemption, purchase or other acquisition
         of the Subordinated Obligations.

                  (c) For the purpose of this Section 9 and Section 2.02, all
         Senior Indebtedness now or hereafter existing shall not be deemed to
         have been paid in full unless the holders or owners thereof shall have
         received payment in full in cash.

                  (d) The agreements contained in this Section 9 and Section
         2.02 shall continue to be effective or be reinstated, as the case may
         be, if at any time any payment of any of the Senior Indebtedness is
         rescinded or must otherwise be returned by any holder of Senior
         Indebtedness upon any Bankruptcy Event of the Borrower, all as though
         such payment had not been made.

                  (e) All rights and interests under this Agreement of the
         holders of Senior Indebtedness, and all agreements and obligations of
         the holders of Subordinated Obligations and the Borrower under this
         Section 9 and Section 2.02, shall remain in full force and effect
         irrespective of (i) any lack of validity or enforceability of the
         Credit Agreement, any promissory notes evidencing the Indebtedness
         thereunder, or any other agreement or instrument relating thereto or to
         any other Senior Indebtedness, including, without limitation, any
         agreement referred to in the definition of Credit Agreement, or (ii)
         any other circumstance that might otherwise constitute a defense
         available to, or a discharge of, any holders of Subordinated
         Obligations or the Borrower.


                                      -32-
<PAGE>



                  (f) The provisions set forth in this Section 9 and Section
         2.02 constitute a continuing agreement and shall (i) be and remain in
         full force and effect until payment in full of all Senior Indebtedness
         at such time when the Bank shall have no obligation to make advances
         under the Credit Agreement, (ii) be binding upon the holders of
         Subordinated Obligations, the Borrower and their respective successors,
         transferees and assigns, and (iii) inure to the benefit of, and be
         enforceable directly by, each of the holders of Senior Indebtedness and
         their respective successors, transferees and assigns.

                  (g) No waiver of the rights of the holders of the Senior
         Indebtedness hereunder shall be deemed made unless the same shall be in
         writing, duly signed by an authorized officer of such holder, and each
         waiver, if any, shall apply only to the specific instance involved and
         shall in no way impair the rights of such holder, or the obligations of
         the Lenders, in any other respect at any other time.

                  SECTION 10.   Miscellaneous.

                  10.01 Payment of Expenses, Etc. The Borrower agrees to: (i)
pay all reasonable out-of-pocket costs and expenses of Lender not to exceed
[$________] (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) in connection with the review, preparation,
execution and delivery of this Agreement and the other Transaction Documents and
the documents and instruments referred to herein and therein and any amendment,
waiver, public filing or consent relating hereto or thereto, and of each of the
Lenders in connection with the enforcement of this Agreement and the other Loan
Documents and the documents and instruments referred to herein and therein
(including, without limitation, the reasonable fees and disbursements of counsel
for each of the Lenders); (ii) pay and hold each of the Lenders harmless from
and against any and all present and future stamp, excise and other similar taxes
with respect to the foregoing matters and save each of the Lenders harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iii) defend, protect, indemnify and hold harmless each Lender and
each of its officers, directors, employees, representatives, attorneys, agents,
Affiliates, any other Person in control of any Lender or its affiliates
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages (including foreseeable and unforeseeable consequential damages and
punitive damages), penalties, claims, actions, judgments, suits, proceedings,
costs, expenses and disbursements (including reasonable attorneys' and
consultants fees and disbursements) of any kind or nature whatsoever that may at
any time be incurred by, imposed on or assessed against the Indemnitees directly
or indirectly based on, or arising or resulting from, or in any way related to,
or by reason of (a) any investigation, litigation or other proceeding (whether
or not any Lender is a party thereto and whether or not any such investigation,
litigation or other proceeding is between or among any Lender, the Borrower or
any of its Subsidiaries, or any third Person or otherwise) related to the


                                      -33-
<PAGE>


entering into and/or performance of this Agreement or any other Document or the
proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Document or the exercise of any of their rights or remedies provided
herein or in the other Loan Documents; or (b) the actual or alleged generation,
presence or Release of Hazardous Materials on or from, or the transportation of
Hazardous Materials to or from, any Real Property owned or at any time operated
by the Borrower or any of its Subsidiaries; or (c) any Environmental Claim
relating to the Borrower, any of its Subsidiaries or any Real Property owned or
at any time operated by the Borrower or any of its Subsidiaries; or (d) the
exercise of the rights of any Lender under any of the provisions of this
Agreement, any other Loan Document or any Loans hereunder; or (e) the
consummation of any transaction contemplated herein (including, without
limitation, the Transaction) or in any other Loan Document (the "Indemnified
Matters") regardless of when such Indemnified Matter arises, but excluding any
such Indemnified Matter based solely on the gross negligence or willful
misconduct of any Indemnitee.

                  10.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
an Event of Default, each Lender is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to the
Borrower or any of its Subsidiaries or to any other Person, any such notice
being hereby expressly waived, but in any event subject to Section 9, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Borrower or any of its Subsidiaries against and
on account of the Subordinated Obligations and liabilities of the Borrower or
any of its Subsidiaries to such Lender under this Agreement or under any of the
other Loan Documents, including, without limitation, all interests in
Subordinated Obligations purchased by such Lender pursuant to Section 10.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Loan Document, irrespective of whether or not
such Lender shall have made any demand hereunder and although said Subordinated
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. The Lenders hereby agree to provide notice to the Borrower and the
Bank of any action taken pursuant to this Section 10.02; provided, that the
failure to give such notice shall not affect any action taken by such Lender
pursuant to this Section 10.02.

                  10.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
its address specified opposite its signature below; if to any Lender, at its
address specified opposite its name below; if to the Bank, to the address
specified in the Credit Agreement; or, as to the Borrower or any Lender, at such
other address as shall be designated by such party in a written notice to the
other parties hereto and the Bank; and, as to the Bank, at such other address as
shall be designated by the Bank in a written notice to the Borrower and each
Lender. All such notices and communications shall, when mailed, telegraphed,
telexed, facsimile, or cabled or sent by overnight courier, be Closing three
Business Days after deposited in the mails, certified, return receipt requested,
when delivered to the telegraph company or cable company or one Business Day
following delivery to an overnight courier, as the case may be, or when sent by
telex or facsimile device, except that notices and communications to a Lender or
the Bank shall not be Closing until received by such Lender or the Bank.


                                      -34-
<PAGE>




                  10.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, that no Loan
Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Loan Document without the prior written consent of
all Lenders; and provided, further, that although any Lender may transfer,
assign or grant participations in its rights hereunder, such Lender shall remain
a "Lender" for all purposes hereunder (and may not transfer or assign all or any
portion of its Loans hereunder except as provided in Section 10.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder; and provided, further, that no Lender shall transfer or
grant any participation (x) to any competitor of the Borrower or any of its
Subsidiaries or (y) under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Loan Document except to
the extent such amendment or waiver would: (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest (except in connection
with a waiver of applicability of any post-default increase in interest rates)
or reduce the principal amount thereof over the amount thereof then in effect
(it being understood that waivers of any Defaults or Events of Default or of a
mandatory repayment shall not constitute a change in the terms of such
participation), or (ii) consent to the assignment or transfer by or a release of
the Borrower or any Subordinated Guarantor of any of its rights and obligations
under this Agreement or any other Loan Document other than, in the case of any
Subordinated Guaranty, as otherwise provided therein. In the case of any such
permitted participation, the participant shall not have any rights under this
Agreement or any of the other Loan Documents (the participant's rights against
such Lender in respect of such participation to be those set forth in the
agreement executed by such Lender in favor of the participant relating thereto)
and all amounts payable by any Loan Party hereunder and thereunder shall be
determined as if such Lender had not sold such participation.

                  (b) Notwithstanding the foregoing, any Lender (or any Lender
together with one or more other Lenders) may assign all or a portion of its
outstanding principal amount of Loans to one or more Eligible Transferees or to
a Related Fund each of which assignees shall become a party to this Agreement as
a Lender by execution of an assignment and assumption agreement substantially in
the form of Exhibit I (appropriately completed); provided that: (i) at such time
Schedule I shall be deemed modified to reflect the outstanding Loans of such new
Lender and of the existing Lenders; (ii) new Convertible Notes will be issued,
at the Borrower's expense, to such new Lender and to the assigning Lender upon
the request of such new Lender or assigning Lender, such new Convertible Notes
to be in conformity with the requirements of Section 1.04 (with appropriate
modifications) to the extent needed to reflect the revised outstanding Loans;
and (iii) notice that such new Lender has become a Lender hereunder is provided
to the Bank and the Borrower in accordance with Section 10.03. At the time of
each assignment pursuant to this Section 10.04(b) to a Person which is not
already a Lender hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall provide to the Borrower the appropriate
Internal Revenue Service Forms (and, if applicable, a Section 2.04(b)(ii)
Certificate) required by Section 2.04(b).


                                      -35-
<PAGE>




                  (c) Notwithstanding the foregoing provisions of this Section
10.04, transfer of the Convertible Notes is subject to a Stockholders Agreement
among the Lenders dated this date.

                  10.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of any Lender or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Loan Document and no course of dealing
between the Borrower or any of its Subsidiaries and any Lender or the holder of
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Loan
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Loan Document expressly provided are cumulative
and not exclusive of any rights, powers or remedies which any Lender or the
holder of any Note would otherwise have. No notice to or demand on the Borrower
or any of its Subsidiaries in any case shall entitle any such Person to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any Lender or the holder of any Note to any
other or further action in any circumstances without notice or demand.

                  10.06 Payments Pro Rata. Each of the Lenders agrees that, if
it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents, or otherwise), which is applicable to the payment of the
principal of, or interest on, the Loans, of a sum which with respect to the
related sum or sums received by other Lenders is in a greater proportion than
the total of such Subordinated Obligations then owed and due to such Lender
bears to the total of such Subordinated Obligations then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Subordinated Obligations to such other Lenders
in such amount as shall result in a proportional participation by all the
Lenders in such amount; provided, that if all or any portion of such excess
amount is thereafter recovered from such purchasing Lender, such purchase shall
be rescinded and the purchase price restored to the extent of such recovery, but
without interest.

                  10.07 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER HEREBY IRREVOCABLY DESIGNATES, ACCEPTS AND EMPOWERS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. BORROWER HEREBY FURTHER


                                       -36-
<PAGE>


IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER THE
BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY LOAN DOCUMENT BROUGHT IN ANY OF THE
AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER THE BORROWER. THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER
AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME
EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER 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 LOAN DOCUMENT THAT SERVICE OF PROCESS IN THE MANNER DESCRIBED ABOVE
WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY PARTY IN ANY OTHER JURISDICTION.

                  (b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID
ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.

EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.

                  10.08 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be maintained by the
Borrower and the Lenders.

                  10.09 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.


                                      -37-
<PAGE>




                  10.10 Amendment or Waiver. The Agreement and the Convertible
Notes may be amended or supplemented upon receipt of the consent of the holders
of a majority of the aggregate principal amount of the Convertible Notes then
outstanding, and any existing Default or compliance with any provision may be
waived (other than a continuing Default or Event of Default in the payment of
principal or interest on any Convertible Note) with the consent of the holders
of a majority of the aggregate principal amount of the then outstanding
Convertible Notes. Without the consent of each holder affected, an amendment may
not (i) reduce the percentage of principal amount of the Convertible Notes,
whose holders must consent to an amendment, supplement or waiver, (ii) change
the stated maturity or the time or currency of payment of the principal of or
any interest on, or reduce the rate of interest on or principal of payable on
any Convertible Notes, (iii) make any change in the subordination provisions of
the Convertible Notes, (iv) impair the right of any holder to institute suit for
the enforcement of any payment on or with respect to such holder's Convertible
Notes, (v) waive a default in the payment of the principal of or interest on any
Convertible Notes, (vi) make any change to the conversion provisions of the
Convertible Notes regarding the control of the exercise of remedies or the right
of a holder on the Convertible Notes to bring suit against the Company if the
Company fails to make payment on the Convertible Notes, or (vii) make any
changes in the provision of the Convertible Notes containing the terms described
in this paragraph. Notwithstanding the foregoing, without the consent of any
holder of the Convertible Notes, the Convertible Notes may be amended or
supplemented by the Company to cure any ambiguity, defect or inconsistency, and
to make any change that does not, adversely affect the rights of any holder of
the Convertible Notes. The Borrower and the Lenders hereby agree for the benefit
of the holders of Senior Indebtedness that no amendment of, supplement of,
modification to or waiver under any provision of this Agreement or any Notes
will be entered into or effected (x) with respect to Section 2.02 or 9 or (y)
with respect to any other provisions, if the same would be adverse in any
material respect to the holders of Senior Indebtedness (or any of them), without
the prior consent of the Bank under the Credit Agreement.

                  10.11 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.04 and 10.01 shall survive the execution and
delivery of this Agreement and the Notes and the making and repayment of the
Loans.

                  10.12 Domicile of Loans. Each Lender may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Lender.


                                      -38-
<PAGE>


                  IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.


<TABLE>
<CAPTION>
Address
<S>                                                   <C>

80 Wesley Street                                       CD& L, INC.
S. Hackensack, New Jersey  07606
Attention:  Mr. Albert W. Van Ness, Jr.                By:___________________________________
Telephone:  (201) 487-7740                                Albert W. Van Ness, Jr., Chief Executive Officer
Facsimile:    (201) 489-6974


787 Seventh Avenue                                     BNP PARIBAS
New York, New York  10019
Attention:  Jeffrey Youle
                                                       By:___________________________________
Telephone: (212) 841-2000                                 Title:
Facsimile: (212) 841-355
                                                       By:___________________________________
                                                          Title:


10 East 53rd Street, 32nd Floor                        EXETER VENTURE LENDERS L.P.
New York, New York  10022
Attention:  Keith R. Fox                               By: EXETER VENTURE ADVISORS, INC.,
                                                           as its general partner
Telephone:  (212) 872-1172
Facsimile:    (212) 872-1198                           By:___________________________________
                                                          Title: Vice President


10 East 53rd Street, 32nd Floor                        EXETER CAPITAL PARTNERS IV, L.P.
New York, New York  10022
Attention:  Keith R. Fox                               By:    EXETER IV ADVISORS, L.P.,
                                                              as its general partner
Telephone:  (212) 872-1172
Facsimile:    (212) 872-1198                           By:    EXETER IV ADVISORS, INC.,
                                                              as its general partner

                                                       By:___________________________________
                                                          Title: Vice President


</TABLE>


                        [Signatures of Investors follow]



                                      -39-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27.(A)
<SEQUENCE>7
<FILENAME>b331333_ex10-27a.txt
<DESCRIPTION>AMENDED AND RESTATED NOTE
<TEXT>
<PAGE>

                                                                Exhibit 10.27(A)


                           "The securities represented by this Note have not
                  been registered under the Securities Act of 1933, as amended
                  (the "Securities Act"), and such 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."



                            AMENDED AND RESTATED NOTE
                            -------------------------


$[__________]                                                 New York, New York

                                                                  April 14, 2004




FOR VALUE RECEIVED, CD&L, INC., a Delaware corporation (the "Borrower" or the
"Company"), hereby promises to pay to ________________ or its registered assigns
(the "Lender" or "Holder"), in lawful money of the United States of America in
immediately available funds, at the office of the Lender located at
[_______________________] on the Maturity Date (as defined in the Amended Loan
Agreement referred to below) the principal amount of _______________ DOLLARS
($_________) or, if less, the then unpaid principal amount of all Loans (as
defined in the Amended Loan Agreement) made by the Lender pursuant to the
Amended Loan Agreement.

                  The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.05 of the Amended Loan
Agreement referred to below.

                  This Amended and Restated Note is one of the Amended and
Restated Notes referred to in the Amended and Restated Senior Subordinated Loan
Agreement, dated as of January 29, 1999 and amended and restated as of April 14,
2004, among the Company and the other parties thereto, including the Lender (as
amended, modified and/or supplemented from time to time, the "Amended Loan
Agreement") and is entitled to the benefits thereof. This Amended and Restated
Note is also entitled to the benefit of the Subordinated Guaranty (as defined in
the Amended Loan Agreement). As provided in the Amended Loan Agreement, this
Amended and Restated Note is subject to voluntary prepayment and mandatory
repayment prior to the Maturity Date, in whole or in part. This Amended and
Restated Note is subordinated to the "Senior Indebtedness" as defined in the
Amended Loan Agreement and the Borrower agrees, and the Lender agrees by
accepting this Amended and Restated Note, to the subordination provided in the
Amended Loan Agreement.



<PAGE>




                  In case an Event of Default (as defined in the Amended Loan
Agreement) shall occur and be continuing, the principal of and accrued interest
on this Amended and Restated Note may be declared to be due and payable in the
manner and with the effect provided in the Amended Loan Agreement.

                  This Amended and Restated Note may be amended only in
accordance with the provisions of Section 10.10 of the Amended Loan Agreement.

                  The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Amended and Restated Note.

1.0      AMENDMENT
         ---------

                  1.1 This Amended and Restated Note is being issued in exchange
for and replacement of a certain note or notes of the Company issued on January
29, 1999, in the original principal amount of $15,000,000 pursuant to the Senior
Subordinated Loan Agreement dated January 29, 1999 (the "Original Note"). Upon
receipt of this Amended and Restated Note by the registered Holder, the Original
Note shall be deemed canceled and null and void in its entirety. The Holder, by
acceptance of this Amended and Restated Note, represents and warrants that it
has not sold, transferred or assigned the Original Note to any party, and agrees
to return the Original Note to the Company promptly.

2.0      CONVERSION PRIVILEGE/OBLIGATION
         -------------------------------

                  2.1 Conversion Right. The Company hereby grants to the Holder
of this Amended and Restated Note the right to convert all, or a portion (in
principal amounts equal to or greater than $50,000), of the principal amount of
this Amended and Restated Note into fully paid and non-assessable shares of the
Company's Common Stock, $.001 par value (the "Common Stock"), at the "Conversion
Price" per share. The number of shares of Common Stock that the Holder is
entitled to receive upon conversion of all or part of this Amended and Restated
Note shall be referred to as the Conversion Shares. The "Conversion Price" will
equal $1.02, which is one time the average of the closing prices of a share of
the Company's Common Stock on the American Stock Exchange ("AMEX") for each of
the last five (5) trading days ending on and including the last trading day
immediately prior to the date hereof. The number of shares of Common Stock into
which this Amended and Restated Note may be converted shall be determined by
taking (a) the sum of (1) the principal amount of this Amended and Restated Note
to be converted, and (2) any interest due and unpaid thereon from the date of
issue to the date of conversion, and dividing such amount by (b) the Conversion
Price, which Conversion Price is subject to adjustment as provided in Section
2.8 below. The amount and kind of securities purchasable pursuant to the rights
granted hereby and the purchase price for such securities are subject to
adjustment as provided hereunder.

                  2.2 Change in Control. The Holder of this Amended and Restated
Note shall have the right to automatically convert such Amended and Restated
Note into shares of Common Stock in accordance with the formula described above
simultaneously with the occurrence of, but deemed to occur immediately prior to,
a Change in Control of the Company. For purposes of this Amended and Restated
Note, a "Change in Control" shall be deemed to have occurred if any of the
following events occur:



                                      -2-
<PAGE>




                  (a) 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

                  (b) 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

                  (c) an approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or

                  (d) any action pursuant to which any person (as such term is
defined in Section 13(d) of the Securities Exchange Act of 1934), 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 Securities Exchange Act of 1934),
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 Company's Board of Directors shall
determine that such person so becoming such beneficial owner shall not
constitute a Change in Control; or

                  (e) the individuals (A) who, as of the date hereof (including
the nominees of the holders of the Company's Series A Convertible Redeemable
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.

                  2.3 Whole Shares. Upon conversion, only whole shares shall be
issued. Any remainder due hereunder which is insufficient to purchase a whole
share of Common Stock shall be paid by the Company in cash. If the Company
elects not to, or is unable to, make such a cash payment, the Holder shall be
entitled to receive, in lieu of a fraction of a share, one whole share of Common
Stock.




                                      -3-
<PAGE>



                  2.4 Exercise Procedure. (a) Subject to the automatic
conversion right set forth in Section 2.2, the conversion privilege shall be
deemed to have been exercised (the "Exercise Time") (x) in the case of automatic
conversion pursuant to Section 2.2, simultaneously with the occurrence of, but
deemed to occur immediately prior to, a Change of Control of the Company (and
the Holder shall deliver within a reasonable time thereafter the documents
listed in (i) through (iii) below) and (y) in all other cases, when the Company
shall have received from the Holder all of the following:

                  (i) a properly completed Exercise Agreement in form annexed
         hereto executed by the person exercising such conversion privilege; and

                  (ii) this Amended and Restated Note; and

                  (iii) if the payee of this Amended and Restated Note is not
         the person exercising such conversion privilege, an assignment or
         assignments as described in Section 2.6 hereof evidencing an assignment
         of such Amended and Restated Note to the person exercising the same.

                  (b) Certificates for the underlying shares acquired, together
         with a new Amended and Restated Note for such remaining principal
         balance with the same terms as this Amended and Restated Note shall be
         delivered to the Holder within 20 days after the Exercise Time (or the
         date of delivery of the Amended and Restated Note to the Company, if
         later).

                  2.5 Exercise Agreement. The Exercise Agreement shall be in the
form set forth at the end of this Amended and Restated Note. If the Conversion
Shares are not to be issued in the name of the payee on the Amended and Restated
Note, such agreement shall also state the name of the persons to whom the
certificates for the Conversion Shares are to be issued. Such Exercise Agreement
shall be dated the actual date of execution thereof.

                  2.6 Assignment. The Assignment shall be in the form set forth
at the end of this Amended and Restated Note and shall provide that the person
executing the same thereby sells, assigns and transfers to the person(s) named
therein the rights evidenced by this Amended and Restated Note to purchase the
number of the Conversion Shares stated therein. Such Assignment shall be dated
the actual date of execution thereof.

                  2.7      Authorization and Issuance of Conversion Shares.
The Company covenants and agrees that:

                  (a) The Conversion Shares issuable upon any exercise of the
conversion privilege shall be deemed to have been issued to the person
exercising such privilege at the Exercise Time, and the person exercising such
privilege shall be deemed for all purposes to have become the record holder of
such Conversion Shares at the Exercise Time.

                  (b) All Conversion Shares which may be issued upon any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.



                                      -4-
<PAGE>




                  (c) The Company will take all such action as may be necessary
and reasonably within its powers to assure that all underlying shares issuable
upon exercise may be issued without violation of any applicable law or
regulation. The Company will not take any action which would result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the conversion privilege in full, together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of Common Shares then authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of certificates for the Conversion Shares
upon exercise of the conversion privilege shall be made without charge to the
Holder for any issuance tax in respect thereof or other costs incurred by the
Company in connection with the exercise and the related issuance of the
underlying shares.

                  2.8 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a) Whenever after the date hereof the Company shall (i)
declare and pay a dividend to the holders of its shares of Common Stock in
shares of its Common Stock, or in other securities immediately convertible into
shares of Common Stock, (ii) split the outstanding shares of its Common Stock
into a greater number of outstanding shares of Common Stock, or (iii) combine
the outstanding shares of its Common Stock into a smaller number of outstanding
shares of Common Stock, the maximum number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Amended and Restated Note shall thereafter be entitled to receive upon
conversion that number of shares of Common Stock which he or she would have held
had the initial indebtedness of this Amended and Restated Note been converted
immediately prior to the effective date of such action and had that action been
effectuated with respect to those converted shares. In any such event the
Conversion Price will be altered accordingly so that any conversion taking place
after any event described in (i), (ii) and/or (iii) above may be accomplished at
the same cost that would have obtained had the share been converted immediately
prior to such action. For purposes of this subparagraph (a), the effective date
for any stock dividend, split or combination referred to in clause (i) above
shall be deemed to be the record date fixed for the determination of the holders
of Common Stock entitled to receive such dividend.

                  (b) In the case after the date hereof of any capital
reorganization or any reclassification of the capital stock of the Company or in
case of the consolidation of the Company with or merger of the Company into
another corporation or the conveyance of all or substantially all of the
properties and assets of the Company to another corporation, adequate provision
shall be made whereby this Amended and Restated Note shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the Company
deliverable upon conversion of this Amended and Restated Note immediately prior
to such reorganization, reclassification, consolidation, merger or conveyance
would have been entitled upon consummation of such reorganization,
reclassification, consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the board of directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interests of the holder of this Amended and Restated Note to the end that
such provisions (including, without limitation, the provisions with respect to
changes in and other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, to the shares of stock or other
securities or property thereafter deliverable upon the conversion of this
Amended and Restated Note.



                                      -5-
<PAGE>



3.0      RESTRICTIONS ON TRANSFER
         ------------------------

                  3.1 The Holder, by acceptance hereof, acknowledges that he
understands that the Company will rely upon the representations set forth herein
in issuing the Amended and Restated Note and the Conversion Shares, if any,
without registration under the Securities Act of 1933 (as amended, the
"Securities Act"), or any securities law of any State of the United States.

                  3.2 Accordingly, the Holder, by acceptance of the Amended and
Restated Note, represents and warrants that this offering is being made pursuant
to the exemption from registration with the Securities and Exchange Commission
("SEC") afforded by Sections 3(b) and/or 4(2) of the Securities Act relating to
transactions by an issuer not involving any public offering. The Holder
understands that the Company has no present intention, and is under no
obligation to, register the Amended and Restated Note or the Conversion Shares
under the Securities Act, or any applicable state law, except as described in
the Registration Rights Agreement dated the date hereof among the Company and
the other parties thereto.

                  3.3 The Holder understands that due to lack of registration,
the Amended and Restated Note and the Conversion Shares will be restricted
securities, that the holder must bear the economic risk of the investment for an
indefinite period, that the Amended and Restated Note and the Conversion Shares
may not be sold, pledged or otherwise disposed of unless they are registered
under the Securities Act and any applicable state securities law, or an
exemption from such laws is available and the Company is supplied with an
opinion of counsel to the Holder, satisfactory to the Company, that registration
is not required under any of such laws, and in the opinion of counsel for the
Company, such sale, transfer, or pledge will not cause the Company to fail to be
in compliance with the exemption provisions under which the Amended and Restated
Note or the Conversion Shares were issued.

                  3.4 The Holder has such knowledge and experience in financial
and business affairs that he is capable of evaluating the merits and risks of
the prospective investment.

                  3.5 The Amended and Restated Note is being, and the Conversion
Shares will be, purchased for the Holder's own account for investment purposes
and not with a view to the resale or distribution thereof by the Holder.

                  3.6 Prior to the date hereof, the Holder has had an
opportunity to ask questions of and receive answers from the officers and
directors of the Company, concerning the Company, the Amended and Restated Note,
and the Company's business and to obtain any additional information which was
considered necessary to verify the information supplied by such parties.


                  3.7 The Holder understands that restrictive legends in
substantially the following form shall be placed on the certificate(s)
representing the Conversion Shares:



                                      -6-
<PAGE>



                  "The shares 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."

                  3.8 Notwithstanding the foregoing legend, the Company will not
require an opinion of counsel if the Conversion Shares may be sold pursuant to
the exemption from registration pursuant to Rule 144 of the Securities Act. In
entering into this transaction, the Holder is not relying upon any information,
other than the results of his own independent investigation.

                  THIS AMENDED AND RESTATED NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                                         CD&L, INC.



                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:

ACCEPTED:


By:
   -----------------------------------
   Name:
   Title:



                                      -7-
<PAGE>


                                   ASSIGNMENT


                  FOR VALUE RECEIVED _________________________________________

______________________________________________________________________________
hereby sells, assigns and transfers all of the rights of the undersigned under
the within Note, with respect to the conversion thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:

<TABLE>
<CAPTION>

    Name of Assignee                       Address                                 Aggregate Principal Amount
    -----------------------------------    ------------------------------------    ---------------------------------------
    <S>                                   <C>                                      <C>





</TABLE>





Date:
     ----------------------
                                    Signature:
                                              ----------------------------------

                                    Witness:
                                              ----------------------------------



<PAGE>

                               EXERCISE AGREEMENT
                               ------------------


                                                           Date: _______________


                  The undersigned, pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the Company's Common Stock as provided in the Note, and
makes payment in full therefore by conversion and application to the extent
necessary to pay the Conversion Price for such shares of such part of the
principal amount of the Note and interest due thereon as shall be necessary as
provided in the Note. The undersigned hereby represents and warrants that the
shares of Common Stock to be acquired upon exercise are being acquired for his
own account, without any present intention of reoffering, reselling or
distribution such Common Stock, except to the extent permitted under the
Securities Act of 1933, as amended. Terms used herein but not otherwise defined
herein shall have the meaning provided such terms in the Amended and Restated
Note of CD&L, Inc., dated April 14, 2004 in the initial principal amount of
_________________ Dollars ($_______), payable to the order of _________________.



                                  Signature:
                                            ------------------------------------

                                  Address:
                                            ------------------------------------

                                            ------------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.27.(B)
<SEQUENCE>8
<FILENAME>b331333_ex10-27b.txt
<DESCRIPTION>AMENDED AND RESTATED NOTE
<TEXT>
<PAGE>

                                                                Exhibit 10.27(B)


                           "The securities represented by this Note have not
                  been registered under the Securities Act of 1933, as amended
                  (the "Securities Act"), and such 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."



                            AMENDED AND RESTATED NOTE
                            -------------------------


$[                               ]                            New York, New York
  -------------------------------
                                                                  April 14, 2004



FOR VALUE RECEIVED, CD&L, INC., a Delaware corporation (the "Borrower" or the
"Company"), hereby promises to pay to [_____________] or its registered assigns
(the "Lender" or "Holder"), in lawful money of the United States of America in
immediately available funds, at the office of the Lender located at
[___________] on the Maturity Date (as defined in the Amended Loan Agreement
referred to below) the principal amount of [___________] DOLLARS $[______] or,
if less, the then unpaid principal amount of all Loans (as defined in the
Amended Loan Agreement) made by the Lender pursuant to the Amended Loan
Agreement.
                  The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.05 of the Amended Loan
Agreement referred to below.

                  This Amended and Restated Note is one of the Amended and
Restated Notes referred to in the Amended and Restated Senior Subordinated Loan
Agreement, dated as of January 29, 1999 and amended and restated as of April 14,
2004, among the Company and the other parties thereto, including the Lender (as
amended, modified and/or supplemented from time to time, the "Amended Loan
Agreement") and is entitled to the benefits thereof. This Amended and Restated
Note is also entitled to the benefit of the Subordinated Guaranty (as defined in
the Amended Loan Agreement). As provided in the Amended Loan Agreement, this
Amended and Restated Note is subject to voluntary prepayment and mandatory
repayment prior to the Maturity Date, in whole or in part. This Amended and
Restated Note is subordinated to the "Senior Indebtedness" as defined in the
Amended Loan Agreement and the Borrower agrees, and the Lender agrees by
accepting this Amended and Restated Note, to the subordination provided in the
Amended Loan Agreement.

                  In case an Event of Default (as defined in the Amended Loan
Agreement) shall occur and be continuing, the principal of and accrued interest
on this Amended and Restated Note may be declared to be due and payable in the
manner and with the effect provided in the Amended Loan Agreement.



<PAGE>




                  This Amended and Restated Note may be amended only in
accordance with the provisions of Section 10.10 of the Amended Loan Agreement.

                  The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Amended and Restated Note.

1.0      AMENDMENT
         ---------

                  1.1 This Amended and Restated Note is being issued in exchange
for and replacement of a certain note or notes of the Company issued on January
29, 1999, in the original principal amount of $15,000,000 pursuant to the Senior
Subordinated Loan Agreement dated January 29, 1999 (the "Original Note"). Upon
receipt of this Amended and Restated Note by the registered Holder, the Original
Note shall be deemed canceled and null and void in its entirety. The Holder, by
acceptance of this Amended and Restated Note, represents and warrants that it
has not sold, transferred or assigned the Original Note to any party, and agrees
to return the Original Note to the Company promptly.

2.0      CONVERSION PRIVILEGE/OBLIGATION
         -------------------------------

                  2.1 Conversion Right. The Company hereby grants to the Holder
of this Amended and Restated Note the right to convert all, or a portion (in
principal amounts equal to or greater than $50,000), of the principal amount of
this Amended and Restated Note into fully paid and non-assessable shares of the
Company's Common Stock, $.001 par value (the "Common Stock"), at the "Conversion
Price" per share. The number of shares of Common Stock that the Holder is
entitled to receive upon conversion of all or part of this Amended and Restated
Note shall be referred to as the Conversion Shares. The "Conversion Price" will
equal $2.04, which is two times the average of the closing prices of a share of
the Company's Common Stock on the American Stock Exchange ("AMEX") for each of
the last five (5) trading days ending on and including the last trading day
immediately prior to the date hereof. The number of shares of Common Stock into
which this Amended and Restated Note may be converted shall be determined by
taking (a) the sum of (1) the principal amount of this Amended and Restated Note
to be converted, and (2) any interest due and unpaid thereon from the date of
issue to the date of conversion, and dividing such amount by (b) the Conversion
Price, which Conversion Price is subject to adjustment as provided in Section
2.8 below. The amount and kind of securities purchasable pursuant to the rights
granted hereby and the purchase price for such securities are subject to
adjustment as provided hereunder.

                  2.2 Change in Control. The Holder of this Amended and Restated
Note shall have the right to automatically convert such Amended and Restated
Note into shares of Common Stock in accordance with the formula described above
simultaneously with the occurrence of, but deemed to occur immediately prior to,
a Change in Control of the Company. For purposes of this Amended and Restated
Note, a "Change in Control" shall be deemed to have occurred if any of the
following events occur:

                                      -2-

<PAGE>




                  (a) 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

                  (b) 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

                  (c) an approval by the stockholders of the Company of any plan
or proposal for the liquidation or dissolution of the Company; or

                  (d) any action pursuant to which any person (as such term is
defined in Section 13(d) of the Securities Exchange Act of 1934), 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 Securities Exchange Act of 1934),
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 Company's Board of Directors shall
determine that such person so becoming such beneficial owner shall not
constitute a Change in Control; or

                  (e) the individuals (A) who, as of the date hereof (including
the nominees of the holders of the Company's Series A Convertible Redeemable
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.

                  2.3 Whole Shares. Upon conversion, only whole shares shall be
issued. Any remainder due hereunder which is insufficient to purchase a whole
share of Common Stock shall be paid by the Company in cash. If the Company
elects not to, or is unable to, make such a cash payment, the Holder shall be
entitled to receive, in lieu of a fraction of a share, one whole share of Common
Stock.

                  2.4 Exercise Procedure. (a) Subject to the automatic
conversion right set forth in Section 2.2, the conversion privilege shall be
deemed to have been exercised (the "Exercise Time") (x) in the case of automatic
conversion pursuant to Section 2.2, simultaneously with the occurrence of, but
deemed to occur immediately prior to, a Change of Control of the Company (and
the Holder shall deliver within a reasonable time thereafter the documents
listed in (i) through (iii) below) and (y) in all other cases, when the Company
shall have received from the Holder all of the following:

                                      -3-


<PAGE>




                  (i) a properly completed Exercise Agreement in form annexed
         hereto executed by the person exercising such conversion privilege; and

                  (ii) this Amended and Restated Note; and

                  (iii) if the payee of this Amended and Restated Note is not
         the person exercising such conversion privilege, an assignment or
         assignments as described in Section 2.6 hereof evidencing an assignment
         of such Amended and Restated Note to the person exercising the same.

                  (b) Certificates for the underlying shares acquired, together
         with a new Amended and Restated Note for such remaining principal
         balance with the same terms as this Amended and Restated Note shall be
         delivered to the Holder within 20 days after the Exercise Time (or the
         date of delivery of the Amended and Restated Note to the Company, if
         later).

                  2.5 Exercise Agreement. The Exercise Agreement shall be in the
form set forth at the end of this Amended and Restated Note. If the Conversion
Shares are not to be issued in the name of the payee on the Amended and Restated
Note, such agreement shall also state the name of the persons to whom the
certificates for the Conversion Shares are to be issued. Such Exercise Agreement
shall be dated the actual date of execution thereof.

                  2.6 Assignment. The Assignment shall be in the form set forth
at the end of this Amended and Restated Note and shall provide that the person
executing the same thereby sells, assigns and transfers to the person(s) named
therein the rights evidenced by this Amended and Restated Note to purchase the
number of the Conversion Shares stated therein. Such Assignment shall be dated
the actual date of execution thereof.

                  2.7      Authorization  and  Issuance of  Conversion  Shares.
The Company covenants and agrees that:

                  (a) The Conversion Shares issuable upon any exercise of the
conversion privilege shall be deemed to have been issued to the person
exercising such privilege at the Exercise Time, and the person exercising such
privilege shall be deemed for all purposes to have become the record holder of
such Conversion Shares at the Exercise Time.

                  (b) All Conversion Shares which may be issued upon any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company will take all such action as may be necessary
and reasonably within its powers to assure that all underlying shares issuable
upon exercise may be issued without violation of any applicable law or
regulation. The Company will not take any action which would result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the conversion privilege in full, together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants, conversion and other rights,
would exceed the total number of Common Shares then authorized by the Company's
Certificate of Incorporation.

                                      -4-


<PAGE>




                  (d) The issuance of certificates for the Conversion Shares
upon exercise of the conversion privilege shall be made without charge to the
Holder for any issuance tax in respect thereof or other costs incurred by the
Company in connection with the exercise and the related issuance of the
underlying shares.

                  2.8 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a) Whenever after the date hereof the Company shall (i)
declare and pay a dividend to the holders of its shares of Common Stock in
shares of its Common Stock, or in other securities immediately convertible into
shares of Common Stock, (ii) split the outstanding shares of its Common Stock
into a greater number of outstanding shares of Common Stock, or (iii) combine
the outstanding shares of its Common Stock into a smaller number of outstanding
shares of Common Stock, the maximum number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Amended and Restated Note shall thereafter be entitled to receive upon
conversion that number of shares of Common Stock which he or she would have held
had the initial indebtedness of this Amended and Restated Note been converted
immediately prior to the effective date of such action and had that action been
effectuated with respect to those converted shares. In any such event the
Conversion Price will be altered accordingly so that any conversion taking place
after any event described in (i), (ii) and/or (iii) above may be accomplished at
the same cost that would have obtained had the share been converted immediately
prior to such action. For purposes of this subparagraph (a), the effective date
for any stock dividend, split or combination referred to in clause (i) above
shall be deemed to be the record date fixed for the determination of the holders
of Common Stock entitled to receive such dividend.

                  (b) In the case after the date hereof of any capital
reorganization or any reclassification of the capital stock of the Company or in
case of the consolidation of the Company with or merger of the Company into
another corporation or the conveyance of all or substantially all of the
properties and assets of the Company to another corporation, adequate provision
shall be made whereby this Amended and Restated Note shall thereafter be
convertible into the number of shares of stock or other securities or property
to which a holder of the number of shares of Common Stock of the Company
deliverable upon conversion of this Amended and Restated Note immediately prior
to such reorganization, reclassification, consolidation, merger or conveyance
would have been entitled upon consummation of such reorganization,
reclassification, consolidation, merger or conveyance; and, in any such case,
appropriate adjustment (as determined by the board of directors) shall be made
in the application of the provisions herein set forth with respect to the rights
and interests of the holder of this Amended and Restated Note to the end that
such provisions (including, without limitation, the provisions with respect to
changes in and other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, to the shares of stock or other
securities or property thereafter deliverable upon the conversion of this
Amended and Restated Note.

                                      -5-


<PAGE>




3.0      RESTRICTIONS ON TRANSFER
         ------------------------

                  3.1 The Holder, by acceptance hereof, acknowledges that he
understands that the Company will rely upon the representations set forth herein
in issuing the Amended and Restated Note and the Conversion Shares, if any,
without registration under the Securities Act of 1933 (as amended, the
"Securities Act"), or any securities law of any State of the United States.

                  3.2 Accordingly, the Holder, by acceptance of the Amended and
Restated Note, represents and warrants that this offering is being made pursuant
to the exemption from registration with the Securities and Exchange Commission
("SEC") afforded by Sections 3(b) and/or 4(2) of the Securities Act relating to
transactions by an issuer not involving any public offering. The Holder
understands that the Company has no present intention, and is under no
obligation to, register the Amended and Restated Note or the Conversion Shares
under the Securities Act, or any applicable state law, except as described in
the Registration Rights Agreement dated the date hereof among the Company and
the other parties thereto.

                  3.3 The Holder understands that due to lack of registration,
the Amended and Restated Note and the Conversion Shares will be restricted
securities, that the holder must bear the economic risk of the investment for an
indefinite period, that the Amended and Restated Note and the Conversion Shares
may not be sold, pledged or otherwise disposed of unless they are registered
under the Securities Act and any applicable state securities law, or an
exemption from such laws is available and the Company is supplied with an
opinion of counsel to the Holder, satisfactory to the Company, that registration
is not required under any of such laws, and in the opinion of counsel for the
Company, such sale, transfer, or pledge will not cause the Company to fail to be
in compliance with the exemption provisions under which the Amended and Restated
Note or the Conversion Shares were issued.

                  3.4 The Holder has such knowledge and experience in financial
and business affairs that he is capable of evaluating the merits and risks of
the prospective investment.

                  3.5 The Amended and Restated Note is being, and the Conversion
Shares will be, purchased for the Holder's own account for investment purposes
and not with a view to the resale or distribution thereof by the Holder.

                  3.6 Prior to the date hereof, the Holder has had an
opportunity to ask questions of and receive answers from the officers and
directors of the Company, concerning the Company, the Amended and Restated Note,
and the Company's business and to obtain any additional information which was
considered necessary to verify the information supplied by such parties.

                  3.7 The Holder understands that restrictive legends in
substantially the following form shall be placed on the certificate(s)
representing the Conversion Shares:

                  "The shares 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."

                                      -6-


<PAGE>




                  3.8 Notwithstanding the foregoing legend, the Company will not
require an opinion of counsel if the Conversion Shares may be sold pursuant to
the exemption from registration pursuant to Rule 144 of the Securities Act. In
entering into this transaction, the Holder is not relying upon any information,
other than the results of his own independent investigation.

                  THIS AMENDED AND RESTATED NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                                       CD&L, INC.



                                       By:
                                          --------------------------------------
                                          Name:
                                          Title:

ACCEPTED:


By:
   ---------------------------------
   Name:
   Title:

                                      -7-


<PAGE>


                                   ASSIGNMENT


                  FOR VALUE RECEIVED ___________________________________________

________________________________________________________________________________

hereby sells, assigns and transfers all of the rights of the undersigned under
the within Note, with respect to the conversion thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:
<TABLE>
<CAPTION>
<S>                                       <C>                                   <C>
    Name of Assignee                       Address                              Aggregate Principal Amount










Date:
       -------------------------------
                                           Signature:
                                                     ---------------------------------------------------

                                           Witness:
                                                    ----------------------------------------------------

</TABLE>




<PAGE>
                               EXERCISE AGREEMENT


                                                           Date: _______________


                  The undersigned, pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the Company's Common Stock as provided in the Note, and
makes payment in full therefore by conversion and application to the extent
necessary to pay the Conversion Price for such shares of such part of the
principal amount of the Note and interest due thereon as shall be necessary as
provided in the Note. The undersigned hereby represents and warrants that the
shares of Common Stock to be acquired upon exercise are being acquired for his
own account, without any present intention of reoffering, reselling or
distribution such Common Stock, except to the extent permitted under the
Securities Act of 1933, as amended. Terms used herein but not otherwise defined
herein shall have the meaning provided such terms in the Amended and Restated
Note of CD&L, Inc., dated April 14, 2004 in the initial principal amount of
_____________________ Dollars ($_______), payable to the order of
_______________________.



                             Signature:
                                       -----------------------------------------

                             Address:
                                     -------------------------------------------




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.28
<SEQUENCE>9
<FILENAME>b331333_ex10-28.txt
<DESCRIPTION>REGISTRATION RIGHTS AGREEMENT
<TEXT>
<PAGE>

                                                                   Exhibit 10.28

================================================================================

                          REGISTRATION RIGHTS AGREEMENT





                                 By and between





                                   CD&L, INC.,



                                  BNP PARIBAS,



                          EXETER VENTURE LENDERS, L.P.



                                       And



                        EXETER CAPITAL PARTNERS IV, L.P.



                                       And

                     THE OTHER INVESTORS SIGNATORIES HERETO



                                   Dated as of



                                 April 14, 2004


================================================================================

<PAGE>

                                                                  Execution Copy



                          REGISTRATION RIGHTS AGREEMENT
                          -----------------------------

                  THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is dated
as of April 14, 2004 and entered into by and among CD&L, INC., a Delaware
corporation (the "Company"), the individual investors listed on Exhibit A
attached hereto (each, an "Investor" and collectively, the "Investors") and the
entities listed on Exhibit B attached hereto (each, an "Original Lender" and
collectively, the "Original Lenders") (such Investors and Original Lenders are
referred to herein as the "Lenders"). Unless otherwise provided in this
Agreement, capitalized terms used herein shall have the meanings set forth in a
Restructuring and Exchange Agreement, dated April 14, 2004, among the Company
and the Lenders (the "Exchange Agreement").

                  WHEREAS, the Lenders and the Company are parties to the
Exchange Agreement;

                  WHEREAS, in order to induce the Lenders to enter into the
Exchange Agreement, the Company has agreed to provide the registration rights
set forth in this Agreement; and

                  WHEREAS, the execution and delivery of this Agreement is a
condition to the consummation of the transactions described in the Exchange
Agreement;

                  NOW THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereto agree as follows;

                  SECTION 1.        Registration on Request.

                  (a) (i) Registration on Request. At any time and from time to
time after the date hereof, upon the request of any holder or group of holders
holding (x) at least a majority of the number of shares of Common Stock issued
or issuable upon conversion of the Company's Series A Preferred Stock
("Securities") and/or (y) at least a majority of the number of shares of Common
Stock issued or issuable upon conversion of the Company's Convertible Notes, for
a registration of Registrable Securities (a "Demand Request"), the Company will
promptly give written notice of such requested registration to all registered
holders of Registrable Securities, and thereupon the Company, in accordance with
the provisions of Section 4 hereof, will use its best efforts to effect the
registration under the Securities Act of

                  (A) the Registrable Securities which the Company has been so
         requested to register in accordance with the Demand Request for
         disposition in accordance with the intended method or methods of
         disposition stated in such request, and

                  (B) all other Registrable Securities which the Company has
         been requested to register by the holders thereof by written request
         given to the Company within twenty (20) days after the giving of such
         written notice by the Company (which request shall specify the intended
         method of disposition of such Registrable Securities),

all to the extent requisite to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Registrable Securities so to be
registered; provided, that the Company shall not be required to effect more than
one (1) registration pursuant to this Section 1 (a "Demand Registration") during
any twelve (12) month period. Notwithstanding anything to the contrary contained
herein, upon the effectiveness of a Registration Statement on Form S-1 or Form
S-3 covering all of the Registrable Securities held by the Lenders, the Company
shall have no further obligations hereunder.


<PAGE>

                  (ii) Effective Registration Statement. A registration
         requested pursuant to this Section 1 shall not be deemed to be effected
         (A) if a registration statement with respect thereto shall not have
         become effective, (B) if, after it has become effective, such
         registration is interfered with for any reason by any stop order,
         injunction or other order or requirement of the Commission or any other
         governmental agency or any court, and the result of such interference
         is to prevent the holders of Registrable Securities to be sold
         thereunder from disposing thereof in accordance with the intended
         methods of disposition, or (C) if the conditions to closing specified
         in the purchase agreement or underwriting agreement entered into in
         connection with any underwritten registration shall not be satisfied or
         waived with the consent of the underwriters of such Registrable
         Securities that were to have been sold thereunder, other than as a
         result of any breach by any such holder of its obligations thereunder
         or hereunder or (D) if the registration statement with respect thereto
         shall not have remained effective for a period of one hundred eighty
         (180) days unless all of the Registrable Securities requested to be
         registered by the Holders have been sold prior to the expiration of
         such one hundred eighty (180) day period.

                  (iii) Registration Statement Form. Registrations under this
         Section 1 shall be on such appropriate registration form of the
         Commission, including an offering on a continuous or delayed basis in
         the future of all or some portion of the Registrable Securities to the
         extent and under the terms and conditions set forth in the Securities
         Act (a "Shelf Registration"), as shall be selected by the Company and
         as shall permit the disposition of the Registrable Securities so to be
         registered in accordance with the intended method or methods of
         disposition specified in the request of the holders of Registrable
         Securities being registered for such registration. The Company agrees
         to include in any such registration statement all information which the
         holders of Registrable Securities being registered shall reasonably
         request. In the event the Company is not permitted to file a Demand
         Registration as a Shelf Registration or on Form S-3 because it is not
         current with its Commission filings or for any other reason, then the
         Company shall file such Demand Registration on Form S-1, provided that
         the Company shall not be required to file such Form S-1 until the
         consummation by the Company of a rights offering (the "Rights
         Offering") as long as such Rights Offering is consummated prior to
         January 14, 2005 (nine (9) months after the date hereof). If the Rights
         Offering is not consummated by such date, then within thirty (30) days
         of demand from holders of at least twenty (20%) percent of the
         Registrable Securities, the Company shall file such Demand Registration
         on Form S-1 (or on Form S-3, if the Company is then permitted under
         applicable securities laws to use a Form S-3). If a Demand Registration
         is filed as a Shelf Registration, then the Company will use its best
         efforts keep such Shelf Registration filed pursuant to this Section 1
         continuously effective for the period beginning on the date on which
         the Shelf Registration is declared effective and ending on the earlier
         of (a) the first date that there are no Registrable Securities and (b)
         the date as of which the Shelf Registration Statement has been
         effective for one hundred eighty (180) days; provided, that the Company
         shall take no affirmative actions to deregister any Registrable
         Securities not sold within such one hundred eighty (180) day period.
         During the period during which the Shelf Registration is effective, the
         Company shall supplement or make amendments to the Shelf Registration,
         if required by the Securities Act and the policies, rules and
         regulations of the Commission as announced from time to time, or if
         reasonably requested by any holder of Registrable Securities or an
         underwriter of Registrable Securities, including to reflect any
         specific plan of distribution or method of sale, and shall use its best
         efforts to have such supplements and amendments declared effective, if
         required, as soon as practicable after filing.


                                      -2-
<PAGE>

                  (iv) Selection of Underwriters. If a requested registration
         pursuant to this Section 1 involves an underwritten offering, the
         managing underwriter or underwriters shall be selected by the majority
         of the holders of Registrable Securities initiating a Demand
         Registration, such underwriter to be reasonably satisfactory to the
         Company.

                  (v) Priority in Requested Registrations. If a requested
         registration pursuant to this Section 1 involves an underwritten
         offering, and the managing underwriter shall advise the Company in
         writing (with a copy to each Person requesting registration of
         Registrable Securities) that, in its opinion, the number of securities
         requested to be included in such registration exceeds the number which
         can be sold in such offering within a price range acceptable to the
         holders of a majority of the Registrable Securities requested to be
         included therein, the Company will include in such registration to the
         extent of the number which the Company is so advised can be sold in
         such offering such securities in the following order: (x) first,
         Registrable Securities which are proposed to be included in such
         registration by the Holders pro rata among such Holders on the basis of
         the number of Registrable Securities owned by such Holders; and (y)
         second, all other securities requested to be included in such
         registration by the Company and other Persons exercising piggyback
         rights pro rata among the Company and such holders.

                  (b) If, while a registration request is pending pursuant to
this Section 1, the Company has been advised by legal counsel that the filing of
a registration statement would require the disclosure of a material financing or
investment transaction, which disclosure the Company reasonably determines in
good faith would have a material adverse effect on the Company, the Company
shall not be required to effect a registration pursuant to this Section 1 until
the earlier of (A) the date upon which such material financing or investment
transaction is otherwise disclosed to the public or ceases to be material and
(B) ninety (90) days after the Company makes such good faith determination,
provided that the Company shall not be permitted to delay a requested
registration in reliance on this paragraph (b) more than once in any twelve (12)
month period and provided, further, that in the event the Company exercises its
rights under this Section 1(b), the registration shall not be counted as a
Demand Registration for purposes of Section 1(a)(i) hereof.

                  (c) A requested registration under this Section 1 may be
rescinded by written notice to the Company by the Requisite Holders. Such
rescinded registration shall not count as a registration statement initiated
pursuant to this Section 1 for purposes of paragraph (a)(i) above if such
request is rescinded by the Requisite Holders not later than ten (10) days prior
to the filing of a registration statement with the Commission.



                                      -3-
<PAGE>


                  SECTION 2.        Piggyback Registrations.

                  (a) Right to Piggyback. Whenever the Company proposes to
register any of its equity securities under the Securities Act (other than the
proposed shareholder rights offering described in Section 10 of the Exchange
Agreement, or pursuant to a transaction described in Rule 145 of the Securities
Act or on Form S-4 or S-8), whether or not for sale for its own account, the
Company will each time give prompt written confidential notice of such proposed
filing to all Holders (i) in all cases at least thirty (30) days before the
anticipated filing date and (ii) in the case of a proposed registration in
connection with the exercise of any demand registration rights (other than the
demand registration rights under Section 1 hereof) within fifteen (15) days
after the Company receives notice of such demand. Such notice shall offer such
Holders the opportunity to register such amount of Registrable Securities as
they shall request (a "Piggyback Registration"). Subject to Sections 3(a) and
3(b) hereof, the Company shall include in each such Piggyback Registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within twenty (20) days after such notice has
been given by the Company to the Holders. If the Registration Statement relating
to the Piggyback Registration is to cover an underwritten offering, such
Registrable Securities shall be included in the underwriting on the same terms
and conditions as the securities otherwise being sold through the underwriters.
Notice of the Company's intention to register such securities shall designate
the proposed underwriters of such Public Offering (which shall be one or more
underwriting firms of nationally recognized standing) and shall contain the
Company's agreement to use its reasonable efforts, if requested to do so, to
arrange for such underwriters to include in such underwriting the Registrable
Securities that the Company has been so requested to sell pursuant to Section 2
of this Agreement, it being understood that the holders of Registrable
Securities shall have no right to select different underwriters for the
disposition of their Registrable Securities. The Holders shall be permitted to
withdraw all or part of the Registrable Securities from a Piggyback Registration
at any time prior to the effective time of such Piggyback Registration.

                  (b) Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company by
or through one or more underwriters of recognized standing and the managing
underwriters thereof advise the Company in writing that in their good faith
judgment the number of securities requested to be included in such registration
exceeds the number which can be sold in such offering without materially and
adversely affecting the marketability of the offering, then the Company will
include in the Registration Statement relating to such registration (i) first,
the securities the Company proposes to sell, (ii) second, the Registrable
Securities requested to be included in such registration by the Holders thereof,
reduced, if necessary, on a pro rata basis, based on the number of shares of
Registrable Securities owned by each such Holder, and (iii) third, if no
Registrable Securities had to be excluded pursuant to this Section 2(b),
securities other than Registrable Securities requested to be included in such
registration, reduced, if necessary, on a pro rata basis, based on the amount of
such other securities owned by such other holders; provided that, if such
registration contemplates an "over-allotment option" on the part of
underwriters, to the extent such over-allotment option is exercised and the
Holders were excluded from registering any of the Registrable Securities they
requested be included in such registration (the "Excluded Registrable
Securities") pursuant to the priority provisions of Section 2(b) or 2(c), then
the over-allotment option shall be fulfilled through the registration and sale
of the Excluded Registrable Securities, subject to the priority provisions of
Section 2(b)(ii) above.


                                      -4-
<PAGE>

                  (c) Priority on Secondary Registrations. If a Piggyback
Registration is an underwritten secondary registration on behalf of any holders
of the Company's securities, by or through one or more underwriters of
recognized standing and the managing underwriters advise the Company in writing
that in their good faith judgment the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering without materially and adversely affecting the marketability of the
offering, the Company will include in such registration, (i) first, the
securities proposed to be sold by the Person initiating such registration, (ii)
second, the Registrable Securities requested to be included in such registration
by the Holders thereof and other securities requested to be included in such
registration by other Persons exercising piggyback rights granted to them by the
Company on or prior to the date hereof, reduced, if necessary, on a pro rata
basis, based on the number of shares of Registrable Securities and such other
securities owned by each Holder and each other Person and (iii) third, the
securities owned by such other holders exercising the piggyback rights granted
by the Company after the date hereof.

                  SECTION 3.        Holdback Agreements; Participation in
                                    Underwritten Registrations.

                  (a) Holdback Agreement of Holders of Registrable Securities.
If the Company shall at any time register securities under the Securities Act
(including any registration pursuant to Sections 1 and 2 hereof), each Holder
agrees, if so requested (pursuant to timely notice) by the managing underwriter
of an underwritten registration not to effect any public sale or public
distribution of any securities of the Company, other than those securities
included in a registration pursuant Sections 1 or 2 hereof without the prior
written consent of the Company (or such managing underwriter), during the thirty
(30) days prior to the effective date of such registration and until the earlier
of (i) the end of the one hundred eighty (180) days after the effective date of
such registration and (ii) the abandonment of such offering. Notwithstanding the
provisions of the preceding sentence, a Holder may sell any or all of its
Registrable Securities in a private sale. The Company may legend and impose stop
transfer instructions on any certificate evidencing securities relating to the
restrictions provided in this Section 3(a).

                  None of the foregoing provisions of this Section 3(a) shall
apply to any Holder if such Holder is prevented by applicable statute or
regulation from entering into any such agreement; provided, that any such Holder
shall undertake not to effect any public sale or public distribution of the
applicable class of Registrable Securities unless it has provided forty-five
(45) days' prior written notice of such sale or distribution to the underwriter
or underwriters.

                  (b) Holdback Agreement of the Company. During the period (x)
beginning thirty (30) days prior to the effective date of any registration
statement filed with respect to Registrable Securities pursuant to a Demand
Registration or Piggyback Registration in which any Holder or any group of
Holders has requested the sale of Registrable Securities representing more than
3% of the then outstanding Common Stock of the Company and such registration is
an underwritten public offering and (y) ending one hundred eighty (180) days
after the effective date of any such registration statement (if such lock-up
period is required by the underwriters), the Company shall not (except as part
of such registration) effect any public sale or public distribution of any of
its equity securities or of any security convertible into or exchangeable or
exercisable for any equity security of the Company (other than in connection
with any employee stock option or other benefit plan). The Company shall use its
reasonable best efforts to cause each of its directors and members of management
to agree, orally or in writing to be bound to provisions substantially similar
to those set forth in this Section 3(b).


                                      -5-
<PAGE>

                  (c) Participation in Underwritten Registrations. No Person may
participate in any registration hereunder which is underwritten unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) timely completes and executes all
questionnaires, customary powers of attorney, customary indemnities, customary
underwriting agreements and other customary documents required under the terms
of such underwriting arrangements; provided, that no Holder included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters other than representations and
warranties regarding such Holder's title to securities included in such
registration and its authorization to transfer such securities.

                  SECTION 4. Registration Procedures. Whenever the Company is
required to register Registrable Securities pursuant to Section 1 or 2 hereof,
the Company will use its best efforts to effect the registration to permit the
sale of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible:

                  (a) prepare and file with the Commission as soon as
practicable a Registration Statement with respect to such Registrable Securities
as prescribed by Section 2 or within sixty (60) days with respect to such
Registrable Securities and as prescribed by Section 1 on a form available for
the sale of the Registrable Securities by the holders thereof in accordance with
the intended method or methods of distribution thereof and use its best efforts
to cause each such Registration Statement to become and remain effective for up
to one hundred twenty (120) days after the Demand Request; provided, however,
that at least ten (10) days before filing a Registration Statement, the Company
will furnish to the holders of Registrable Securities covered by such
Registration Statement, the underwriters, if any, and any attorney, accountant
or other agent retained by any such holder of Registrable Securities or
underwriters (i) copies of all such documents proposed to be filed, which
documents will be subject to the review and comment of such Holders, their
counsel and underwriters, if any, and (ii) if requested, financial and other
information required by the Commission to be included in such Registration
Statement and all financial and other records, pertinent corporate documents and
properties of the Company customarily reviewed in connection with an
underwritten registration; and shall cause the officers, directors and employees
of the Company, counsel to the Company and independent certified public
accountants of the Company, to respond to such inquiries and supply all
information, as shall be necessary, in the opinion of respective counsel to such
Holders and underwriters, to conduct a reasonable investigation within the
meaning of the Securities Act, and will not file any Registration Statement to
which the holders of at least a majority of the Registrable Securities covered
by such Registration Statement or the underwriters, if any, shall reasonably
object;


                                      -6-
<PAGE>

                  (b) prepare and file with the Commission such amendments,
post-effective amendments and prospectus supplements to such Registration
Statement as may be necessary to keep such Registration Statement effective and
to comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement until such
time as all of such securities have been disposed of in accordance with the
intended methods of disposition by the seller or sellers thereof set forth in
such Registration Statement; provided, that the Company shall be deemed not to
have used its best efforts to keep a Registration Statement effective during the
applicable period if it voluntarily takes any action that results in the selling
holders of the Registrable Securities covered thereby not being able to sell
such Registrable Securities during that period;

                  (c) furnish to each selling Holder of Registrable Securities
covered by a registration statement and to each underwriter, if any, such number
of copies of such registration statement, each amendment and post-effective
amendment thereto, the prospectus included in such registration statement
(including each preliminary prospectus and any supplement to such prospectus and
any other prospectus filed under Rule 424 of the Securities Act), in each case
including all exhibits, and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such seller or to be disposed of by such underwriter (the Company
hereby consenting to the use in accordance with all applicable law of each such
registration statement (or amendment or post-effective amendment thereto) and
each such prospectus (or preliminary prospectus or supplement thereto) by each
such seller and the underwriters, if any, in connection with the offering and
sale of the Registrable Securities covered by such registration statement or
prospectus);

                  (d) use its best efforts to register or qualify and, if
applicable, to cooperate with the selling holders of Registrable Securities, the
underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or
qualification) of, the securities to be included in a Registration Statement for
offer and sale under the securities or blue sky laws of such jurisdictions
within the United States of America as any selling Holder or managing
underwriters (if any) shall reasonably request, to keep each such registration
or qualification (or exemption therefrom) effective during the period such
Registration Statement is required to be kept effective and to do any and all
other acts or things necessary or advisable to enable the disposition in such
jurisdictions of the securities covered by the applicable Registration
Statement; provided that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph or (ii) consent to general service of
process in any such jurisdiction;

                  (e) cause all such Registrable Securities to be listed on each
securities exchange on which securities of the same class as the Registrable
Securities are then listed and, if not so listed, to be listed on the AMEX and,
if listed on the AMEX, use its best efforts to secure designation of all such
Registrable Securities covered by such Registration Statement as an AMEX
security within the meaning of Rule 11Aa3-1 under the Exchange Act or, failing
that, to secure AMEX authorization for such Registrable Securities and, without
limiting the generality of the foregoing, to use its best efforts to arrange for
at least two market makers to register as such with respect to such Registrable
Securities with the AMEX;




                                      -7-
<PAGE>




                  (f) provide a transfer agent and registrar for all such
Registrable Securities and a CUSIP number for all such Registrable Securities
not later than the effective date of such Registration Statement;

                  (g) comply with all applicable rules and regulations of the
Commission, and make available to its security holders an earnings statement
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (or in each case within
such extended period of time as may be permitted by the Commission for filing
the applicable report with the Commission) (i) commencing at the end of any
fiscal quarter in which Registrable Securities are sold to underwriters in a
firm commitment or best efforts underwritten offering or (ii) if not sold to
underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company after the effective date of a Registration
Statement, which earnings statement shall cover said 12-month periods; provided,
however, that each Holder to be included in a Registration which makes a written
request therefor shall have the right to receive within thirty (30) days of
receipt by the Company of such request copies of the information;

                  (h) permit any Holder which, in its sole and exclusive
judgment, might be deemed to be an underwriter or a controlling person of the
Company, to participate in the preparation of such registration or comparable
statement and to require the insertion therein of material, furnished to the
Company in writing, which in the reasonable judgment of such Holder and its
counsel should be included;

                  (i) use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or suspending the
qualification (or exemption from qualification) of any of the securities
included therein for sale in any jurisdiction within the United States of
America, and, in the event of the issuance of any stop order suspending the
effectiveness of a Registration Statement, or of any order suspending the
qualification of any securities included in such Registration Statement for sale
in any jurisdiction within the United States of America, the Company will use
its best efforts promptly to obtain the withdrawal of such order at the earliest
possible moment;

                  (j) if the Piggyback Registration or Demand Registration is an
underwritten registration, obtain "cold comfort" letters and updates thereof,
including, without limitation, a "bring-down comfort letter", (which letters and
updates (in form, scope and substance) shall be reasonably satisfactory to the
managing underwriters, if any, and counsel to the selling holders of Registrable
Securities) from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each of the underwriters, if any, and
each selling Holder of Registrable Securities, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other matters as the
underwriters, if any, or the holders of a majority of the Registrable Securities
being sold may reasonably request;


                                      -8-
<PAGE>


                  (k) obtain opinions of independent counsel to the Company and
updates thereof (which counsel and opinions (in form, scope and substance) shall
be reasonably satisfactory to the managing underwriters, if any, and counsel to
the selling holders of the Registrable Securities being sold), addressed to each
selling Holder and each of the underwriters, if any, covering the matters
customarily covered in opinions of issuer's counsel requested in underwritten
offerings, such as the effectiveness of the Registration Statement and such
other matters as may be requested by such counsel and underwriters, if any;

                  (l) promptly (but in any event, within two (2) business days)
notify the selling holders of Registrable Securities, their counsel and the
managing underwriters, if any, and confirm such notice in writing,

                  (i) when a prospectus or any supplement or post-effective
         amendment to such prospectus has been filed, and, with respect to a
         Registration Statement or any post-effective amendment thereto, when
         the same has become effective,

                  (ii) of any request by the Commission or any other Federal or
         state governmental authority for amendments or supplements to a
         Registration Statement or related prospectus or for additional
         information,

                  (iii) of the issuance by the Commission of any stop order
         suspending the effectiveness of a Registration Statement or of any
         order preventing or suspending the use of any prospectus or the
         initiation of any proceedings by any Person for that purpose,

                  (iv) if at any time the representations and warranties of the
         Company contemplated by clause (i) of paragraph (q) below cease to be
         true and correct in any respect,

                  (v) of the receipt by the Company of any notification with
         respect to the suspension of the qualification or exemption from
         qualification of a Registration Statement or any of the Registrable
         Securities for offer or sale under the securities or blue sky laws of
         any jurisdiction, or the contemplation, initiation or threatening, of
         any proceeding for such purpose,

                  (vi) of the happening of any event that makes any statement
         made in such Registration Statement untrue in any material respect or
         that requires the making of any changes in such Registration Statement
         so that it will not contain any untrue statement of a material fact or
         omit to state any material fact required to be stated therein or
         necessary to make the statements therein, in light of the circumstances
         under which they were made (in the case of any prospectus), not
         misleading, and

                  (vii) of the Company's reasonable determination that a
         post-effective amendment to a Registration Statement would be
         appropriate;

                  (m) if requested by the managing underwriters, if any, or a
Holder of Registrable Securities being sold, promptly incorporate in a
prospectus, supplement or post-effective amendment such information as the
managing underwriters, if any, and the holders of the Registrable Securities
being sold reasonably request to be included therein relating to the sale of the
Registrable Securities, including, without limitation, information with respect
to the number of shares of Registrable Securities being sold to underwriters,
the purchase price being paid therefor by such underwriters and with respect to
any other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and make all required filings of such prospectus,
supplement or post-effective amendment promptly following notification of the
matters to be incorporated in such supplement or post-effective amendment;


                                      -9-
<PAGE>

                  (n) furnish to each selling Holder of Registrable Securities
and the managing underwriter, without charge, at least one signed copy of the
Registration Statement;

                  (o) cooperate with the selling holders of Registrable
Securities and the managing underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing the Registrable Securities
not bearing any restrictive legends and in a form eligible for deposit with The
Depository Trust Company to be sold and cause such Registrable Securities to be
in such denominations and registered in such names as the managing underwriters,
if any, or each Holder of Registrable Securities may request at least three (3)
business days prior to any sale of Registrable Securities to the underwriters;

                  (p) as promptly as practicable upon the occurrence of any
event contemplated by clause (vi) of paragraph (1) above, prepare a supplement
or post-effective amendment to the Registration Statement, or file any other
required document so that, as thereafter delivered to the purchasers of the
Registrable Securities being sold hereunder, the prospectus will not contain an
untrue statement of a material fact or an omission to state a material fact
required to be stated in a Registration Statement or prospectus or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading;

                  (q) enter into such agreements (including underwriting
agreements in customary form, scope and substance) and take all such other
actions in connection therewith as the holders of a majority of the Registrable
Securities being sold or the underwriters, if any, reasonably request in order
to expedite or facilitate the registration or the disposition of such
Registrable Securities, and in such connection, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration:

                  (i) make such representations and warranties to the holders of
         such Registrable Securities and the underwriters, if any, with respect
         to the business of the Company and the Registration Statement, in form,
         substance and scope as are customarily made by issuers to underwriters
         in underwritten offerings and confirm the same, if and when requested;

                  (ii) if an underwriting agreement is entered into, cause the
         same to include the indemnification and contribution provisions and
         procedures substantially similar to (and no less favorable to the
         selling holders of Registrable Securities and the underwriters than)
         those contained in Section 6 hereof with respect to all parties to be
         indemnified pursuant to said Section (or, with respect to the
         indemnification of such underwriters, such similar indemnification and
         contribution provisions as such underwriters shall customarily
         require); and


                                      -10-
<PAGE>


                  (iii) deliver such documents and certificates as may be
         requested by the holders of Registrable Securities being sold and
         managing underwriters, if any, to evidence compliance with clause (i)
         above and with any conditions contained in the underwriting agreement
         or other similar agreement entered into by the Company, it being
         understood that the above shall be done at each closing under such
         underwriting or similar agreement or as and to the extent otherwise
         reasonably requested by the holders of a majority of the Registrable
         Securities being sold.

                  (r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and their
respective counsel in connection with any filings required to be made with the
NASD;

                  (s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by the
Registration Statement contemplated hereby; and

                  (t) cause its employees and personnel to use their reasonable
efforts to support the marketing of the Registrable Securities (including,
without limitation, the participation in "road shows,") to the extent possible
taking into account the Company's business needs and the requirements of the
marketing process.

                  Each Holder agrees by acquisition of such Registrable
Securities that, upon receipt of written notice from the Company of the
happening of any event of the kind described in Section 4(1)(ii), 4(1)(iii),
4(1)(v), 4(1)(vi) or 4(1)(vii), such Holder will forthwith discontinue
disposition of such Registrable Securities covered by such Registration
Statement until such Holder's receipt of the copies of the supplemented or
amended Registration Statement contemplated by Section 4(p), or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated or deemed to be incorporated by
reference in such prospectus, and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice. If the Company shall give any such notice, the time periods mentioned in
Section 1 hereof shall be extended by the number of days during such periods
from and including the date of the giving of such notice to and including the
date when each seller of Registrable Securities covered by such Registration
Statement receives (x) the copies of the supplemented or amended prospectus
contemplated by Section 4(p) hereof or (y) the Advice, as the case may be.

                  SECTION 5.        Registration Expenses.

                  (a) All expenses incident to the Company's performance of or
compliance with this Agreement, including without limitation (i) all
registration, filing fees and expenses (including fees with respect to filings
made with AMEX and the NASD (including, if applicable, the fees and expenses of
an" "qualified independent underwriter", as may be required by the rules and
regulations of the NASD), (ii) fees and expenses of compliance with all Federal
securities and State "blue sky" laws (including fees and disbursements of
counsel for the underwriters and selling Holders (including local counsel) in
connection with blue sky qualifications of the Registrable Securities and
determinations of their eligibility for investment under the laws of such
jurisdiction as the managing underwriters or holders of a majority of the
Registrable Securities being sold may designate), (iii) printing expenses
(including printing certificates for the Registrable Securities to be sold and
the Registration Statements), messenger and delivery expenses, duplication, word
processing, and telephone expenses, (iv) fees and disbursements of counsel for
the Company, and (v) fees and disbursements of all independent certified public
accountants of the Company incurred in connection with such registration
(including the expenses of any special audit and "cold comfort" letters incident
to such registration), underwriters (excluding discounts, commissions or fees of
underwriters, selling brokers, dealer managers or similar securities industry
professionals relating to the distribution of the Registrable Securities) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne by the Company regardless of whether a
Registration Statement becomes effective; provided that the Company will, in any
event, pay its internal expenses (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting
duties), the expenses of any annual audit or quarterly review, the fees and
expenses of any Person, including special experts, retained by the Company, the
expense of any liability insurance and the fees and expenses of one special
counsel for the holders of Registrable Securities being sold and expenses and
fees for listing the securities to be registered on each securities exchange on
which similar securities issued by the Company are then listed or on the AMEX.


                                      -11-
<PAGE>

                  SECTION 6.        Indemnification.

                  (a) Indemnification by the Company. The Company agrees to
indemnify, to the fullest extent permitted by law, each Holder and each officer,
director, partner, employee, counsel, agent or representative of such Holder and
each Person who controls any such Person (within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act) against, and hold it
and them harmless from, all losses, claims, damages, liabilities, costs
(including, without limitation, costs of preparation and attorneys' fees and
disbursements) and expenses, including expenses of investigation, joint or
several, (collectively, "Losses") resulting from any violation by the Company of
the provisions of the Securities Act or arising out of, caused by or based upon
any untrue or alleged untrue statement of material fact contained in any
Registration Statement, or any omission or alleged omission of a material fact
required to be stated therein (in the case of any prospectus, in light of the
circumstances under which they were made) or necessary to make the statements
therein not misleading (a "Misstatement/Omission"), except that the Company
shall not be liable (i) insofar as such Misstatement/Omission is based upon and
in conformity with information furnished in writing to the Company by a Holder
expressly for use therein and (ii) to the extent that any such claim arises out
of or is based upon a Misstatement/Omission made in any preliminary prospectus,
(x) to the extent such Misstatement/Omission is corrected in the final
prospectus and (y) having previously been timely furnished by or on behalf of
the Company with sufficient copies of the final prospectus, such indemnified
Person thereafter fails to deliver such prospectus prior to or concurrently with
the sale to the Person who purchased a Registrable Security from such
indemnified Person and who is asserting such claim. In connection with an
underwritten offering, the Company will indemnify such underwriters, selling
brokers, dealer managers and similar securities industry professionals, or any
of their officers, directors or employees or any Persons who control the same
within the meaning of Section 15 of the Securities Act, participating in the
distribution, their officers and directors and each Person who controls (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act) such underwriters to the same extent as provided above with
respect to the indemnification of the Holders. This indemnity shall be in
addition to any other indemnification arrangements to which the Company may
otherwise be party.


                                      -12-
<PAGE>


                  (b) Indemnification by Holders. In connection with any
Registration Statement in which a Holder is participating, each such Holder will
furnish to the Company in writing such powers of attorney, custody agreements
and letters of direction and other information and affidavits as the Company
reasonably requests for use in connection with any such Registration Statement,
and each such Holder agrees to indemnify, to the fullest extent permitted by
law, the Company, its directors and officers and each Person who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) against, and hold it and them harmless from, any
Losses resulting from any Misstatement/Omission, but only to the extent that
such Misstatement/Omission is based upon and in conformity with information
furnished in writing by such Holder expressly for use in such Registration
Statement; provided that the obligation to indemnify will be individual (several
and not joint) to each Holder and will be limited to the net amount of proceeds
(net of payment of all expenses) received by such Holder from the sale of
Registrable Securities pursuant to such Registration Statement giving rise to
such indemnification obligation.

                  (c) In case any action, claim or proceeding shall be brought
against any Person entitled to indemnification hereunder, such indemnified party
shall promptly notify each indemnifying party in writing, and such indemnifying
party shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses incurred in connection with the defense thereof. The failure to so
notify such indemnifying party shall not affect any obligation it may have to
any indemnified party under this Agreement or otherwise except to the extent
that (as finally determined by a court of competent jurisdiction (which
determination is not subject to review or appeal)) such failure materially and
adversely prejudiced such indemnifying party. Each indemnified party shall have
the right to employ separate counsel in such action, claim or proceeding and
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of each indemnified party unless: (i) such indemnifying
party has agreed to pay such expenses; (ii) such indemnifying party has failed
promptly to assume the defense and employ counsel reasonably satisfactory to
such indemnified party; or (iii) the named parties to any such action, claim or
proceeding (including any impleaded parties) include both such indemnified party
and such indemnifying party or an affiliate or controlling person of such
indemnifying party, and such indemnified party shall have been advised in
writing by counsel that either (x) there may be one or more legal defenses
available to it which are different from or in addition to those available to
such indemnifying party or such affiliate or controlling person or (y) a
conflict of interest may exist if such counsel represents such indemnified party
and such indemnifying party or its Affiliate or controlling person; provided,
however, that such indemnifying party shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general allegations
or circumstances, be responsible hereunder for the fees and expenses of more
than one separate firm of attorneys (in addition to any local counsel), which
counsel shall be designated by such indemnified party.


                                      -13-
<PAGE>

                  No indemnified party shall be liable for any settlement
effected without its written consent (which shall not be unreasonably withheld,
conditioned or delayed). Each indemnifying party agrees, jointly and severally,
that it will not, without the indemnified party's prior written consent (which
shall not be unreasonably withheld, conditioned or delayed), consent to entry of
any judgment or settle or compromise any pending or threatened claim, action or
proceeding in respect of which indemnification or contribution may be sought
hereunder unless the foregoing contains an unconditional release, in form and
substance reasonably satisfactory to the indemnified parties, of the indemnified
parties from all liability and obligation arising therefrom.

                  (d) The indemnifying party's liability to any such indemnified
party hereunder shall not be extinguished solely because any other indemnified
party is not entitled to indemnity hereunder.

                  (e) The indemnification provided for under this Agreement will
remain in full force and effect regardless of any investigation made by or on
behalf of the indemnified party or any officer, director or controlling Person
of such indemnified party, and will survive the transfer of securities.

                  (f) Contribution. If the indemnification provided for in this
Section 6 is unavailable to, or insufficient to hold harmless, an indemnified
party under Section 6(a) or Section 6(b) above in respect of any Losses referred
to in such Sections, then each applicable indemnifying party shall have an
obligation to contribute to the amount paid or payable by such indemnified party
as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of the Company, on the one hand, and of the Holder, on the other,
in connection with the Misstatement/Omission which resulted in such Losses,
taking into account any other relevant equitable considerations. The amount paid
or payable by a party as a result of the Losses referred to above shall be
deemed to include, subject to the limitations set forth in Section 6(c) above,
any legal or other fees or expenses reasonably incurred by such party in
connection with any investigation, lawsuit or legal or administrative action or
proceeding.

                  The relative fault of the Company, on the one hand, and of the
Holder, on the other, shall be determined by reference to, among other things,
whether the relevant Misstatement/Omission relates to information supplied by
the Company or by the Holder and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such Misstatement/Omission.

                  The Company and each Holder agree that it would not be just
and equitable if contribution pursuant to this Section 6(f) were determined by
pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to above. Notwithstanding the
provisions of this Section 6(f), a Holder shall not be required to contribute
any amount in excess of the amount such Holder would have been required to pay
to an indemnified party if the indemnity under Section 6(b) was available.

                  No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The obligation of any Person to contribute pursuant to this
Section 6(f) shall be several and not joint.


                                      -14-
<PAGE>


                  An indemnifying party shall make payments of all amounts
required to be made pursuant to the foregoing provisions of this Section 6(f) to
or for the account of the indemnified party from time to time promptly upon
receipt of bills or invoices relating thereto or when otherwise due or payable.

                  The indemnity and contribution agreements contained in this
Section 6 are in addition to any liability that the indemnifying parties may
have to the indemnified parties.

                  SECTION 7.        Rules 144 and 144A.

                  The Company shall timely file the reports required to be filed
by it under the Securities Act and the Exchange Act (including but not limited
to the reports under sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c) of Rule 144 adopted by the Commission under the Securities Act)
and the rules and regulations adopted by the Commission thereunder (or, if the
Company is not required to file such reports, it will, upon the request of any
Holder of Registrable Securities, make publicly available other information) and
will take such further action as any Holder of Registrable Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by (a) Rule 144 and Rule
144A under the Securities Act, as such Rules may be amended from time to time,
or (b) any similar rule or regulation hereafter adopted by the Commission. Upon
the request of any Holder of Registrable Securities, the Company will deliver to
such Holder a written statement as to whether it has complied with the filing
requirements of this Section 7.

                  SECTION 8.        Definitions.

                  "Advice" shall have the meaning provided in Section 4.

                  "AMEX" means the American Stock Exchange.

                  "Commission" means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.

                  "Common Stock" means the Company's Common Stock, par value
$.001 per share, or any other shares of capital stock or other securities of the
Company into which such shares of Common Stock shall be reclassified or changed,
including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock, or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.

                  "Company" shall have the meaning provided in the first
paragraph of this Agreement.

                  "Demand Registration" shall have the meaning provided in
Section 1(a).


                                      -15-
<PAGE>


                  "Demand Request" shall have the meaning provided in Section
1(a).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any similar Federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
the time.

                  "Holder" means any Person who owns or holds Series A Preferred
Stock, Convertible Notes or shares of Common Stock issued upon conversion of
such Series A Preferred Stock or Convertible Notes.

                  "Lender" shall have the meaning provided in the first
paragraph of this Agreement.

                  "Losses" shall have the meaning provided in Section 6(a).

                  "Misstatement/Omission" shall have the meaning provided in
Section 6(a).

                  "NASD" means the National Association of Securities Dealers,
Inc.

                  "Person" means any natural person, corporation, partnership,
firm, association, trust, government, governmental agency, limited liability
company or any other entity, whether acting in an individual, fiduciary or other
capacity.

                  "Piggyback Registration" shall have the meaning provided in
Section 2(a).

                  "Public Offering" shall mean a widely distributed sale of
Common Stock in an underwritten public offering pursuant to an effective
registration statement filed with the Commission.

                  "Registrable Securities" means (i) any of the shares of Common
Stock issuable or issued upon the conversion of the Series A Preferred Stock,
the Convertible Notes or the Warrants and (ii) any securities issued or issuable
with respect to such Common Stock referred to in clause (i) above by way of
stock dividends or stock splits or in connection with a combination of shares,
recapitalization, merger, consolidation, or other reorganization or otherwise.
As to any particular Registrable Securities, once issued such securities will
cease to be Registrable Securities when they have been distributed to the public
pursuant to an offering registered under the Securities Act, sold to the public
through a broker, dealer or market maker in compliance with Rule 144 under the
Securities Act or any successor rule or ceased to be outstanding. The foregoing
notwithstanding, a security will not cease to be a Registrable Security until
all stop transfer instructions or notations and restrictive legends with respect
to such security have been lifted or removed.

                  "Registration Expenses" shall have the meaning provided in
Section 5(a).

                  "Registration Statement" means any registration statement
(including a shelf registration) under the Securities Act of the Company that
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the related prospectus, all amendments and supplements to
such registration statement, including pre- and post-effective amendments, all
exhibits thereto and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.




                                      -16-
<PAGE>




                  "Requisite Holders" shall mean, at any time, and with respect
to any registration and related public offering, the holders of at least a
majority of the Registrable Securities proposed to be included in such Public
Offering before giving effect to any cut-back provisions contained herein.

                  "Securities Act" means the Securities Act of 1933, as amended
from time to time, or any similar Federal statute, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect at
the time.

                  "Shelf Registration" shall have the meaning set forth in
Section 1(b) of this Agreement.

                  "Warrants" shall mean the warrants, dated January 29, 1999, to
purchase an aggregate of 506,250 shares of the Company's Common Stock, held by
the Original Lenders.

                  SECTION 9.        Miscellaneous.

                  (a) Effect on Other Agreements. Upon the execution of this
Agreement, the Registration Rights Agreement, dated January 29, 1999 (the "Prior
Agreement"), among the Company and the Original Lenders shall be null and void,
and neither the Company nor the Original Lenders shall have any obligations or
rights thereunder. The registration rights granted to the Lenders under this
Agreement do not and shall not conflict with any other registration rights
granted by the Company. The Company shall not, after the date hereof, grant any
other registration rights which conflict with, impair or are otherwise senior to
the registration rights granted hereby.

                  (b) Remedies. Any Person having rights under any provision of
this Agreement will be entitled to enforce such rights specifically to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise all other rights provided in the Exchange Agreement or the Amended Loan
Agreement (as defined in the Exchange Agreement) or granted by law, it being
understood and agreed that the Company shall not be liable for any decrease in
value of Registrable Securities arising from circumstances beyond its control.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and hereby
agree to waive the defense in any action for specific performance or injunctive
relief that a remedy at law would be adequate. Accordingly, any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or other security) for specific performance and for
other injunctive relief in order to enforce or prevent violation of the
provisions of this Agreement.

                  (c) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement, including the provisions of this
sentence, may be amended, modified, supplemented or waived only upon the prior
written consent of the Company and the Holders of a majority of the Registrable
Securities; provided that any such amendment, modification, supplement or waiver
shall not effect the rights of any Holder under this Agreement without such
Holder's consent.




                                      -17-
<PAGE>




                  (d) Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not. In addition, whether or not any express assignment
has been made, the provisions of this Agreement which are for the benefit of any
Lender or Holder are also for the benefit of, and enforceable by, any subsequent
Holder of Registrable Securities (except in the event such subsequent Holder is
a direct competitor of the Company (as determined in good faith by management of
the Company)). The Company may not assign its rights or obligations hereunder
without prior written consent of each Holder except by operation of law.

                  (e) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected, it being intended that the rights and privileges of the parties
hereto shall be enforceable to the fullest extent permitted by law.

                  (f) Counterparts. This Agreement may be executed in any number
of counterparts, any one of which need not contain the signatures of more than
one party, but each of which when so executed shall be deemed to be an original
and all such counterparts taken together shall constitute one and the same
Agreement.

                  (g) Descriptive Headings: Interpretation. The descriptive
headings of this Agreement are inserted for convenience of reference only and
shall not limit or otherwise affect the meaning hereof. The use of the word
"including" in this Agreement shall be by way of example rather than by
limitation.

                  (h) 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.
                  80 Wesley Street
                  South Hackensack, New Jersey  07606
                  Attention:  Chief Executive Officer
                  Telephone:  201-487-7740
                  Facsimile:  201-489-6974





                                      -18-
<PAGE>




                  with a copy (which shall not constitute notice) to its
                  counsel:

                  Lowenstein Sandler PC
                  65 Livingston Avenue
                  Roseland, New Jersey  07068
                  Attention:  Alan Wovsaniker, Esq.
                  Telephone:  973-597-2564
                  Facsimile:  973-597-2565

                  If to the Investors, to:

                  Albert W. Van Ness, Jr.
                  CD&L, Inc.
                  80 Wesley Street
                  South Hackensack, New Jersey  07606
                  Telephone:  201-487-7740
                  Facsimile:  201-489-6974

                  with a copy (which shall not constitute notice) to its
                  counsel:

                  Mark Carlesimo, Esq.
                  CD&L, Inc.
                  80 Wesley Street
                  South Hackensack, New Jersey  07606
                  Telephone:  201-487-7740
                  Facsimile:  201-489-6974

                  If to the Original Lenders, to:

                  BNP Paribas
                  787 Seventh Avenue
                  New York, New York  10019
                  Attention:  Jeffrey Youle
                  Telephone:  212-841-2000
                  Facsimile:  212-841-3558


                  with a copy (which shall not constitute notice) to its
                  counsel:


                  White & Case LLP
                  1155 Avenue of the Americas
                  New York, New York  10036
                  Attention:  John M. Reiss, Esq.
                              Mark L. Mandel, Esq.
                  Telephone:  (212) 819-8200
                  Facsimile:  (212) 354-8113





                                      -19-
<PAGE>




                  Exeter Venture Lenders, L.P.
                  10 East 53rd Street, 32nd Floor
                  New York, New York  10022
                  Attention: Keith R. Fox
                  Telephone: 212-872-1172
                  Facsimile: 212-872-1198


                  Exeter Capital Partners IV, L.P.
                  10 East 53rd Street, 32nd Floor
                  New York, New York  10022
                  Attention: Keith R. Fox
                  Telephone: 212-872-1172
                  Facsimile: 212-872-1198

                  (i) Governing Law; Submission to Jurisdiction. 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.

                  (j) Submission to Jurisdiction; Waiver of Jury Trial. (i) 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
9(h) 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 9(j)(i) 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.

                  (ii) 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 9(j)(i) 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.




                                      -20-
<PAGE>



                  (iii) 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.

                  (iv) 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.

                  (v) Each party to this Agreement hereby waives, to the fullest
         extent permitted by applicable law, any right it may have to a trial 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 party (x) certifies that no representative, agent or attorney of
         the any other party has represented, expressly or otherwise that such
         other party would not, in the event of litigation, seek to enforce the
         foregoing waiver and (y) acknowledges that it and the other parties
         have been induced to enter into this Agreement by, among other things,
         the mutual waivers and certifications in this Section 9(j)(v).

                  (k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter, including, without limitation, the Prior Agreement.

                  (l) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.




                                      -21-
<PAGE>



                  IN WITNESS WHEREOF the parties hereto have or have caused this
Registration Agreement to be duly executed as of the date first above written.

                                         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:  Kurt Bergquist
                                            Title: Vice President

                                         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:  Kurt Bergquist
                                            Title: Vice President



                                                   Investors Signatures Follow



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.29
<SEQUENCE>10
<FILENAME>b331333_ex10-29.txt
<DESCRIPTION>STOCKHOLDERS AGREEMENT
<TEXT>
<PAGE>

                                                                   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


<PAGE>




         (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 Albert W. Van Ness, Jr., William T. Brannan
and Michael Brooks, 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.

                                      -2-


<PAGE>




         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.

                                      -3-


<PAGE>




         (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

                                      -4-


<PAGE>



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).

                                      -5-


<PAGE>




         (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;

                                      -6-


<PAGE>




         (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

                                      -7-


<PAGE>



                  (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.

                                      -8-


<PAGE>




         (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.

                                      -9-


<PAGE>




         (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:

                                      -10-


<PAGE>


(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.

                                      -11-


<PAGE>




         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.
                 80 Wesley Street
                 South Hackensack, New Jersey  07606
                 Attention:  Chief Executive Officer
                 Telephone:        (201) 487-7740
                 Facsimile:        (201) 489-6974

                 with a copy (which shall not constitute notice) to its counsel:

                 Alan Wovsaniker, Esq.
                 Lowenstein Sandler PC
                 65 Livingston Avenue
                 Roseland, New Jersey  07068
                 Telephone:        (973) 597-2500
                 Facsimile:        (973) 597-2565

                 If to the Investors, to:

                 Albert Van Ness, Jr.
                 CD&L, Inc.
                 80 Wesley Street
                 South Hackensack, New Jersey  07606
                 Telephone:        (201) 487-7740
                 Facsimile:        (201) 489-6974

                                      -12-


<PAGE>




               with a copy (which shall not constitute notice) to their counsel:

               Mark Carlesimo, Esq.
               CD&L, Inc.
               80 Wesley Street
               South Hackensack, New Jersey  07606
               Telephone:        (201) 487-7740
               Facsimile:        (201) 489-6974


               If to the Lenders, to:

               BNP Paribas
               787 Seventh Avenue
               New York, New York  10019
               Attention:  Jeffrey Youle
               Telephone:        (212) 841-2000
               Facsimile:        (212) 841-3558

               with a copy (which shall not constitute notice) to its counsel:


               White & Case LLP
               1155 Avenue of the Americas
               New York, New York  10036
               Attention:  John M. Reiss, Esq.
                           Mark L. Mandel, Esq.
               Telephone:        (212) 819-8200
               Facsimile:        (212) 354-8113


               Exeter Venture Lenders, L.P.
               10 East 53rd Street, 32nd Floor
               New York, New York  10022
               Attention: Keith R. Fox
               Telephone:        (212) 872-1172
               Facsimile:        (212) 872-1198


               Exeter Capital Partners IV, L.P.
               10 East 53rd Street, 32nd Floor
               New York, New York  10022
               Attention: Keith R. Fox
               Telephone:        (212) 872-1172
               Facsimile:        (212) 872-1198


         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.

                                      -13-


<PAGE>



         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.

                                      -14-


<PAGE>




         (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).

                                      -15-


<PAGE>

         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



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.30
<SEQUENCE>11
<FILENAME>b331333_ex10-30.txt
<DESCRIPTION>AMENDED AND RESTATED EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.30

                              Amended and Restated
                              EMPLOYMENT AGREEMENT


                  AGREEMENT (this "Agreement") made as of the 14th day of April,
2004 (the "Effective Date"), by and between CD&L, Inc., a corporation formed
under the laws of the State of Delaware (the "Company"), and William T. Brannan
(the "Executive").


                              W I T N E S S E T H:

                  WHEREAS, the Company and Executive have entered into an
employment agreement as of the first day of May, 2000 that expires on or about
May 1, 2005 (the "Prior Agreement"); and

                  WHEREAS, the Company wishes to ensure the continued employment
of the Executive with the Company and the Executive wishes to accept such
continued employment upon the terms and conditions hereinafter set forth; and

                  WHEREAS, The Parties desire to amend the Prior Agreement.

                  NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto agree as follows:

                  1.       Employment

                  The Company agrees to employ the Executive during the Term
specified in Section 2, and the Executive agrees to accept such employment, upon
the terms and conditions hereinafter set forth.

                  2. Term

                  (a) Except as otherwise provided in this Section 2, the
Executive's employment by the Company shall commence on the Effective Date and
expire on the close of business on December 31, 2008 (the "Term").

                  (b) Notwithstanding Section 2(a) above, the Term and
Executive's employment hereunder may terminate prior to the end thereof pursuant
to this Section 2(b) as set forth below, subject to the applicable provisions of
Section 6 of this Agreement with respect to post-termination payments and
benefits:

                           (i) Either party shall have the right to terminate
the Term and Executive's employment hereunder for any reason whatsoever, with or
without Cause (as hereinafter defined), by providing the other party hereto with
ninety (90) days' advance written notice of such termination.

<PAGE>

                           (ii) The Company shall have the right to terminate
the Term and Executive's employment hereunder for Cause (as hereinafter defined)
by giving written notice to Executive. For purposes of this Agreement, the term
"Cause" shall mean the Executive's commission or omission of any act which
materially and adversely affects the Company and which constitutes: (a) a
material breach or material failure to perform his duties under applicable law
and such breach or failure to perform constitutes self-dealing, willful
misconduct or recklessness, (b) commission of an act of dishonesty in the
performance of his duties hereunder or engagement in conduct materially
detrimental to the business of the Company, (c) conviction of a felony involving
moral turpitude, (d) a material breach or material failure to perform his
obligations and duties hereunder, which breach or failure the Executive shall
fail to remedy within 20 days after written demand from the Company, or (e)
violation in any material respect of the representations made in Section 17
below or the provisions of Sections 7 below.

                           (iii) The Executive shall be entitled to terminate
the Term and Executive's employment hereunder in the event that the Company is
in default of a material term of this Agreement, which default remains uncured
for a period of thirty (30) days after written notice of such default from the
Executive to the Company, such notice to specify the specific nature of the
claimed default and the manner in which the Executive requires such default to
be cured.

                           (iv) The Term and Executive's employment hereunder
shall automatically terminate in the event Executive shall have become Disabled
(as hereinafter defined). For the purposes of this Agreement, the term
"Disabled" as used herein shall have the same meaning as that term, or such
substantially equivalent term, has in any applicable group disability policy
carried by the Company. If no such policy exists, the term "Disabled" shall mean
the occurrence of any physical or mental condition which materially interferes
with the performance of Executive's customary duties in his capacity as an
employee where such disability has been in effect for a period of six (6) months
(excluding permitted vacation time), which need not be consecutive, during any
single twelve (12) month period.

                           (v) The Term and Executive's employment hereunder
shall automatically terminate in the event of Executive's death.

                  The effective date of the termination of the Executive's
employment with the Company, regardless of the reason therefor, is referred to
in this Agreement as the "Date of Termination". If the Executive terminates
their employment for any reason other than Section 2(b)(iii) or Section 6(c),
then the Date of Termination for purposes of Section 7 and 8 shall be December
31, 2008 regardless of when the Executive terminates their employment.


                                      -2-
<PAGE>

                  3. Duties and Responsibilities

                  (a) During the Term, the Executive shall have the position of
President and Chief Operating Officer and/or such other title or titles as may
be granted by the Company. The Executive shall perform such duties and
responsibilities as may reasonably be assigned to him from time to time
consistent with his position, and in the absence of such assignment, such duties
as are customary and commensurate with such position. It is understood and
agreed that Executive shall not be required to perform his duties outside of the
New York metropolitan area except for commercially and reasonably necessary
temporary or emergency assignments.

                  (b) The Executive agrees that he will (i) devote his best
efforts, and all his skill and ability to promote the interests of the Company;
(ii) carry out his duties in a competent and professional manner; (iii) work
with other employees of the Company in a competent and professional manner; and
(iv) generally promote the interests of the Company.

                  4. Compensation

                  (a) As compensation for all services rendered by the Executive
pursuant to Section 3 above, the Company shall pay the Executive, in accordance
with the Company's normal payroll periods and practices, base salary
compensation during the first year of the Term at an annual rate of $300,000
("Base Salary"). The Base Salary shall be subject to periodic increases based on
the Company's merit increase procedures and practices for similar executives.

                  (b) During the Term, the Company shall, in addition to Base
Salary, pay the Executive a bonus in accordance with the Company's then current
executive bonus program.

                  (c) All compensation paid to the Executive shall be subject to
applicable tax withholding requirements.

                  5. Expenses; Fringe Benefits

                  (a) The Company agrees to pay or to reimburse the Executive
during the Term for all reasonable, ordinary and necessary vouchered business or
entertainment expenses incurred in the performance of his services hereunder in
accordance with the policy of the Company as from time to time in effect.

                  (b) During the Term, the Executive and, to the extent
eligible, his dependents, shall be entitled to participate in and receive all
benefits under any employee benefit plans and programs provided by the Company
(including without limitation, medical, dental, disability, group life
(including accidental death and dismemberment) and business travel insurance
plans and programs) applicable generally to executive officers of the Company,
subject, however, to the terms and conditions of the various plans and programs
in effect from time to time.


                                      -3-
<PAGE>

                  (c) During the Term, the Company will provide the Executive
with an automobile allowance not to exceed $7,200 per year (or that amount equal
to what other executives of the Company of similar position are provided) to
cover his costs of leasing, insuring, garaging and maintaining an automobile for
use in the business of the Company.

                  (d) The Executive shall be entitled to paid vacation during
the Term of 4 weeks per year or otherwise in accordance with the vacation policy
of the Company applicable generally to executive officers of the Company in
effect from time to time, to be taken at such time(s) as shall not materially
interfere with the Executive's fulfillment of his duties hereunder, and shall be
entitled to as many holidays, sick days and personal days as are in accordance
with the Company's policy then in effect for its executive officers generally.

                  6. Termination

                  (a) Upon Executive's termination of employment for any reason,
the Company shall pay the Executive (or Executive's estate in the event of his
death), within five (5) business days following such termination, any accrued
but unpaid compensation as defined in Section 4(a) and (b) (including any unused
accrued vacation pay), any accrued but unpaid automobile allowances, any unpaid
reimbursement expenses outstanding as of the Date of Termination, and Executive
and/or his beneficiaries shall be entitled to any benefits to which he or they
may be entitled to under the plans and programs described in Section 5(b), or
any other applicable plans and programs, as of the Date of Termination in
accordance with the terms of such plans and programs. In addition, Executive
shall be entitled to the applicable payments and benefits set forth below.

                  (b)(i) If, during the Term, the Executive's employment
hereunder is terminated (i) by the Company for any reason other than Cause,
Disability or Death then Executive shall receive from the Company as liquidated
damages (A) his then applicable Base Salary compensation (including scheduled
increases pursuant to Section 4(a)) which would otherwise have been payable
through the remainder of the Term had the Executive's employment not been
terminated, and (B) bonuses for the remainder of the Term as if the Executive
was still employed in an amount equal to the highest rate of bonus (determined
as a percentage of Base Salary) paid the Executive during the Term (or, if
termination as used in this Section 6(b)(i) is prior to the end of the first
Bonus Measurement Period, then the percentage shall be assumed to be 100%). In
addition, the Company shall continue to provide Executive with the benefits and
perquisites set forth under Section 5(b) and (c) for the remainder of the Term.
For purposes of this Section 6(b)(i), the Term will be deemed to be two (2)
years from the date of termination (as used in this Section 6(b)(i)) or one year
after termination if termination occurs within the twelve (12) months preceding
December 31, 2008.

                  (ii) If, during the Term, the Executive's employment hereunder
is terminated by the Executive pursuant to Section 2(b)(iii) then the Executive
shall receive as liquidated damages (A) his then applicable Base Salary
compensation (including scheduled increases pursuant to Section 4(a)) which
would otherwise have been payable through the remainder of the Term had the
Executive's employment not been terminated, and (B) bonuses for the remainder of
the Term as if the Executive was still employed in an amount equal to the
highest rate of bonus (determined as a percentage of Base Salary) paid the
Executive during the Term (or, if termination as used in this Section 6(b)(ii)
is prior to the end of the first Bonus Measurement Period, then the percentage
shall be assumed to be 100%). In addition, the Company shall continue to provide
Executive with the benefits and perquisites set forth under Section 5(b) and (c)
for the remainder of the Term. For purposes of this Section 6(b)(ii), the Term
will be deemed to commence on the Effective Date and expire on the close of
business December 31, 2008 or one year after termination if termination occurs
in the last 12 months of the Term.


                                      -4-
<PAGE>

                  (c) If the Executive's employment with the Company terminates
for any reason by either party within 180 days following a Change of Control,
the Company shall, within twenty (20) days of Executive's Date of Termination,
pay Executive (or his estate in the event of his death) (A) a lump sum amount in
cash equal to two (2) times the sum of (i) the per annum Base Salary in effect
on the Date of Termination, and (ii) the highest annual bonus compensation
earned by Executive during his employment with the Company (or, if termination
is prior to the end of the first Bonus Measurement Period, then the percentage
shall be assumed to be 100%), and (B) any unpaid reimbursable expenses
outstanding, and any unused accrued vacation, as of the Date of Termination. In
addition, the Company shall continue to provide Executive with the benefits and
perquisites set forth under Section 5(b) and (c) for two years from the Date of
Termination, as though the Executive had not terminated employment.

                  For purposes of this Agreement, the term "Change in Control"
shall have the same meaning assigned such term under the terms of the stock
option plan of the Company in effect on the Effective Date or as amended or
modified from time to time and any related terms set forth in such plan used in
defining Change in Control are hereby incorporated by reference. If Executive's
employment is terminated by the Company without Cause prior to the date of a
Change in Control, but Executive reasonably demonstrates that the termination
(A) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control or (B) otherwise arose
in connection with, or in anticipation of, a Change in Control which has been
threatened or proposed, such termination shall be deemed to have occurred after
a Change in Control for purposes of this Agreement provided a Change in Control
shall actually have occurred.

                  Notwithstanding anything to the contrary set forth herein, the
Executive waives his right to terminate this Agreement under this Section 6(c)
with respect to any Change in Control that results from a certain restructuring
transaction that was consummated April 14, 2004 by and among the Company, the
Executive, BNP Paribas, Exeter Venture Lenders, LP, Exeter Capital Partners IV,
LP, and certain other individuals (the "Restructuring Transaction") or the
conversion of the notes acquired by the Executive thereunder. The Company and
the Executive agree, however, that such waiver shall not extend to any
conversion of convertible securities issued by the Company pursuant to the
Restructuring Transaction where such conversion occurred as a result of, in
connection with, or in response to an acquisition or attempted acquisition of
control of the Company by any person or entity not a party to the Restructuring
Transaction.


                                      -5-
<PAGE>

                  7. Confidential Information In consideration of the payments
made to the Executive herein, the Executive agrees as follows:

                  (a) The Executive hereby agrees and acknowledges that he has
and has had access to or is aware of Confidential Information. The Executive
hereby agrees that he shall keep strictly confidential and will not during and
after the Term, without the Company's express written consent, divulge, furnish
or make accessible to any person or entity, or make use of for the benefit of
himself or others, any Confidential Information obtained, possessed, or known by
him except as required in the regular course of performing the duties and
responsibilities of his employment by the Company while in the employ of the
Company, and that he will, prior to or upon his Date of Termination deliver or
return to the Company all such Confidential Information that is in written or
other physical or recorded form or which has been reduced to written or other
physical or recorded form, and all copies thereof, in his possession, custody or
control. The foregoing covenant shall not apply to (i) any Confidential
Information that becomes generally known or available to the public other than
as a result of a breach of the agreements of the Executive contained herein,
(ii) any disclosure of Confidential Information by the Executive that is
expressly required by judicial or administrative order; provided however that
the Executive shall have (x) notified the Company as promptly as possible of the
existence, terms and circumstances of any notice, subpoena or other process or
order issued by a court or administrative authority that may require him to
disclose any Confidential Information, and (y) cooperated with the Company, at
the Company's request, in taking legally available steps to resist or narrow
such process or order and to obtain an order or other reliable assurance that
confidential treatment will be given to such Confidential Information as is
required to be disclosed.

                  (b) For purposes of this Agreement, "Confidential Information"
means all non-public or proprietary information, data, trade secrets,
"know-how", or technology with respect to any products, designs, improvements,
research, styles, techniques, suppliers, clients, markets, methods of
distribution, accounting, advertising and promotion, pricing, sales, finances,
costs, profits, financial condition, organization, personnel, business systems
(including without limitation computer systems, software and programs), business
activities, operations, budgets, plans, prospects, objectives or strategies of
the Company.

                  8. Post-Employment Obligations In consideration of the
payments made to the Executive herein, the Executive agrees as follows:

                  (a) The Executive agrees that his services hereunder are of a
special, unique, extraordinary and intellectual character, and his position with
the Company places him in a position of confidence and trust with employees,
suppliers and clients of the Company. The Executive further agrees and
acknowledges that in the course of the Executive's employment with the Company,
the Executive has been and will be privy to Confidential Information. The
Executive consequently agrees that it is reasonable and necessary for the
protection of the trade secrets, goodwill and business of the Company that the
Executive make the covenants contained herein. Accordingly, the Executive agrees
that he shall not, without the prior written consent of the Company, directly or
indirectly, and regardless of the reason for his ceasing to be employed by the
Company (other than a termination by the Executive pursuant to Section 2(b)(iii)
or by the Company for any reason other than Cause):



                                      -6-
<PAGE>

                    (i)  for a period of two years from the Date of Termination,
                         hereinafter referred to as the "Restrictive Period",
                         own or hold any proprietary interest in, or be employed
                         by or receive remuneration from, any corporation,
                         partnership, sole proprietorship or other entity
                         engaged in competition with the Company or any of the
                         Company's subsidiaries or affiliates (hereinafter
                         referred to as a "Competitor") in the "Territory",
                         other than severance-type or retirement-type benefits
                         from entities constituting prior employers of the
                         Executive. The Executive agrees that during such
                         Restrictive Period he will not solicit the account of
                         any Competitor, any customer or client of the Company
                         or its subsidiaries or affiliates, or any entity or
                         individual that was such a customer or client during
                         the twenty four (24) month period immediately
                         proceeding the Restrictive period.

                    (ii) during the Restrictive Period act on behalf of any
                         Competitor to interfere with the relationship between
                         the Company or their subsidiaries or affiliates and
                         their employees.

                   (iii) during the Restrictive Period hire, solicit nor induce
                         to leave any employee or consultant of the Company or
                         any employee or consultant of the Company who was an
                         employee or consultant of the Company during the twelve
                         (12) month period immediately proceeding the
                         Restrictive Period.

                  For purposes of this Agreement, Territory shall mean (a) an
area within 100 miles of any place of business, office, warehouse or other
facility where the Company, or any of its subsidiaries or affiliates, or any of
its agents, licensees, or franchisees conducts business. For purposes of the
proceeding paragraph, (i) the term "proprietary interest" means legal or
equitable ownership, whether through stock holding or otherwise, of an equity
interest in a business, firm or entity other than ownership of less than one
percent of any class of equity interest in a publicly held business, firm or
entity and (ii) an entity shall be considered to be "engaged in competition", if
such entity is, or is a holding company for, a company engaged in the provision
of delivery, courier, or logistics services, or other transportation services
competitive with the business of the Company, its subsidiaries or affiliates in
the Territory.

                  (b) If the Executive commits a breach or is about to commit a
breach, of any of the provisions of sections 7 or 8 hereof, the Company shall
have the right to have the provisions of this Agreement specifically enforced by
any court having equity jurisdiction without being required to post bond or
other security and without having to prove the inadequacy of the available
remedies at law, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and that money
damages will not provide an adequate remedy to the Company. In addition, the
Company may take all such other actions and remedies available to them under law
or in equity and shall be entitled to such damages as they can show they have
sustained by reason of such breach.


                                      -7-
<PAGE>

                  (c) The parties acknowledge that the type and periods of
restriction imposed in the provisions of Sections 7 and 8 hereof are fair and
reasonable and are reasonably required for the protection of the Company and the
goodwill associated with the business of the Company; and that the time, scope,
geographic area and other provisions of Sections 7 and 8 have been specifically
negotiated by sophisticated parties and are given as an integral part of this
Agreement. If any of the covenants in Sections 7 and 8 hereof, or any part
thereof, is hereafter construed to be invalid or unenforceable, the same shall
not affect the remainder of the covenants or covenants, which shall be given
full effect, without regard to the invalid portions. If any of the covenants
contained in Sections 7 and 8 hereof, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or areas of such provision and, in its
reduced form, such provision shall then be enforceable. The parties hereto
intend to and hereby confer jurisdiction to enforce the covenants contained in
Sections 7 and 8 hereof above upon the courts of any state or other jurisdiction
within the geographical scope of such covenants. In the event that the courts of
any one or more of such states or other jurisdictions shall hold such covenants
wholly unenforceable by reason of the breadth of such scope or otherwise, it is
the intention of the parties hereto that such determination not bar or in any
way affect the right of the Company to the relief provided above in the courts
of any other states or other jurisdictions within the geographical scope of such
covenants, as to breaches of such covenants in such other respective states or
other jurisdictions, the above covenants as they relate to each state or other
jurisdiction being, for this purpose, severable into diverse and independent
covenants.

                  9. Intellectual Property

                  During the Term, the Executive will disclose to the Company
all ideas, inventions and business plans developed by him during such period
which relate directly or indirectly to the business of the Company, including
without limitation, any design, logo, slogan or campaign or any process,
operation, product or improvement which may be patentable or copyrightable. The
Executive agrees that all patents, licenses, copyrights, tradenames, trademarks,
service marks, advertising campaigns, promotional campaigns, designs, logos,
slogans and business plans developed or created by the Executive in the course
of his employment hereunder, either individually or in collaboration with
others, will be deemed works for hire and the sole and absolute property of the
Company. The Executive agrees, that at the Company's request, he will take all
steps necessary to secure the rights thereto to the Company by patent, copyright
or otherwise.

                                      -8-
<PAGE>

                  10.      Enforceability

                  The failure of any party at any time to require performance by
another party of any provision hereunder shall in no way affect the right of
that party thereafter to enforce the same, nor shall it affect any other party's
right to enforce the same, or to enforce any of the other provisions in this
Agreement; nor shall the waiver by any party of the breach of any provision
hereof be taken or held to be a waiver of any subsequent breach of such
provision or as a waiver of the provision itself.

                  11.      Assignment

                  This Agreement is a personal contract and the Executive's
rights and obligations hereunder may not be sold, transferred, assigned, pledged
or hypothecated by the Executive. The rights and obligation of the Company
hereunder shall be binding upon and run in favor of the successors and assigns
of the Company; provided, however, the Company may not assign or transfer its
rights or obligations under this Agreement unless such assignee or transferee
assumes the liabilities, obligations and duties of the Company, as contained in
this Agreement, either contractually or as a matter of law.

                  12.      Modification

                  This Agreement may not be orally canceled, changed, modified
or amended, and no cancellation, change, modification or amendment shall be
effective or binding, unless in writing and signed by the parties to this
Agreement.

                  13.      Severability; Survival

                  In the event any provision or portion of this Agreement is
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall nevertheless be binding upon
the parties with the same effect as though the invalid or unenforceable part had
been severed and deleted. The respective rights and obligations of the parties
hereunder shall survive the termination of the Executive's employment to the
extent necessary to the intended preservation of such rights and obligations.

                  14.      Life Insurance

                  During the term hereof the Company shall at Company's expense,
provide Executive life insurance at a face amount equal to three (3) times
Executive's Base Salary as of April 14, 2004. Executive shall be responsible for
any and all income taxes due on any premiums paid by the Company for such
insurance.


                                      -9-
<PAGE>

                  15.      Notice

                  Any notice, request, instruction or other document to be given
hereunder by any party hereto to another party shall be in writing and shall be
deemed effective (a) upon person delivery, if delivered by hand, or (b) three
days after the date of deposit in the mails, postage prepaid if mailed by
certified or registered mail, or (c) on the next business day, if sent by
facsimile transmission or prepaid overnight courier service, and in each case,
addressed as follows:

                  If to the Executive:
                  William T. Brannan
                  2 Carmella Court
                  Cedar Grove, NJ  07009

                  If to the Company:
                  CD&L, Inc.
                  80 Wesley Street
                  South Hackensack, NJ  07606
                  Attn: General Counsel

Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.

                  16.      Applicable Law

                  The validity, interpretation, performance, and enforcement of
this Agreement shall be governed by the laws of the State of New Jersey. In
addition, the Executive, and the Company irrevocably submit to the exclusive
jurisdiction of the courts of the State of New Jersey and the United States
District Court for the District of New Jersey for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this Agreement and
the transactions contemplated hereby. Service of process in connection with any
such suit, action or proceeding may be served on the Executive anywhere in the
world by the same methods as are specified for the giving of notices under this
Agreement. The Executive 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. The Executive 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.

                  17.      No Conflict

                  The Executive represents and warrants that he is not subject
to any agreement, instrument, order, judgment or decree of any kind, or any
other restrictive agreement of any character, which would prevent him from
entering into this Agreement or which would be breached by the Executive upon
his performance of his duties pursuant to this Agreement.

                  18.      Entire Agreement

                  This Agreement represents the entire agreement between the
Company and the Executive with respect to the subject matter hereof, and all
prior agreements, plans and arrangements relating to the employment of the
Executive by the Company (including without limitation the Prior Agreement) are
nullified and superseded hereby.


                                      -10-
<PAGE>

                  19.      Headings

                  The headings contained in this Agreement are for reference
purposes only, and shall not affect the meaning or interpretation of this
Agreement.


IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.


                             CD&L, INC.



                             By:_________________________________
                             Name: Albert W. Van Ness, Jr.
                             Title:  Chairman of the Board and
                                        Chief Executive Officer



                             By:_________________________________
                             Name: William T. Brannan
                             Title:  President and Chief Operating Officer






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11.1
<SEQUENCE>12
<FILENAME>b331333_ex11-1.txt
<DESCRIPTION>STATEMENT REGARDING COMPUTATION OF NET INCOME
<TEXT>
<PAGE>

                                                                    EXHIBIT 11.1

                           CD&L, INC. AND SUBSIDIARIES
                           NET INCOME (LOSS) PER SHARE
              FOR THE YEARS ENDED DECEMBER 31, 2003, 2002 AND 2001
                        (in thousands, except share data)

<TABLE>
<CAPTION>
SHARES CONSIDERED:                                                        2003               2002                2001
                                                                     ---------------    ---------------     --------------
<S>                                                                  <C>                <C>                 <C>

Weighted average portion of shares outstanding at
    December 31, 1999                                                     7,353,458          7,353,458           7,353,458

Weighted average portion of 305,202 common shares issued in
  connection with the Company's Employee Stock Purchase                     305,202            305,202             305,202
  Plan
                                                                     ---------------    ---------------     --------------

           Basic weighted average shares outstanding                      7,658,660          7,658,660           7,658,660

Incremental shares assumed issued in connection with stock
  options and warrants outstanding                                          515,419            508,751                   -
                                                                     ---------------    ---------------     --------------

           Diluted weighted average shares outstanding                    8,174,079          8,167,411           7,658,660
                                                                     ===============    ===============     ==============

Income (loss) from continuing operations                                     $1,683               $285             ($5,804)
Income (loss) from discontinued operations                                        -                  -                (465)
                                                                     ---------------    ---------------     --------------
Net income (loss)                                                            $1,683               $285             ($6,269)
                                                                     ===============    ===============     ==============

Basic income (loss) per share:
Continuing operations                                                          $.22               $.04               ($.76)
Discontinued operations                                                         .00                .00               ( .06)
                                                                     ---------------    ---------------     --------------
Net income (loss) per share                                                    $.22               $.04               ($.82)
                                                                     ===============    ===============     ==============

Diluted income (loss) per share:
Continuing operations                                                          $.21               $.03               ($.76)
Discontinued operations                                                         .00                .00               ( .06)
                                                                     ---------------    ---------------     --------------
Net income (loss) per share                                                    $.21               $.03               ($.82)
                                                                     ===============    ===============     ==============
</TABLE>


The following potentially dilutive common shares were excluded from the
computation of diluted Earnings Per Share because the exercise or conversion
price was greater than the average market price of common shares -

<TABLE>
<CAPTION>
                                                                          2003                2002                2001
                                                                       ----------          ----------          ----------
<S>                                                                    <C>                 <C>                 <C>
Stock options                                                           1,863,668           1,889,434           1,917,202
Subordinated convertible debentures                                             -                   -               9,863
Seller-financed convertible notes                                         352,905             458,083             524,961
                                                                       ==========          ==========          ==========
</TABLE>


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-14.1
<SEQUENCE>13
<FILENAME>b331333_ex14-1.txt
<DESCRIPTION>CODE OF ETHICS
<TEXT>


                                                                   Exhibit 14.1
--------------------------------------------------------------------------------


<PAGE>



                                 CODE OF ETHICS
                                       FOR
                            SENIOR FINANCIAL OFFICERS

1.       PURPOSE.

The Board of Directors (the "Board") of CD&L, Inc. (the "Company") has adopted
the following Code of Ethics (the "Code") to apply to the Company's Chief
Executive Officer; Chief Financial Officer; Chief Accounting Officer;
Controller; and Treasurer (the "Senior Financial Officers"). This Code is
intended to focus Senior Financial Officers on areas of ethical risk, provide
guidance to help them recognize and deal with ethical issues, provide mechanisms
to report unethical conduct, foster a culture of honesty and accountability,
deter wrongdoing and promote fair and accurate disclosure and financial
reporting.


No code or policy can anticipate every situation that may arise. Accordingly,
this Code is intended to serve as a source of guiding principles. Senior
Financial Officers are encouraged to bring questions about particular
circumstances that may involve one or more of the provisions of this Code to the
attention of the Chair of the Audit Committee, who may consult with inside or
outside legal counsel as appropriate.

2.       INTRODUCTION

Each Senior Financial Officer is expected to adhere to a high standard of
ethical conduct. The good name of the Company depends on the way Senior
Financial Officers conduct business and the way the public perceives that
conduct. Unethical actions, or the appearance of unethical actions, are not
acceptable. Senior Financial Officers are expected to be guided by the following
principles in carrying out their responsibilities.

         -   Loyalty. Senior Financial Officers should not be, or appear to
             be, subject to influences, interests or relationships that
             conflict with the best interests of the Company.

         -   Compliance with Applicable Laws. Senior Financial Officers are
             expected to comply with all laws, rules and regulations
             applicable to the Company's activities.

         -   Observance  of Ethical  Standards.  Senior  Financial  Officers
             must adhere to high  ethical  standards in  the  conduct of their
             duties. These include honesty and fairness.


<PAGE>



3.       INTEGRITY OF RECORDS AND FINANCIAL REPORTING.

Senior Financial Officers are responsible for the accurate and reliable
preparation and maintenance of the Company's financial records. Accurate and
reliable preparation of financial records is of critical importance to proper
management decisions and the fulfillment of the Company's financial, legal and
reporting obligations. Diligence in accurately preparing and maintaining the
Company's records allows the Company to fulfill its reporting obligations and to
provide stockholders, governmental authorities and the general public with full,
fair, accurate, timely and understandable disclosure. Senior Financial Officers
are responsible for establishing and maintaining adequate disclosure controls
and procedures, and internal controls and procedures, including procedures that
are designed to enable the Company to: (a) accurately document and account for
transactions on the books and records of the Company; and (b) maintain reports,
vouchers, bills, invoices, payroll and service records, business measurement and
performance records and other essential data with care and honesty.

Senior Financial Officers shall immediately bring to the attention of the Audit
Committee any information they may have concerning:

(a) Defects, deficiencies, or discrepancies related to the design or operation
of internal controls which may affect the Company's ability to accurately
record, process, summarize, report and disclose its financial data or

(b) Any fraud, whether or not material, that involves management or other
employees who have roles in the Company's financial reporting, disclosures or
internal controls.

4.       CONFLICT OF INTEREST.

Senior Financial Officers must avoid any conflicts of interest between
themselves and the Company. Any situation that involves, or may involve, a
conflict of interest with the Company, should be disclosed promptly to the Chair
of the Audit Committee, who may consult with inside or outside legal counsel as
appropriate.

A "conflict of interest" can occur when an individual's personal interest is
adverse to - or may appear to be adverse to - the interests of the Company as a
whole. Conflicts of interest also arise when an individual, or a member of his
or her family, receives improper personal benefits as a result of his or her
position with the Company.

This Code does not attempt to describe all possible conflicts of interest which
could develop. Some of the more common conflicts from which Senior Financial
Officers must refrain, however, are set forth below:

         -   Improper conduct and activities. Senior Financial Officers may
             not engage in any conduct or activities that are inconsistent
             with the Company's best interests or that disrupt or impair
             the Company's relationship with any person or entity with
             which the Company has, or proposes to enter into, a business
             or contractual relationship.

         -   Compensation from non-Company sources. Senior Financial
             Officers may not accept compensation for services performed
             for the Company from any source other than the Company.

                                      -2-

<PAGE>



         -   Gifts. Senior Financial Officers and members of their
             immediate families may not accept gifts from persons or
             entities where any such gift is being made in order to
             influence their actions in their position with the Company, or
             where acceptance of the gifts could create the appearance of a
             conflict of interest.

         -   Personal use of Company assets. Senior Financial Officers may
             not use Company assets, labor or information for personal use,
             other than incidental personal use, unless approved by the
             Chair of the Audit Committee or as part of a compensation or
             expense reimbursement program.

         -   Financial Interests in other Businesses. Senior Financial
             Officers should avoid having an ownership interest in any
             other enterprises, such as a customer, supplier or competitor,
             if that interest compromises the officer's loyalty to the
             Company.

5.       CORPORATE OPPORTUNITIES.

Senior Financial Officers are prohibited from: (a) taking for themselves
personally opportunities related to the Company's business without first
presenting those opportunities to the Company and obtaining approval from the
Board; (b) using the Company's property, information, or position for personal
gain; or (c) competing with the Company for business opportunities.

6.       CONFIDENTIALITY.

Senior Financial Officers should maintain the confidentiality of information
entrusted to them by the Company and any other confidential information about
the Company, its business or finances, customers or suppliers, that comes to
them, from whatever source, except when disclosure is authorized or legally
mandated. For purposes of this Code, "confidential information" includes all
non-public information relating to the Company, its business or finances,
customers or suppliers.

7.       COMPLIANCE WITH LAWS, RULES AND REGULATIONS.

Senior Financial Officers shall comply with laws, rules and regulations
applicable to the Company, including insider trading laws, and all other Company
policies. [Transactions in Company securities are governed by the Company's
Insider Trading Policy.]


8.       ENCOURAGING THE REPORTING OF ANY ILLEGAL OR UNETHICAL BEHAVIOR.

Senior Financial Officers must promote ethical behavior and create a culture of
ethical compliance. Senior Financial Officers should foster an environment in
which the Company: (a) encourages employees to talk to supervisors, managers and
other appropriate personnel when in doubt about the best course of action in a
particular situation; (b) encourages employees to report violations of laws,
rules and regulations to appropriate personnel; and (c) informs employees that
the Company will not allow retaliation for reports made in good faith.

                                      -3-

<PAGE>




9.       CONCLUSION.

Senior Financial Officers should communicate any suspected violations of this
Code promptly to the Chair of the Audit Committee. The Board or a person or
persons designated by the Board will investigate violations, and appropriate
disciplinary action will be taken in the event of any violation of the Code, up
to and including termination. Only the Audit Committee may grant any waivers of
this policy.

                                      -4-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>14
<FILENAME>b331333_ex21-1.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>


                                                                    Exhibit 21.1

                       LIST OF SUBSIDIARIES OF CD&L, INC.


1.       Clayton/National Courier Systems, Inc.

2.       Click Messenger Service, Inc.

3.       KBD Services, Inc.

4.       Olympic Courier Systems, Inc.

5.       Securities Courier Corporation

6.       Silver Star Express, Inc.

7.       SureWay Air Traffic Corporation (renamed as of April 9, 2001 to CD&L
         Air Freight, Inc.)

8.       Liberty Transfer Corp. (Inactive)



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>15
<FILENAME>b331333_ex23-1.txt
<DESCRIPTION>INDEPENDENT AUDITORS' CONSENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.1




INDEPENDENT AUDITORS' CONSENT



To the Board of Directors and Shareholders of CD&L, Inc.:


We consent to the incorporation by reference in Registration Statement Nos.
333-3321, 333-3323 and 333-47357 of CD&L, Inc. on Form S-8 of our report dated
March 26, 2004 (April 14, 2004 as to Notes 15 and 17), relating to the
consolidated financial statements of CD&L, Inc. as of and for the year ended
December 31, 2003 (which report expresses an unqualified opinion and includes
explanatory paragraphs relating to (i) the adoption of a new accounting
principle and (ii) the application of procedures relating to the restatement
discussed in Note 19 and the transitional disclosures described in Notes 2 and 7
related to the 2001 consolidated financial statements that were audited by other
auditors who have ceased operations and for which we have expressed no opinion
or other form of assurance other than with respect to such restatement and
transitional disclosures) appearing in this Annual Report on Form 10-K of CD&L,
Inc. for the year ended December 31, 2003.

DELOITTE & TOUCHE LLP


New York, New York
April 14, 2004





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>16
<FILENAME>b331333_ex23-2.txt
<DESCRIPTION>NOTICE OF INABILITY TO OBTAIN CONSENT
<TEXT>
<PAGE>

                                                                    EXHIBIT 23.2



NOTICE OF INABILITY TO OBTAIN CONSENT FROM ARTHUR ANDERSEN LLP



Section 11(a) of the Securities Act of 1933, as amended (the "Securities Act"),
provides that if part of a registration statement at the time it becomes
effective contains an untrue statement of a material fact, or omits a material
fact required to be stated therein or necessary to make the statements therein
not misleading, any person acquiring a security pursuant to such registration
statement (unless it is proved that at the time of such acquisition such person
knew of such untruth or omission) may assert a claim against, among others, an
accountant who has consented to be named as having certified any part of the
registration statement or as having prepared any report for use in connection
with the registration statement.

On August 5, 2002, the Board of Directors of CD&L, Inc. (the "Company") and its
Audit Committee dismissed Arthur Andersen LLP ("Andersen") as the Company's
independent public accountants and engaged Deloitte & Touche LLP ("Deloitte") to
serve as the Company's independent public accountants for the balance of fiscal
year 2002. For additional information, see the Company's Current Report on Form
8-K filed with the Securities and Exchange Commission ("SEC") on August 9, 2002.

After reasonable efforts, the Company has been unable to obtain Andersen's
written consent to the incorporation by reference into the Company's
registration statements under the Securities Act of 1933, as amended: (File Nos.
333-3321, 333-3323 and 333-47357) and the related prospectuses (the
"Registration Statements") of Andersen's audit report with respect to the
Company's consolidated financial statements as of December 31, 2001 and for the
three years in the period then ended. Under these circumstances, Rule 437a under
the Securities Act permits the Company to file this Annual Report on Form 10-K,
which is incorporated by reference into the Registration Statements, without a
written consent from Andersen. As a result, with respect to transactions in the
Company's securities pursuant to the Registration Statements that occur
subsequent to the date this Annual Report on Form 10-K is filed with the
Securities and Exchange Commission, Andersen will not have any liability under
Section 11(a) of the Securities Act for any untrue statements of a material fact
contained in the financial statements audited by Andersen or any omissions of a
material fact required to be stated therein. Accordingly, you would be unable to
assert a claim against Andersen under Section 11(a) of the Securities Act.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24.1
<SEQUENCE>17
<FILENAME>b331333_ex24-1.txt
<DESCRIPTION>POWER OF ATTORNEY
<TEXT>
<PAGE>

                                                                    Exhibit 24.1

                                POWER OF ATTORNEY

         WHEREAS, the undersigned officers and directors of CD&L, Inc. (the
"Company") desire to authorize Albert W. Van Ness, Jr., and William T. Brannan
to act as their attorneys-in-fact and agents, for the purpose of executing and
filing the Company's Annual Report on Form 10-K, including all amendments
thereto;

         NOW, THEREFORE,

         KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Albert W. Van Ness, Jr., and William T.
Brannan and each of them, his true and lawful attorney-in-fact and agent, with
full power of substitution and re-substitution, to execute the Company's Annual
Report on Form 10-K, including any and all amendments and supplements thereto,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully and to all intents and purposes as he might
or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

         IN WITNESS WHEREOF, the undersigned have executed this power of
attorney in the following capacities as of the 14th day of April 2004.

<TABLE>
<CAPTION>
              SIGNATURE                                         TITLE
              ---------                                         -----
<S>                                               <C>
/s/ Albert W. Van Ness, Jr.                       Chairman of the Board, Chief Executive Officer and
---------------------------                       Director (Principal Executive Officer)
Albert W. Van Ness, Jr.

/s/ William T. Brannan                            President, Chief Operating Officer and Director
----------------------
William T. Brannan

/s/ Russell J. Reardon                            Vice President, Chief Financial Officer (Principal
----------------------                            Financial and Accounting Officer)
Russell J. Reardon

/s/ Michael Brooks                                Group Operations President and Director
------------------
Michael Brooks

/s/ Thomas E. Durkin                              Director
--------------------
Thomas E. Durkin

/s/ Jon F. Hanson                                 Director
-----------------
Jon F. Hanson

/s/ Marilu Marshall                               Director
-------------------
Marilu Marshall

/s/ Matthew Morahan                               Director
-------------------
Matthew Morahan

/s/ John Simourian                                Director
------------------
John Simourian

/s/ John S. Wehrle                                Director
------------------
John S. Wehrle

</TABLE>



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>18
<FILENAME>b331333_ex31-1.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.1
                            CERTIFICATION PURSUANT TO
                     EXCHANGE ACT RULES 13a-14a AND 15d-14a,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Albert W. Van Ness, Jr., certify that:

     (1)   I have reviewed this Annual Report on Form 10-K of CD&L, Inc.;

     (2)   Based on my knowledge, this Annual Report does not contain any untrue
           statement of a material fact or omit to state a material fact
           necessary to make the statements made, in light of the circumstances
           under which such statements were made, not misleading with respect to
           the period covered by this Annual Report;

     (3)   Based on my knowledge, the financial statements, and other financial
           information included in this Annual Report, fairly present in all
           material respects the financial condition, results of operations and
           cash flows of the registrant as of, and for, the periods presented in
           this Annual Report;

     (4)   The registrant's other certifying officer and I are responsible for
           establishing and maintaining disclosure controls and procedures (as
           defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant
           and have:

              (a)  Designed such disclosure controls and procedures, or caused
                   such disclosure controls and procedures to be designed under
                   our supervision, to ensure that material information relating
                   to the registrant, including its consolidated subsidiaries,
                   is made known to us by others within those entities,
                   particularly during the period in which this Annual Report is
                   being prepared;
              (b)  Evaluated the effectiveness of the registrant's disclosure
                   controls and procedures and presented in this Annual Report
                   our conclusions about the effectiveness of the disclosure
                   controls and procedures, as of the end of the period covered
                   by this Annual Report based on such evaluation; and
              (c)  Disclosed in this Annual Report any change in the
                   registrant's internal control over financial reporting that
                   occurred during the registrant's most recent fiscal quarter
                   that has materially affected, or is reasonably likely to
                   materially affect, the registrant's internal control over
                   financial reporting; and

     (5)   The registrant's other certifying officer and I have disclosed, based
           on our most recent evaluation of internal control over financial
           reporting, to the registrant's auditors and the audit committee of
           the registrant's board of directors (or persons performing the
           equivalent functions):

              (a)  All significant deficiencies and material weaknesses in the
                   design or operation of internal control over financial
                   reporting which are reasonably likely to adversely affect the
                   registrant's ability to record, process, summarize and report
                   financial information; and
              (b)  Any fraud, whether or not material, that involves management
                   or other employees who have a significant role in the
                   registrant's internal control over financial reporting.

Dated: April 14, 2004
                                                /s/ Albert W. Van Ness, Jr.
                                                ---------------------------
                                               Albert W. Van Ness, Jr.
                                               Chief Executive Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>19
<FILENAME>b331333_ex31-2.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 31.2
                            CERTIFICATION PURSUANT TO
                     EXCHANGE ACT RULES 13a-14a AND 15d-14a,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002


I, Russell J. Reardon, certify that:

     (1)   I have reviewed this Annual Report on Form 10-K of CD&L, Inc.;

     (2)   Based on my knowledge, this Annual Report does not contain any untrue
           statement of a material fact or omit to state a material fact
           necessary to make the statements made, in light of the circumstances
           under which such statements were made, not misleading with respect to
           the period covered by this Annual Report;

     (3)   Based on my knowledge, the financial statements, and other financial
           information included in this Annual Report, fairly present in all
           material respects the financial condition, results of operations and
           cash flows of the registrant as of, and for, the periods presented in
           this Annual Report;

     (4)   The registrant's other certifying officer and I are responsible for
           establishing and maintaining disclosure controls and procedures (as
           defined in Exchange Act Rules 13a-15e and 15d-15e) for the registrant
           and have:

              (a)  Designed such disclosure controls and procedures, or caused
                   such disclosure controls and procedures to be designed under
                   our supervision, to ensure that material information relating
                   to the registrant, including its consolidated subsidiaries,
                   is made known to us by others within those entities,
                   particularly during the period in which this Annual Report is
                   being prepared;
              (b)  Evaluated the effectiveness of the registrant's disclosure
                   controls and procedures and presented in this Annual Report
                   our conclusions about the effectiveness of the disclosure
                   controls and procedures, as of the end of the period covered
                   by this Annual Report based on such evaluation; and
              (c)  Disclosed in this Annual Report any change in the
                   registrant's internal control over financial reporting that
                   occurred during the registrant's most recent fiscal quarter
                   that has materially affected, or is reasonably likely to
                   materially affect, the registrant's internal control over
                   financial reporting; and

     (5)   The registrant's other certifying officer and I have disclosed, based
           on our most recent evaluation of internal control over financial
           reporting, to the registrant's auditors and the audit committee of
           the registrant's board of directors (or persons performing the
           equivalent functions):

              (a)  All significant deficiencies and material weaknesses in the
                   design or operation of internal control over financial
                   reporting which are reasonably likely to adversely affect the
                   registrant's ability to record, process, summarize and report
                   financial information; and
              (b)  Any fraud, whether or not material, that involves management
                   or other employees who have a significant role in the
                   registrant's internal control over financial reporting.

Dated: April 14, 2004
                                                 /s/ Russell J. Reardon
                                                 ----------------------
                                                 Russell J. Reardon
                                                 Chief Financial Officer



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>20
<FILENAME>b331333_ex32-1.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


           In connection with the Annual Report of CD&L, Inc. (the "Company") on
Form 10-K for the year ended December 31, 2003 filed with the Securities and
Exchange Commission (the "Report"), I, Albert W. Van Ness, Jr., Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

       (1) The Report fully complies with the requirements of Section 13(a) of
           the Securities Exchange Act of 1934; and

       (2) The information contained in the Report fairly presents, in all
           material respects, the consolidated financial condition of the
           Company as of the dates presented and the consolidated results of
           operations of the Company for the periods presented.

Dated: April 14, 2004


                                                  /s/ Albert W. Van Ness, Jr.
                                                  ---------------------------
                                                  Albert W. Van Ness, Jr.
                                                  Chief Executive Officer



              This certification has been furnished solely pursuant
                to Section 906 of the Sarbanes-Oxley Act of 2002.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>21
<FILENAME>b331333_ex32-2.txt
<DESCRIPTION>CERTIFICATION
<TEXT>
<PAGE>

                                                                    EXHIBIT 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


           In connection with the Annual Report of CD&L, Inc. (the "Company") on
Form 10-K for the year ended December 31, 2003 filed with the Securities and
Exchange Commission (the "Report"), I, Russell J. Reardon, Chief Financial
Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of Section 13(a) of the
         Securities Exchange Act of 1934; and

     (2) The information contained in the Report fairly presents, in all
         material respects, the consolidated financial condition of the Company
         as of the dates presented and the consolidated results of operations of
         the Company for the periods presented.

Dated: April 14, 2004


                                               /s/ Russell J. Reardon
                                               ----------------------
                                               Russell J. Reardon
                                               Chief Financial Officer





              This certification has been furnished solely pursuant
                to Section 906 of the Sarbanes-Oxley Act of 2002.



</TEXT>
</DOCUMENT>
</SUBMISSION>
