UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                    FORM 8-K

                                 CURRENT REPORT

    Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

                                December 8, 1998
                Date of Report (Date of earliest event reported)



                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
             (Exact name of Registrant as specified in its charter)


       Delaware                            0-26954             22-3350958
(State or other jurisdiction of        (Commission File       (IRS Employer
incorporation or organization)            Number)           Identification No.)



380 Allwood Road, Clifton, New Jersey                            07012 
(Address of principal executive offices)                       (Zip Code)


(Registrant's telephone number, including area code)         (973) 471-1005

                                 NOT APPLICABLE
      (Former name or former address,  if changed since last report.)



<PAGE>


ITEM 2.         Acquisition or Disposition of Assets

         On December 8, 1998, Consolidated Delivery & Logistics, Inc. ("CDL")
         entered into and consummated an agreement (the "Stock Purchase
         Agreement") with its subsidiary, National Express Company, Inc.
         ("National") and First Choice Courier and Distribution Systems, Inc.
         ("First Choice"), Regional Express II, Inc. ("RE II"), Regional Express
         III, Inc. ("RE III") and Manteca Enterprises, Inc. ("Manteca") and
         Terry Bozzay, Randy Cooper and Charles Walch, the shareholders of First
         Choice, RE II, RE III and Manteca, whereby National purchased all of
         the outstanding shares of the capital stock of First Choice, RE II,
         RE III and Manteca.

         The purchase price was comprised of approximately  $2.9 million in cash
         including  estimated  direct  acquisition  costs,  $1.4  million  in 7%
         subordinated  convertible  notes (the  "Notes")  and 206,185  shares of
         CDL's common  stock.  The Notes are due December 8, 2001 with  interest
         payable quarterly commencing February 28, 1999. At the option of either
         the holder or CDL,  under  certain  circumstances  fifty percent of the
         principal amount of the Notes are convertible into fully paid shares of
         CDL's  stock at a  conversion  price of $7 per  share.  The  Notes  are
         subordinate  to all existing or future senior debt of CDL. In addition,
         a  contingent  earn out in the  aggregate  amount of up to  $800,000 is
         payable  based on the  achievement  of certain  financial  goals by the
         newly  formed  division  during the three  year  period  following  the
         closing. CDL financed the acquisition using proceeds from its revolving
         credit facility with First Union Commercial Corporation.

         The description above of the Stock Purchase  Agreement and the Notes is
         a summary and does not purport to be complete. Reference should be made
         to the copies of such documents  filed as exhibits to this report for a
         complete description of their terms.

ITEM 7.         Financial Statements and Exhibits

                a.   Financial Statement of Business Acquired.

                It is impracticable to provide the required financial statements
                for First  Choice,  RE II, RE III and Manteca at this time.  The
                statements  will be filed as an amendment to this report on Form
                8-K as soon as they  are  prepared  and not  later  than 60 days
                after the deadline for filing this Form 8-K.

                b.   Pro Forma Financial Information

                It is  impracticable to provide the required pro forma financial
                statements  for First Choice,  RE II, RE III and Manteca at this
                time.  The  statements  will be  filed as an  amendment  to this
                report  on Form 8-K as soon as they are  prepared  and not later
                than 60 days after the deadline for filing this Form 8-K.


                c.   Exhibits

10.1            Stock Purchase Agreement dated December 8, 1998 by and among
                Consolidated Delivery & Logistics, Inc., National, First Choice,
                RE II, RE III, Manteca, Terry Bozzay, Randy Cooper and Charles
                Walch.


10.2            7% Subordinated Convertible Notes Due 2001 of Consolidated
                Delivery & Logistics, Inc.


99.1            Press Release issued December 9, 1998 regarding acquisition of
                First Choice, RE II, RE III, and Manteca.




<PAGE>



                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



Dated:   December 22, 1998             CONSOLIDATED DELIVERY & LOGISTICS, INC.
                                                   (Registrant)




                                       By:  /s/ Albert W. Van Ness, Jr.
                                            Albert W. Van Ness, Jr.
                                            Chairman of the Board, Chief
                                            Executive Officer and Chief
                                            Financial Officer



<PAGE>


Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

         STOCK PURCHASE AGREEMENT  ("Agreement"),  dated as of December 8, 1998,
by and among  CONSOLIDATED  DELIVERY & LOGISTICS,  INC., a Delaware  corporation
("CDL"),  NATIONAL EXPRESS COMPANY,  INC., a Missouri corporation  ("National"),
FIRST CHOICE  COURIER AND  DISTRIBUTION  SYSTEMS,  INC., a Missouri  corporation
("First Choice"),  REGIONAL EXPRESS II, INC., a Missouri  corporation ("RE II"),
REGIONAL  EXPRESS III,  INC.,  a Missouri  corporation  ("RE III"),  and MANTECA
ENTERPRISES,   INC.,  a  Missouri  corporation  ("Manteca"),  and  TERRY  BOZZAY
("Bozzay"),   RANDY  COOPER   ("Cooper"),   and  CHARLES  WALCH  ("Walch",   and
collectively with Bozzay and Cooper the "Shareholders").

                              W I T N E S S E T H:

         WHEREAS,  National is duly organized and existing under the laws of the
State  of  Missouri  and is a  wholly-owned  subsidiary  of CDL,  a  corporation
organized and existing under the laws of the State of Delaware; and

         WHEREAS,  each  of  First  Choice,  RE II,  RE  III  and  Manteca  is a
corporation  organized and existing under the laws of the State of Missouri (all
of  which  corporations  are  hereinafter   collectively   referred  to  as  the
"Company"); and

         WHEREAS, the Shareholders are all of the shareholders of First Choice;
and

         WHEREAS,  Terry Bozzay is the sole shareholder of each of RE II, RE III
and Manteca (all of the capital stock of each of which, along with that of First
Choice, is hereinafter collectively referred to as the "Company's Stock"); and

         WHEREAS, the Shareholders desire to sell and transfer to National,  and
National  desires  to  purchase  from the  Shareholders,  all of the  issued and
outstanding  shares of the Company's  Stock, all as more  specifically  provided
herein;

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
agreements,  representations,  warranties and covenants  contained  herein,  and
intending to be legally bound, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   The Merger

         Section 1.1 Delivery and Filing of Articles of Merger.  The  respective
Boards of Directors of National and RE II (which  corporations  are  hereinafter
collectively referred to as "Constituent  Corporations") have determined that it
is in the best interests of the Constituent  Corporations  and their  respective
shareholders  that RE II merge with and into National pursuant to this Agreement
and the  applicable  provisions  of the  laws of the  State  of  Missouri,  such
transaction sometimes being herein called the "Merger." The Merger is subject to
the  terms  and  conditions  of  this  Agreement  and  to  the  representations,
warranties and agreements  contained herein.  The Constituent  Corporations will
cause  Articles of Merger with respect to the Merger (the  "Articles of Merger")
to be signed, acknowledged and filed with the Secretary of State of the State of
Missouri.  The Constituent  Corporations  will also make all other filings to be
made with any  relevant  authority in the  jurisdiction  in which the Company is
organized, on or before the "Consummation Date" as defined in Article 4.

         Section 1.2 Effective Time of the Merger.  The  "Effective  Time of the
Merger"  shall be the time when the  Articles  of Merger are duly filed with the
Secretary of State of the state first set forth in Section 1.1 above.  National,
the party  surviving the Merger,  is  hereinafter  sometimes  referred to as the
"Surviving Corporation".

         Section 1.3 Articles of  Incorporation,  By-laws and Board of Directors
of Surviving  Corporation.  At the Effective Time of the Merger:

         (a) the Articles of Incorporation of National shall become the Articles
of Incorporation of the Surviving  Corporation;  and subsequent to the Effective
Time of the Merger,  such  Articles of  Incorporation  shall be the  Articles of
Incorporation of the Surviving Corporation until changed as provided by law;

         (b) the By-laws of National  shall become the By-laws of the  Surviving
Corporation;  and subsequent to the Effective  Time of the Merger,  such By-laws
shall be the By-laws of the Surviving Corporation until they shall thereafter be
duly amended;

         (c) the  directors of National  shall serve as the members of the Board
of  Directors  of the  Surviving  Corporation.  The  Board of  Directors  of the
Surviving Corporation shall hold office subject to the provisions of the laws of
the State of Missouri  and of the Articles of  Incorporation  and the By-laws of
the Surviving Corporation; and

         (d) the  persons  who  shall  serve as the  officers  of the  Surviving
Corporation are the current officers of National in their current capacity. Each
officer shall hold office and serve,  subject to the  provisions of the Articles
of Incorporation and the By-Laws of the Surviving Corporation,  until his or her
successor is elected and  qualified.  The Board of  Directors  of the  Surviving
Corporation  shall designate such  additional  officers as it deems necessary in
its discretion.

         Section 1.4 Certain  Information  With Respect to the Capital  Stock of
the Company and National. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of RE II and
National as of the date of this Agreement are as follows:

         (a)      the  authorized  capital  stock of RE II consists  of 30,000  
shares of common  stock,  $1.00 par value of which 1,000 shares are issued and
outstanding,

         (b) the authorized  capital stock of National  consists of 55 shares of
common  stock,  no par value,  of which 55 shares  are  issued  and  outstanding
("National Stock").

         Section 1.5 Effect of Merger.  Except as herein specifically set forth,
the identity,  existence,  purposes,  powers, objects,  franchises,  privileges,
rights and immunities of RE II shall  continue  unaffected and unimpaired by the
Merger  and the  corporate  franchises,  existence  and rights of RE II shall be
merged into National, and National, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time of the Merger, the separate existence of
RE II shall  cease and,  in  accordance  with the terms of this  Agreement,  the
Surviving Corporation shall possess all the rights,  privileges,  immunities and
franchises,  of a public as well as of a private nature; and all property, real,
personal  and  mixed,  and  all  debts  due  on  whatever   account,   including
subscriptions  to shares,  and all other  choices  in action,  and all and every
other interest of or belonging to or due to RE II and to National shall be taken
and deemed to be  transferred  to, and  vested  in,  the  Surviving  Corporation
without further act or deed; and all property, rights and privileges, powers and
franchises  and all and every other  interest shall be thereafter as effectually
the property of the  Surviving  Corporation  as they were of RE II and National.
The Surviving  Corporation  shall  thenceforth be responsible and liable for all
the liabilities and obligations of RE II and National and any claim existing, or
action or proceeding  pending, by or against RE II or National may be prosecuted
as if the  Merger  had not taken  place,  or the  Surviving  Corporation  may be
substituted in its place. Neither the rights of creditors nor any liens upon the
property of RE II or of National shall be impaired by the Merger, and all debts,
liabilities  and duties of RE II and of National  shall attach to the  Surviving
Corporation, and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.

         Section 1.6 Manner of  Conversion.  The manner of converting the shares
of RE II Stock issued and outstanding immediately prior to the Effective Time of
the Merger into restricted  shares of common stock of CDL, $.001 par value ("CDL
Stock"), shall be as follows:

         As of the  Effective  Time of the  Merger,  subject  to the  terms  and
conditions of this Agreement,  by virtue of the Merger and without any action on
the part of any Constituent Corporation or of their respective shareholders:

                  (i)......all  of the  shares  of the RE II  Stock  issued  and
outstanding  immediately  prior to the Effective  Time of the Merger  shall,  by
virtue of the Merger and without any action on the part of the holder thereof or
any Constituent Corporation,  automatically be converted in the aggregate into a
number of restricted voting shares of common stock of CDL, $.001 par value ("CDL
Stock"), with a value equal to Fair Value of $600,000,  which shall be delivered
to Bozzay, as the sole shareholder of RE II at the Closing. For purposes of this
Section,  the term "Fair  Value"  shall mean  $2.91,  the average of the closing
prices of the common  stock of CDL as  reported  on the NASDAQ  National  Market
System for the five (5)  trading  days  ending on the second  (2nd)  trading day
prior to October 30, 1998; and

                  (ii).....each  share of National Stock issued and  outstanding
immediately  prior to the Effective  Time of the Merger shall,  by virtue of the
Merger  and  without  any  action  on the  part  of the  holder  thereof  or any
Constituent Corporation,  remain issued and outstanding and shall constitute all
of the issued and outstanding  shares of the Surviving  Corporation  immediately
after the Effective Time of the Merger.

                                   ARTICLE II

                           Purchase and Sale of Stock;
                              Additional Covenants

         Section 2.1.  Purchase and Sale of Stock. Upon the terms and subject to
the  conditions  of this  Agreement  and on the  basis  of the  representations,
warranties  and  agreements  contained  herein,  at the  Closing  (as defined in
Article IV), the Shareholders shall sell, assign,  transfer,  convey and deliver
to  National  all of the  issued  and  outstanding  shares of the Stock of First
Choice,  RE III and Manteca,  and National  shall  purchase such shares from the
Shareholders.

         Section 2.2. Purchase Price. The aggregate  purchase price of the Stock
of First  Choice,  RE III and Manteca  shall be  allocated  among the issued and
outstanding shares of First Choice, RE III and Manteca as follows:

         (a)  The  following   aggregate   consideration   for  the  issued  and
outstanding  shares of First Choice shall be allocated among the Shareholders as
set forth in Exhibit A and payable in three parts as follows:

                  (i)......$1,330,122  shall be paid at the  Closing  in cash by
wire  transfer  to an  account  or accounts  of the  Shareholders  specified  in
writing  by the  Shareholders  or by one or more  certified  or bank cashier's 
checks payable to the order of the Shareholders;

                  (ii).....$1,400,000  shall be paid at the  Closing by delivery
of subordinated unsecured convertible balloon notes of CDL with a three (3) year
term payable to the  Shareholders  substantially in the form of Exhibit B hereto
(the "Notes"); and

                  (iii)....78.9634  percent of the contingent  earn out payments
described  in Section  2.2(c)  below shall be paid to the  Shareholders,  in the
proportions  set forth in Exhibit A, subject to the  conditions and at the times
provided therein.

         (b)  The  following   aggregate   consideration   for  the  issued  and
outstanding  shares  of RE III and  Manteca  shall be  payable  in two  parts as
follows:

                  (i)......$1,476,843  shall be paid at the  Closing  in cash by
wire transfer to an account or accounts of Bozzay specified in writing by Bozzay
or by one or more  certified or bank  cashier's  checks  payable to the order of
Bozzay; and

                  (ii).....21.0366  percent of the contingent  earn out payments
described  in  Section  2.2(c)  below  shall be paid to  Bozzay  subject  to the
conditions and at the times provided therein.

         (c) For  purposes of this  Section,  any  contingent  earn out payments
shall be determined and paid in accordance with the following provisions:

                  (i) First  Period  Earn Out. On or before the date ninety (90)
days after the end of the First Measurement Period, CDL shall determine the EBIT
of the Division for the First Measurement Period. If such EBIT exceeds $640,000,
CDL shall pay to the  Shareholders  in the aggregate not later than 5 days after
such date an earn out payment  equal to  $1,500.00  for each $1,000 by which the
EBIT exceeds such $640,000; provided, however that such earn out payment for the
First Measurement Period shall in no event exceed $240,000.

                  (ii) Second Period Earn Out. On or before the date ninety (90)
days after the end of the Second  Measurement  Period,  CDL shall  determine the
EBIT of the Division  for the Second  Measurement  Period.  If such EBIT exceeds
$850,000,  CDL shall pay to the  Shareholders  in the aggregate not later than 5
days after such date an earn out payment  equal to $1,866.67  for each $1,000 by
which the EBIT  exceeds  such  $850,000;  provided,  however  that such earn out
payment for the Second Measurement Period shall in no event exceed $280,000.

                  (iii) Third Period Earn Out. On or before the date ninety (90)
days after the end of the Third Measurement Period, CDL shall determine the EBIT
of the  Division  for  the  Third  Measurement  Period.  If  such  EBIT  exceeds
$1,050,000,  CDL shall pay to the Shareholders in the aggregate not later than 5
days after such date an earn out payment  equal to $1,866.67  for each $1,000 by
which the EBIT exceeds  such  $1,050,000;  provided,  however that such earn out
payment for the Third Measurement Period shall in no event exceed $280,000.

                  (iv)     General Earn Out Provisions.

                  (A) CDL shall cause the books and  records of the  Division to
be  maintained  as a separate  profit  center  during each earn out  Measurement
Period,  so that any amounts due as earn out  payments  pursuant to this Section
can be determined.  The EBIT for each Measurement  Period shall be determined in
accordance  with GAAP  consistently  applied and  consistent  with CDL's regular
audited  financial  reports  required to be provided  with its SEC filings.  The
determination  for EBIT for each  Measurement  Period shall initially be made by
CDL.  At the same time as payment of the earn out  payment  for any  Measurement
Period is made (or if no earn out payment is made for a Measurement Period, then
at the same time such earn out payment would have been due for such  Measurement
Period if one was made),  CDL shall deliver  statements,  in reasonable  detail,
detailing the calculation of the EBIT for such period and the calculation of the
earn out payment,  if any, for such period, all certified by the Chief Financial
Officer  of  CDL.  Each  Shareholder  shall  have  15  days  to  object  to such
calculation. If no objection is made, CDL's calculation shall be deemed correct.
If objection is made,  CDL will make all work papers,  personnel and  applicable
books and records available to the objecting  Shareholders and their accountants
for review at reasonable  times and on reasonable  notice.  If the  Shareholders
believe that CDL's calculation was incorrect, to the extent possible, they shall
state in a non-binding writing the amount of the earn out they believe they were
entitled  to, and the basis for such belief in  reasonable  detail.  CDL and the
Shareholders then shall negotiate in good faith for a period of at least 30 days
from  the  receipt  of  both  the  objection  notice  and  the  claimed  correct
calculation from Shareholders, in an attempt to agree on an earn out payment for
such period.  If the parties  cannot reach such  agreement,  they shall choose a
"Big 5" independent  accounting firm (the  "Determining  Firm") to determine the
earn out amount.  The  Determining  Firm shall  determine the earn out amount as
expeditiously  as possible,  and such  determination  shall be final and binding
upon the parties. The parties shall bear their own costs and expenses except for
the fees of the Determining  Firm. The fees and expenses of the Determining Firm
shall be paid as follows:  (x) if the final earn out payment is equal to or less
than  the  earn  out  payment  initially  calculated  by CDL,  then the fees and
expenses of the Determining Firm shall be paid by the  Shareholders,  (y) if the
final earn out payment is equal to or more than the earn out  payment  initially
claimed by the Shareholders,  then CDL shall pay all of the fees and expenses of
the  Determining  Firm and (z) if the final earn out  payment  is between  CDL's
initial calculation and the Shareholders' initial calculation, CDL shall pay 50%
of the fees of the Determining Firm and the Shareholders shall pay 50%. Any fees
and  expenses  paid  by  the  Shareholders   shall  be  payable  only  by  those
Shareholders actually challenging the CDL earn out calculation, and then payable
by  the  percentage  of  the  earn  out  payments  to  all  of  the  challenging
Shareholders that each such challenging Shareholder receives.

                  (B) In the event that the earn out payment for any Measurement
Period is limited by the maximum  payment  allowed for that  Measurement  Period
(i.e.,  $240,000 for the First Measurement  Period), the excess EBIT (i.e., EBIT
above the EBIT needed to earn the  maximum  earn out payment for the period) may
be credited to the  immediately  prior or subsequent  Measurement  Period to the
extent that the earn out payments for such other  Measurement  Period or Periods
shall not have exceeded the respective  maximum payments allowable in such other
Measurement Period or Periods.

                  (C) Any  earn out  payments  shall be  allocated  pursuant  to
Sections  2.2(a)(iii)  and  2.2(c)(ii),  and,  to the  extent  allocated  to the
Shareholders, among the Shareholders in accordance with Exhibit A.

                  (D) If the maximum of earn out  payments  are  achieved  for a
Measurement  Period,  then  non-qualified  stock options shall be granted to the
Shareholders  and  certain  other  persons  to  the  extent  provided  in  their
respective employment agreements with National referred to in Section 10.2.

                                   ARTICLE III

                            Requirements of Delivery

         The Shareholders shall deliver to CDL, at the Closing, the certificates
representing the Company's Stock,  with transmittal  letters in form approved by
CDL duly executed by the Shareholders,  and with all necessary  transfer tax and
other  revenue  stamps,  acquired  at the  Shareholders'  expense,  affixed  and
canceled.  The Shareholders agree promptly to cure any deficiencies with respect
to the documents of conveyance with respect to the Company's Stock.

                                   ARTICLE IV

                                     Closing

         The closing of the transactions  contemplated by this Agreement (herein
referred  to as the  "Closing")  shall  take  place  by  exchange  of  facsimile
signature  pages or at the  offices of CDL at 380  Allwood  Road,  Clifton,  New
Jersey 07012 on December 8, 1998 at 11:00 a.m. or at such other time and date as
National, CDL, the Company and the Shareholders,  may mutually agree, which date
shall be referred to as the "Closing Date".

                                    ARTICLE V

                               Certain Definitions

         Section 5.1.......Certain  Definitions. As  used  in  this  Agreement,
the  following  terms  have  the respective meanings set forth below.

         "Accounts Receivable" has the meaning ascribed to such term in
Section 6.19.

         "Affiliate"  means,  with  respect to any Person,  any other Person who
directly  or  indirectly,  through  one or  more  intermediaries,  controls,  is
controlled by, or is under common control with, such Person.  The term "control"
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the  management and policies of a Person,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise,  and the  terms
"controlled" and "controlling" have meanings correlative thereto.

         "Agreement" means this Stock Purchase Agreement.

         "Authorizations" has the meaning ascribed to such term in Section 6.10.

         "Business Day" means a day,  other than a Saturday or Sunday,  on which
commercial banks in New Jersey are open for the general transaction of business.

         "CDL Stock" has the meaning ascribed to such term in Section 2.2.

         "Closing" has the meaning ascribed to such term in Article IV.

         "Closing Date" has the meaning ascribed to such term in Article IV.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company's Accountants" means Larson, Allen and Weishar.

         "Company's Stock" has the meaning ascribed to such term in the recitals
to this Agreement.

         "Contracts" has the meaning ascribed to such term in Section 6.20.

         "Corporate  Overhead" means any cost,  liability or expense incurred by
CDL to own, control,  govern,  administer,  finance, assist or otherwise oversee
its and its  subsidiaries  operating  businesses that is not attributable to the
day to day  operations  of the Division.  Corporate  Overhead  includes  without
limitation  any inter company  allocation  formula,  fee for services or similar
arrangement  whereby  the  Division  incurs an expense  or charge  for  overhead
incurred or services or other  consideration  provided by CDL that is not a cost
of  operating  the  Division.  It  does  not  include  compensation  paid to the
Shareholders and other employees with responsibility for managing the day to day
operations of the Division.

         "Damages" has the meaning ascribed to such term in Section 11.2.

         "Division"  means the former  business of the Company and the St. Louis
operation of National, as collectively operated by National after the Closing as
a separate profit center.

         "EBIT" means earnings before interest and taxes, computed in accordance
with Section  2.2(c)(iv)(A);  provided,  however, that any post-Closing goodwill
amortization  as a result of the  transactions  contemplated  by this  Agreement
shall  be  excluded.   Any  pre-Closing  goodwill  and  other  amortization  and
depreciation shall be included in such computation. Corporate Overhead shall not
be expensed or otherwise  deducted  from earnings in the EBIT  calculation.  Any
amortization and depreciation on assets held by the Company immediately prior to
the  Closing  based on  historic  cost  shall be  treated  as an expense in such
calculation. If CDL or National acquires any entity (or the assets thereof) (the
"Target"),  and if the Target is not to be operated as a separate profit center,
but rather,  with the mutual  consent of the parties,  is to have its operations
integrated  into the Division  and managed by Bozzay,  then the  thresholds  for
reaching each Earn-Out  Payment shall be increased by the EBIT  projections  for
such  Target  (with such  projections  being  those used by CDL or  National  in
determining  the purchase price for the Target) and the EBIT of such Target will
be included in the EBIT calculation for the Division.  If on the other hand, the
Target is to be operated as a separate  profit  center,  but is to be managed by
the  Division  and by Bozzay,  then EBIT  arising  from such  Target will not be
included  in the EBIT  calculation  for the  Division,  but the  expenses of the
Division in operation  the Target  shall be allocated to the Target  pursuant to
CDL's customary  accounting practices and such expenses shall not be included in
the EBIT calculation of the Division.

         "Employee Benefit Plan" has the meaning ascribed to such term in
Section 6.17.

         "Encumbrances" has the meaning ascribed to such term in Section 6.3.

         "Environmental  Laws" means any federal,  state or local law,  statute,
ordinance, rule, regulation, license, permit, authorization,  approval, consent,
court order, judgment, decree,  injunction,  code, requirement or agreement with
any Governmental Authority, (x) relating to pollution (or the cleanup thereof or
the filing of information with respect thereto),  human health or the protection
of air, surface water, ground water, drinking water supply, land (including land
surface or subsurface),  plant and animal life or any other natural resource, or
(y)  concerning  exposure  to,  or  the  use,  storage,  recycling,   treatment,
generation,  transportation,   processing,  handling,  labeling,  production  or
disposal  of  Regulated  Substances,  in  each  case  as  amended  and as now or
hereafter in effect.  The term Environmental Law includes,  without  limitation,
(i) the Comprehensive  Environmental  Response Compensation and Liability Act of
1980, the Water  Pollution  Control Act, the Clean Air Act, the Clean Water Act,
the Solid Waste Disposal Act (including the Resource  Conservation  and Recovery
Act of 1976 and the  Hazardous and Solid Waste  Amendments  of 1984),  the Toxic
Substances  Control Act, the  Insecticide,  Fungicide and  Rodenticide  Act, the
Occupational  Safety  and  Health  Act of 1970,  each as  amended  and as now or
hereafter in effect, and (ii) any common law or equitable  doctrine  (including,
without  limitation,  injunctive  relief and tort  doctrines such as negligence,
nuisance,   trespass  and  strict   liability)  that  may  impose  liability  or
obligations  for  injuries  or damages due to or  threatened  as a result of the
presence of, exposure to, or ingestion of, any Regulated Substance.

         "Financial Statements" has the meaning ascribed to such term in 
Section 6.8.

         "First  Measurement  Period"  shall  mean the  period  of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the Closing Date.

         "GAAP" means generally accepted  accounting  principles as in effect in
the United States on the date of this Agreement.

         "Governmental   Authority"   means  any   national,   federal,   state,
provincial,  county, municipal or local government,  foreign or domestic, or the
government of any political subdivision of any of the foregoing,  or any entity,
authority,   agency,  ministry  or  other  similar  body  exercising  executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to  government,  including any authority or other  quasi-governmental
entity established to perform any of such functions.

         "Indemnified Party" has the meaning ascribed to such term in
Section 11.2.

         "Indemnifying Party" has the meaning ascribed to such term in 
Section 11.2

         "Leased Real Property" has the meaning ascribed to such term in
Section 6.7.

         "Material  Adverse  Change"  means a  material  adverse  change  in the
business, financial condition, results of operations or prospects (financial and
other) of the entity.

         "Material  Adverse  Effect"  means a  material  adverse  effect  on the
business, financial condition or results of operations of the entity. Any matter
or matters which in the aggregate involve $25,000 or more shall presumptively be
deemed to be material.

         "Person" means an  individual,  partnership,  corporation,  joint stock
company,  unincorporated organization or association, trust or joint venture, or
a governmental agency or political subdivision thereof.

         "Proprietary Rights" means all patents,  patent  registrations,  patent
applications,   trademarks,   service   marks,   trademark   and  service   mark
registrations and applications therefor,  copyrights,  copyright  registrations,
copyright  applications,  technology,  inventions,  computer software,  data and
documentation   (including   electronic   media)  (other  than   shrink-wrap  or
off-the-shelf  software and  accompanying  data and  documents),  trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information  or  rights  related  to or used  in the  conduct  of the  Company's
business;  and permits,  licenses or other  agreements  to or from third parties
regarding the foregoing.

         "Regulated  Substances"  means pollutants,  contaminants,  hazardous or
toxic  substances,  compounds  or  related  materials  or  chemicals,  hazardous
materials,  hazardous waste, flammable explosives (including, but not limited to
radon,  radioactive materials,  asbestos,  urea formaldehyde foam insulation and
polychlorinated  biphenyls),   medical  waste  or  by-products,   petroleum  and
petroleum products (including, but not limited to, waste petroleum and petroleum
products) as regulated under applicable Environmental Laws.

         "SEC" means the Securities and Exchange Commission.

         "SEC Documents" has the meaning ascribed to such term in Section 9.7.

         "Second  Measurement  Period"  shall  mean the  period of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the first anniversary of the Closing Date.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Survival Period" has the meaning ascribed to such term in
Section 11.1.

         "Third  Measurement  Period"  shall  mean the  period  of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the second anniversary of the Closing Date.

         "Third Party Claim" has the meaning ascribed to such term in
Section 11.3.

         Section  5.2.......Interpretation.  Unless  otherwise  indicated to the
contrary  herein  by the  context  or use  thereof:  (i)  the  words,  "herein,"
"hereto,"  "hereof"  and words of similar  import  refer to this  Agreement as a
whole  and  not to any  particular  Section  or  paragraph  hereof;  (ii)  words
importing  the  masculine  gender  shall also  include the  feminine and neutral
genders,  and vice versa;  (iii) words importing the singular shall also include
the plural,  and vice versa; (iv) the word "Company" shall include each of First
Choice, RE II, RE III and Manteca individually as well as collectively;  and (v)
the  word  "Shareholders"  shall  include  each  of  Bozzay,  Cooper  and  Walch
individually as well as collectively.

                                   ARTICLE VI

              Representations and Warranties Regarding the Company

         Each Company and its Shareholders, jointly and severally, represent and
warrant (it being expressly  understood that the  representations and warranties
of Cooper  and Walch  herein  shall  pertain  solely to First  Choice,  the term
"knowledge  of the  Shareholders"  is limited in the case of Cooper and Walch to
their knowledge of First Choice, and the representations and warranties of First
Choice  pertain  only to itself,  and no other  Company) to National  and CDL as
follows:

         Section  6.1.......Organization  and Qualification of the Company.  The
Company is a corporation  duly organized,  validly existing and in good standing
under the laws of the State of Missouri, with full corporate power and authority
to own or lease  its  properties  and  assets  and to carry on its  business  as
presently  conducted,  and  is  duly  qualified  to  do  business  as a  foreign
corporation and is in good standing in each jurisdiction listed in Schedule 6.1,
which  constitute  all of the  jurisdictions  in which the Company is  currently
conducting its business. The Company has previously provided to National and CDL
true and complete copies of (i) its Articles of Incorporation and all amendments
thereto,  and  (ii)  its  by-laws  and all  amendments  thereto.  Other  than as
indicated  on  Schedule  6.1 the  business of the  Company is  conducted  solely
through the Company and the Company does not own,  directly or  indirectly,  any
subsidiaries.

         Section  6.2.......Authorization.   The  Company  has  full  power  and
authority,  corporate  and other,  to execute and deliver this  Agreement and to
perform its obligations hereunder, all of which have been duly authorized by all
requisite  corporate action.  This Agreement has been duly authorized,  executed
and delivered by the Company and  constitutes  a valid and binding  agreement of
the Company, enforceable against the Company in accordance with its terms.

         Section  6.3.......Non-contravention.  Except as set forth in  Schedule
6.3, neither the execution and delivery of this Agreement nor the performance by
the Company of its  obligations  hereunder  will (i)  contravene  any  provision
contained in its Articles of Incorporation or by-laws, (ii) violate or result in
a breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default under (A) any contract, agreement,  commitment,  indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation
or (B) any judgment, order, decree, law, rule or regulation or other restriction
of any Governmental  Authority,  in each case to which the Company is a party or
by which it is bound or to which any of its assets or  properties  are  subject,
(iii) result in the creation or imposition of any lien, claim, charge, mortgage,
pledge,   security   interest,   equity,   restriction   or  other   encumbrance
(collectively, "Encumbrances") on any of the assets or properties of the Company
if such Encumbrance  would have a Material Adverse Effect, or (iv) result in the
acceleration  of, or permit any Person to  accelerate or declare due and payable
prior to its stated maturity, any liability.

         Section 6.4.......No Consents.  Except as set forth in Schedule 6.4, no
notice to, filing with, or authorization,  registration,  consent or approval of
any  Governmental  Authority  or other Person is  necessary  for the  execution,
delivery  or  performance  of  this  Agreement  or  the   consummation   of  the
transactions contemplated hereby by the Company.

         Section  6.5.......Capitalization.   The  respective  designations  and
numbers of  authorized  and issued and  outstanding  shares and voting rights of
each class of outstanding capital stock of the Company are as follows:

                           (a) the  authorized  capital  stock of  First  Choice
                  consists of 30,000 shares of common stock,  $1.00 par value of
                  which 10,000 shares are issued and outstanding,

                           (b) the authorized capital stock of RE II consists of
                  30,000 shares of common stock,  $1.00 par value of which 1,000
                  shares are issued and outstanding,

                           (c) the  authorized  capital stock of RE III consists
                  of 30,000 shares of common stock, $1.00 par value of which 100
                  shares are issued and outstanding, and

                           (d) the authorized  capital stock of Manteca consists
                  of 30,000 shares of common stock, $1.00 par value of which 100
                  shares are issued and outstanding.

The Company does not have any shares of its capital stock  reserved for issuance
and the Company does not have any outstanding options,  warrants,  rights, calls
or commitments  relating to its capital stock or any  outstanding  securities or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire from it, any shares of its capital stock.  There are
no  pre-emptive or other  subscription  rights with respect to any shares of the
capital stock of the Company and all of the issued and outstanding shares of the
capital  stock of the Company have been duly  authorized,  validly  issued,  are
fully paid and are nonassessable.

         Section  6.6.......Personal  Property.  Except as set forth in Schedule
6.6, as disclosed in detail in the Financial Statements,  or liens for taxes not
yet due,  the Company has good and  marketable  title to (or valid  leasehold or
contractual  interests in) all personal property used in its business,  free and
clear  of any  Encumbrances.  To the  Shareholders'  knowledge,  all  machinery,
equipment,  furniture, fixtures and other personal property of the Company is in
good  operating  condition  and fit for  operation  in the  ordinary  course  of
business (subject to normal wear and tear).

         Section  6.7.......Real  Property.  The  Company  does not own any real
property or real  estate.  Except as set forth in Schedule  6.7, the Company has
valid  leasehold title to all real estate and real property used in its business
(the "Leased Real Property"),  free and clear of all  Encumbrances.  All plants,
structures  and  buildings  leased  by of  the  Company  are in  good  operating
condition and fit for operation in the ordinary  course of business  (subject to
normal wear and tear).  The Company has  delivered  to National and CDL true and
complete  copies of any leases for the Leased Real  Property.  The Company is in
compliance  with all material terms and conditions of such leases and is subject
to no past due  obligations or contingent  liabilities in respect of such leased
premises.  To the  best  knowledge  of the  Company  and the  Shareholders,  the
landlords under such leases also are in compliance with the terms and conditions
of such  leases.  The  Company  is not in  violation  of any  building,  zoning,
anti-pollution,   health,   occupational  safety  or  other  law,  ordinance  or
regulation  regarding its plants,  structures and equipment or their operations.
To the extent that the Company is a tenant under a month-to-month  or oral lease
with respect to the Spencer Place  property  identified on Schedule 6.7,  Bozzay
will assure (a) that the Company will be  permitted  to remain in such  premises
after  Closing for a reasonable  period of time not to exceed 90 days,  (b) that
the rental for such  properties  will at no time exceed a fair market rental and
(c) that the Company will have no liability to the landlord  upon a  termination
of such lease or for any other costs associated with the premises except for any
damages  actual  caused by the  Purchaser  between the Closing Date and the date
that the Purchaser vacates the property.

         Section 6.8.  Financial  Statements.  (a) Each  Company has  previously
delivered  to National and CDL (i) a true and  complete  copy of each  Company's
audited  balance sheet and the related  audited  statements of earnings and cash
flows for the  fiscal  years then  ended,  with  notes  thereto,  audited by the
Company's Accountants,  as listed on Schedule 6.8 (collectively,  the "Financial
Statements").  The Financial  Statements  have been prepared in conformity  with
GAAP,  applied on a  consistent  basis  throughout  the  respective  periods and
present fairly the financial  condition and results of operations of the Company
as of and for the periods included therein.

         (b) Within  fifteen  (15) days of the date  hereof,  the Company  shall
deliver to CDL and National a true and complete copy of each Company's unaudited
balance  sheet as of the Closing Date and the related  unaudited  statements  of
earnings  and cash  flows for the  eleven  (11)  months  and 8 days then  ended,
certified by the Company's chief financial officer

         Section 6.9.......Absence of Certain Developments.  Except as set forth
in Schedule 6.9, since the date of the most recent audited Financial  Statements
of each  Company,  there  has not  been  any  Material  Adverse  Change,  or any
development  which  could  reasonably  be  expected  to result in a  prospective
Material Adverse Change.  Except as set forth in Schedule 6.9, since the date of
the most recent audited Financial  Statements of each Company,  each Company has
conducted its businesses in the ordinary and usual course  consistent  with past
practices and has not (i) sold, leased, transferred or otherwise disposed of any
of its assets  (other  than  dispositions  in the  ordinary  course of  business
consistent  with past  practices),  (ii) breached,  terminated or amended in any
material  respect any contract or lease to which it is a party or to which it is
bound or to which its  properties  are  subject,  (iii)  amended its Articles of
Incorporation or by-laws or taken any action in contemplation of an amendment to
such Articles of Incorporation or by-laws or in contemplation of its liquidation
or  dissolution  and, to its best  knowledge  after due  investigation,  no such
action has been taken by its shareholders,  directors or officers, (iv) declared
or paid any dividend or  distribution  on its capital  stock or  repurchased  or
otherwise  acquired  any shares of its  capital  stock or any  option,  warrant,
right,  call or  commitment  relating  to its capital  stock or any  outstanding
securities or obligations  convertible  into or exchangeable  for, or giving any
Person any right to subscribe  for or acquire from it, any shares of its capital
stock,  (v) suffered any material  loss,  damage or  destruction  whether or not
covered  by  insurance,  (vi)  made any  change  in the  accounting  methods  or
practices  it follows,  whether for general  financial  or tax  purposes,  (vii)
incurred any liabilities (other than in the ordinary course of business) none of
which, individually or in the aggregate, are material, (viii) incurred,  created
or suffered to exist any Encumbrances on its assets, except those created in the
ordinary  course of business,  none of which,  individually or in the aggregate,
are material,  (ix) increased the  compensation  payable or to become payable to
any of its  officers or employees or  increased  any bonus,  severance,  accrued
vacation,  insurance,  pension  or  other  Employee  Benefit  Plan,  payment  or
arrangement made by it for or with any such officers or employees,  (x) suffered
any labor dispute,  strike or other work stoppage, (xi) made or obligated itself
to make any capital  expenditures  in excess of $10,000  individually  or in the
aggregate,  (xii) entered into any contract or other  agreement  requiring it to
make payments in excess of $10,000 per annum,  individually or in the aggregate,
other than in the ordinary  course of business  consistent  with past practices,
(xiii)  made  any  payments  to  or  entered  into  any  transactions  with  any
Shareholder or family member of any Shareholder  except for salaries paid to the
Shareholders  consistent with their historic salaries and the budgets previously
delivered  to  CDL,  (xiv)  breached  or  violated  any  law,  statute,  rule or
regulation  applicable  to the Company or its business in any material  respect,
(xv) suffered any Material Adverse Changes in its financial  position or results
of operations, or (xvi) entered into any agreement to do any of the foregoing.

                  Section  6.10.  Governmental  Authorizations;   Licenses.  The
business  of the  Company has been  operated  in  material  compliance  with all
applicable laws, rules,  regulations,  codes,  ordinances,  orders, policies and
guidelines of all Governmental Authorities,  including but not limited to, those
related  to:  pricing,  sales or  distribution  of  products,  antitrust,  trade
regulation, trade practices,  sanitation, land use and similar laws. The Company
has all  permits,  licenses,  approvals,  certificates,  titles,  fuel  permits,
franchises,  operating authorities (including any necessary FAA or ICC operating
authorities),  state operating licenses or registrations and other interstate or
intrastate  regulatory  licenses  and  other  authorizations,  and has  made all
notifications,  registrations,  certifications and filings with all Governmental
Authorities,  necessary  or  advisable  for the  operation  of the  business  as
currently conducted by the Company,  except for those which,  individually or in
the aggregate  could not reasonably be expected to result in a Material  Adverse
Effect.  There is no action, case or proceeding pending or, to the Shareholders'
or the  Company's  knowledge,  threatened  by any  Governmental  Authority  with
respect  to  (i)  any  alleged  violation  by the  Company  of  any  law,  rule,
regulation,  code,  ordinance,  order,  policy or guideline of any  Governmental
Authority,  or (ii) any  alleged  failure  by the  Company  to have any  permit,
license,  approval,  certification or other authorization required in connection
with the operation of the business.  No notice of any violation of such laws has
been  received by the Company or the  Shareholders.  Schedule  6.10 sets forth a
true and complete list of all of the  Company's  permits,  licenses,  approvals,
certificates,  registrations and other  authorizations  relating to the business
(the  "Authorizations").  Such  Authorizations  are in full force and effect and
neither the Company  nor the  Shareholders  have  received  notification  of the
suspension or cancellation of, or the intent to cancel,  terminate or not renew,
any thereof.

         Section  6.11......Litigation.  Except as set forth in  Schedule  6.11,
there are no lawsuits, actions, proceedings, claims, orders or investigations by
or before any Governmental Authority pending or, to the knowledge of the Company
or the Shareholders,  threatened against the Company or its Affiliates  relating
to such  Company,  its business or any product or service which has been sold by
such Company or seeking to enjoin the transactions contemplated hereby.

         Section 6.12......Undisclosed  Liabilities.  Other than those reflected
in the Financial  Statements or Schedule  6.12 to this  Agreement,  there are no
liabilities  of the Company of any kind or nature  whatsoever,  whether known or
unknown, absolute, accrued, contingent or otherwise, or whether due or to become
due,  other than  liabilities  incurred in the  ordinary  course of business and
consistent with past practices since the date of the Financial  Statements,  and
there exists no facts or circumstances  (other than general economic conditions)
that could reasonably be expected to result in any such liability.

         Section 6.13......Taxes.  All federal, state, county, local and foreign
tax returns  and reports of the Company  required to be filed have been duly and
timely  filed.  There are no  examinations  in  progress  or claims  against the
Company for  federal,  state,  local and other taxes  (including  penalties  and
interest)  for any  period or  periods  and no  notice  of any claim for  taxes,
whether  pending or threatened has been received.  All federal,  state,  county,
local,  foreign  and any other taxes  (including  all  income,  withholding  and
employment  taxes),  assessments  (including  interest  and  penalties),   fees,
interest,   penalties  and  other  governmental  charges  with  respect  to  the
employees, properties, assets, income or franchises of the Company which are due
and payable have been paid or duly provided for, or are being  contested in good
faith by  appropriate  proceedings  as disclosed  on Schedule  6.13 and adequate
reserves  therefor have been established  pursuant to GAAP, or have arisen after
the date hereof in the ordinary  course of  business.  There are no tax liens on
any of the  assets of the  Company,  except  for liens for taxes not yet due and
payable.

         Section 6.14. Insurance.  Schedule 6.14 lists all insurance policies in
effect  with  respect to the Company or its  business  during the past three (3)
years,  showing,  as to each  policy or  binder,  the  carrier,  policy  number,
coverage limits,  expiration  dates,  annual premiums,  deductibles or retention
levels  and a  general  description  of the  type  of  coverage  provided.  Such
insurance  policies are  currently in full force and have remained in full force
and effect through the Closing.

         Section 6.15.  Environmental  Matters.  Except as set forth on Schedule
6.15,  (i)the  business  of the  Company  is  being  and has been  conducted  in
compliance with all Environmental  Laws, (ii) the business has, and at all times
has had, all permits,  licenses and other approvals and authorizations  required
under  applicable  Environmental  Laws for the operation of the business,  (iii)
neither the  Company  nor the  Shareholders  have  received  any notice from any
Governmental  Authority that the Company may be a potentially  responsible party
in  connection  with any waste  disposal  site or  facility  used,  directly  or
indirectly,  by or otherwise related to the business,  (iv) no reports have been
filed,  or have been required to be filed,  by the Company or the  Shareholders,
concerning  the  release of any  Regulated  Substance  or the  violation  of any
Environmental Law, on or at the properties used in the business;  (v) there have
been no environmental investigations,  studies, audits, tests, reviews, or other
analyses  conducted by or which are in the possession of the Company relating to
the  business,  true and  complete  copies of which have not been  delivered  to
National and CDL prior to the date hereof,  (vi) no Regulated Substance has been
disposed of,  transferred,  released,  discharged or  transported  by or for the
Company from the  Company's  business  premises,  other than as permitted  under
applicable  Environmental  Law pursuant to appropriate  regulations,  permits or
authorizations,  and  (vii)  there  are no  civil,  criminal  or  administrative
actions, suits, demands, claims,  hearings,  investigations or other proceedings
pending or, to the Company's  knowledge,  threatened against the business or the
Company with respect to its business or assets  relating to any  violations,  or
alleged  violations,  of any Environmental  Law, and neither the Company nor the
Shareholders  have  received  any  notices,   demand  letters  or  requests  for
information, arising out of, in connection with, or resulting from, a violation,
or alleged violation,  of any Environmental Law, and neither the Company nor the
Shareholders  have been  notified  by any  Governmental  Authority  or any other
Person that the Company's  business or assets have,  or may have,  any liability
pursuant to any Environmental Law.

         Section 6.16......Employee Matters.

         (a) Schedule  6.16  contains a true and complete  list of the employees
currently employed by the Company,  indicating the title of and a description of
any agreements  concerning  such employees and a listing of the rate or range of
rates of all current compensation payable by the Company to each employee.

         (b)  Except as set forth on  Schedule  6.16,  (i) the  Company  has not
entered into any collective bargaining agreements regarding its employees,  (ii)
there are no written personnel policies applicable to such employees  generally,
other than employee  manuals,  true and complete copies of which have previously
been  provided to National  and CDL,  (iii) there is no labor  strike,  dispute,
slowdown or work  stoppage or lockout  pending or, to the best  knowledge of the
Company,  threatened  against or affecting the Company and during the past three
years there has been no such action,  (iv) to the best knowledge of the Company,
no  union  organization  campaign  is in  progress  with  respect  to any of the
employees,  and no question  concerning  representation  exists  respecting such
employees,  (v) there is no unfair labor practice,  charge or complaint  pending
or, to the best knowledge of the Company,  threatened  against the Company,  and
(vi)  the  Company  has  not  entered  into  any   agreement,   arrangement   or
understanding  restricting its ability to terminate the employment of any or all
of its employees at any time,  for any lawful or no reason,  without  penalty or
liability.

         Section  6.17......Employee  Benefit  Plans.  Schedule  6.17  lists all
bonus,  deferred  compensation,  pension,  retirement,  profit-sharing,  thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted stock
and stock  option  plans,  all  employment  or severance  contracts,  health and
medical  insurance plans, life insurance and disability  insurance plans,  other
material employee benefit plans, contracts or arrangements which cover employees
or former  employees  of the Company  including,  but not limited to,  "employee
benefit  plans"  within  the  meaning of  Section  3(3) of ERISA (the  "Employee
Benefit Plans").  The Employee Benefit Plans which are described in Section 3(3)
of ERISA (the "ERISA Plans") are in compliance in all material respects with the
applicable  provisions of ERISA and, if intended to be tax  qualified,  Sections
401(a) and 501(a) of the Code.  All ERISA  Plans  which are  intended to qualify
under  Section  401(a) of the Code have been  submitted  to and  approved  under
Section 401(a) of the Code by the Internal  Revenue  Service or,  alternatively,
the  applicable  remedial  amendment  period with respect to any such ERISA Plan
will not have ended prior to the Closing Date. No liability  under Subtitle C or
D of Title IV of ERISA has been or is  expected to be incurred by the Company or
any of  its  Affiliates  with  respect  to any  ongoing,  frozen  or  terminated
"single-employer  plan,"  within the  meaning of Section  4001(a)(15)  of ERISA,
currently or formerly maintained by any of them, or the single-employer  plan of
any entity which is considered  one employer with the Company under Section 4001
of ERISA or Section 414 of the Code (an "ERISA Affiliate").  Except as set forth
on Schedule 6.17, neither the Company nor any of its Affiliates have incurred or
expect to incur any withdrawal  liability with respect to a multi-employer  plan
under  Subtitle  E of  Title  IV  of  ERISA  (regardless  of  whether  based  on
contributions of an ERISA Affiliate).

         Section 6.18.  Proprietary Rights. (a) All of the Company's Proprietary
Rights are listed in Schedule  6.18.  Except as disclosed in Schedule  6.18, the
Company owns and  possesses  all right,  title and  interest in the  Proprietary
Rights.  The  transactions  contemplated by this Agreement will have no material
adverse  effect on the Company's  right,  title and interest in the  Proprietary
Rights.

         (b)  No  claim   by  any   third   party   contesting   the   validity,
enforceability,  use or ownership of any  Proprietary  Rights has been made,  is
currently  pending  or, to the  Company's  or the  Shareholders'  knowledge,  is
threatened.  The Company has not  received any notice of, nor is it aware of any
fact which indicates a likelihood of, any infringement or  misappropriation  by,
or conflict with, any third party with respect to any of the Proprietary Rights.
The Company has not infringed,  misappropriated or otherwise conflicted with any
rights  of  any   third   parties,   nor  is  it  aware  of  any   infringement,
misappropriation  or  conflict  which  will  occur as a result of the  continued
operation of the Company's business as now conducted.

         Section 6.19......Accounts Receivable.  Schedule 6.19 sets forth a true
and  complete  listing of all  accounts  and notes  receivable  and all reserves
related thereto,  deposits,  advances and manufacturer and supplier rebates (the
"Accounts  Receivable") and an aging schedule reflecting the aggregate amount of
all Accounts Receivable  outstanding (i) 30 days or less, (ii) more than 30 days
but less  than or equal to 60 days,  (iii)  more  than 60 days but less  than or
equal to 90 days,  and (iv) more than 90 days.  All of the  Accounts  Receivable
have arisen in the ordinary and regular course of business,  represent bona fide
transactions  with third  parties  and are not subject to any  counterclaims  or
offsets (except for those for which adequate  reserves have been  established in
accordance with GAAP) and have been billed and, to the Company's knowledge,  are
collectible in the ordinary course.

         Section 6.20......Contracts.

         (a)  Schedule  6.20  describes  all  contracts  (except  for  usual and
ordinary purchase orders executed in the normal course of business), agreements,
leases, commitments, instruments, plans, permits or licenses, whether written or
oral,  to which  the  Company  is a party  or is  otherwise  bound,  of the type
described below (the "Contracts"):

                  (i)      all  agreements  with or  commitments  to  customers
         for the  sale  by the  Company  of products or services;

                  (ii) all  agreements  or  commitments  for the purchase by the
         Company of services, raw materials,  products, machinery,  equipment or
         other  personal  property  other than those that are for amounts not to
         exceed $20,000;

                  (iii)    all capitalized leases, pledges, conditional sale or
         title retention agreements;

                  (iv) all employment agreements and commitments, all consulting
         or severance  agreements or arrangements and all agreements between the
         Company and the Shareholders,  any Affiliate of the Shareholders or any
         other  officer,  director  or  employee  of  the  Company  (other  than
         employee-at-will relationships);

                  (v) all  agreements  relating to the  consignment  or lease of
         personal property (whether the Company is lessee, sublessee,  lessor or
         sublessor), other than such agreements that provide for annual payments
         of less than $20,000;

                  (vi)     all license, royalty or other agreements relating to
         the Proprietary Rights;

                  (vii)    all agreements  prohibiting the Company from freely
         engaging in the business  presently conducted by the Company in any
         geographic area;

                  (viii)   all  agreements  to  provide  rebates to  customers
         of the  Company,  to the extent not reflected as a liability on the
         Financial Statements; and

                  (ix) any  agreement  other than those  covered by clauses  (i)
         through (viii) above involving  payment or receipt of more than $40,000
         in the aggregate.

                  (b) To the knowledge of the Company, none of the other parties
to any such  Contracts  intends to  terminate or  materially  alter the material
provisions  of such  material  Contracts  either  as a  result  of  transactions
contemplated hereby or otherwise, except as disclosed in Schedule 6.20.

                  (c) Except as disclosed in Schedule  6.20,  the Company is not
in, nor has given or received  notice of, any default or claimed,  purported  or
alleged  default,  or facts that,  with notice or lapse of time, or both,  would
constitute  a default (or give rise to a  termination  right) on the part of any
party in the  performance  of any  obligation  to be performed  under any of the
Contracts,  other than those which will not result in a Material  Adverse Effect
on the Company.

                  (d)  True  and  complete  copies  of  all  written  Contracts,
including any  amendments  thereto,  have been  delivered to National or CDL and
such documents constitute the legal, valid and binding obligation of the Company
and,  to the  best  knowledge  of the  Company,  each  other  party  purportedly
obligated thereunder.

         Section 6.21......Customers and Suppliers.

                  (a)  Schedule  6.21.  sets  forth  a  list  of  all  customers
(including  names,  addresses,  contact  persons,  and  telephone  and facsimile
numbers) with whom the Company (i) currently  does  business,  (ii) is currently
actively  pursuing as a  prospective  customer,  or (iii) has done business with
since January 1, 1996.

                  (b) Except to the extent set forth in  Schedule  6.21,  no one
customer or group of related  customers of the Company  account for more than 5%
of all of the revenues, in the aggregate,  of the Company.  Except to the extent
set forth on  Schedule  6.21,  (i) none of the  customers  of the  Company  with
revenues  greater than 5% of the total  revenues have canceled or  substantially
reduced or, to the  knowledge of the  Shareholders  or the Company are currently
attempting or threatening to cancel or substantially reduce service and (ii) the
Company has complied with all material commitments and obligations pertaining to
them and is not in default under any such contracts and agreements and no notice
of default has been received. Schedule 6.21 lists the ten (10) largest customers
(in terms of sales) of the Company, in the aggregate,  for the fiscal year ended
December 31, 1997 and the first eight  months of 1998 and the revenues  received
from each such customer during fiscal 1997 and the first eight months of 1998.

                  (c)......Schedule  6.21  sets  forth a list  of the  ten  (10)
largest suppliers of the Company, in the aggregate, in terms of purchases during
the year ended  December 31, 1997 and the first eight months of 1998.  Except as
set forth on Schedule 6.21, no supplier  listed on Schedule 6.21 has notified or
otherwise  indicated to the Company that it will stop,  or decrease the rate of,
or,  other  than  publicly  announced  generally   applicable  price  increases,
materially  increase the cost of, its supply of materials,  products or services
used by the Company,  and no supplier  listed on Schedule  6.21 has,  during the
current  fiscal year,  ceased,  materially  decreased  the rate of or materially
raised the cost of, any such materials, products or services.

         Section  6.22.  Predecessor  Status.  Set forth in  Schedule  6.22 is a
listing of all names of all predecessor companies of the Company,  including the
names  of any  entities  from  whom  within  the last  five  years  the  Company
previously acquired  significant assets. The Company has never been a subsidiary
or division of another  corporation or a part of any acquisition which was later
rescinded. Set forth on Schedule 6.22 is a listing of each business name used by
the Company and its predecessors and by any companies acquired by or merged into
it, and each state and  county in which any such  trade name is  registered,  if
any.

         Section  6.23......Books and Records.  The stock records of the Company
accurately  reflect the record ownership of all of the outstanding shares of its
capital stock. The other books and records of the Company,  including  financial
records and books of account, are complete and accurate and have been maintained
in accordance with GAAP, to the extent applicable, and sound business practices.
The minute books of the Company  contain  complete  and accurate  records of all
meetings of, or actions taken without a meeting by, the shareholders,  the Board
of Directors or any committee of the Company. No meetings of the shareholders or
of the Board of Directors of the Company or any of its committees have been held
for which  minutes have not been  prepared  and are not  contained in its minute
books and no action taken by it without a meeting is not accurately  recorded in
its minute books.

         Section  6.24......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the  Company  in  connection  with  this  Agreement  or any of the  transactions
contemplated  hereby.  The  Company  has not  employed  any  broker  or agent in
connection with the transactions contemplated by this Agreement.

         Section 6.25......Full  Disclosure.  No representation or warranty made
by the Shareholders or the Company in this Agreement,  any Schedule, any Exhibit
or any  certificate  delivered  by or on behalf of the Company  pursuant  hereto
contains or will  contain any untrue  statement  of a material  fact or omits or
will omit to state a material fact  necessary to make the  statements  contained
herein or therein not misleading.

                                   ARTICLE VII

            Representations and Warranties Regarding the Shareholders

         Each  Shareholder  represents  and warrants to National  and CDL,  with
respect to himself only, as follows:

         Section  7.1.......Authorization.  The  Shareholder has the capacity to
execute and deliver this Agreement and to perform his obligations hereunder. The
Shareholder is not under any impairment or other  disability,  legal,  physical,
mental or  otherwise,  that would  preclude  or limit his ability to perform his
obligations hereunder. This Agreement constitutes a binding and valid obligation
of the Shareholder, enforceable against him in accordance with its terms.

         Section 7.2.......Non-contravention. Neither the execution and delivery
of  this  Agreement  nor  the  performance  by the  Shareholder  of  obligations
hereunder  will (i) violate or result in a breach  (with or without the lapse of
time,  the giving of notice or both) of or  constitute  a default  under (A) any
contract,  agreement,  commitment,  indenture,  mortgage,  lease,  pledge, note,
license,  permit or other  instrument or obligation or (B) any judgment,  order,
decree,  law,  rule or  regulation  or  other  restriction  of any  Governmental
Authority,  in each case to which any of the  Shareholder is a party or by which
the  Shareholder  is bound or to which any of his  assets or  properties  or the
assets or properties of the Company are subject,  (ii) result in the creation or
imposition  of  any  Encumbrances  on any of the  assets  or  properties  of the
Shareholder or the Company,  or (iii) result in the  acceleration  of, or permit
any  Person  to  accelerate  or  declare  due and  payable  prior to its  stated
maturity, any obligation of the Shareholder.

         Section   7.3.......No   Consents.   No  notice  to,  filing  with,  or
authorization,  registration,  consent or approval of any Governmental Authority
or other Person is necessary for the execution,  delivery or performance of this
Agreement or the  consummation of the  transactions  contemplated  hereby by the
Shareholder.

         Section  7.4.......Ownership  of the Company's  Stock.  The Shareholder
owns all of the Company's Stock held by him beneficially and of record, free and
clear of any Encumbrances.  Exhibit A sets forth the individual ownership of the
Company's Stock by the Shareholder next to his name.

         Section  7.5.......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the  Shareholder in connection  with this  Agreement or any of the  transactions
contemplated  hereby.  The  Shareholder  has not employed any broker or agent in
connection with the transactions contemplated by this Agreement.

         Section 7.6.      Affiliates.  The  Shareholder  has no interest in,
nor  affiliation  with, any entity or person in the air or ground  messenger or
delivery  business or any related  business  except for the Company or as set
forth in Schedule 7.6.

         Section 7.7.......Full  Disclosure.  No representation or warranty made
by the  Shareholders  in  this  Agreement,  any  Schedule,  any  Exhibit  or any
certificate delivered,  or to be delivered,  by or on behalf of the Shareholders
pursuant hereto contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact  necessary to make the statements
contained herein or therein not misleading.

                                  ARTICLE VIII

             Representations and Warranties Regarding National and CDL

         National and CDL,  jointly and severally,  represent and warrant to the
Shareholders and the Company as follows:

         Section 8.1. Organization.  National and CDL are each corporations duly
organized, validly existing and in good standing under the laws of the States of
Missouri and Delaware, respectively and have full power and authority, corporate
and other,  to own their  respective  property  and assets and to carry on their
respective  businesses as presently  conducted except where the failure to be so
qualified  would  not  have  a  material  adverse  effect  on  their  respective
businesses.

         Section  8.2.  Authorization.  National  and CDL have  full  power  and
authority,  corporate  and other,  to execute and deliver this  Agreement and to
perform  their  respective  obligations  hereunder,  all of which have been duly
authorized by all requisite  corporate action.  This Agreement,  has been or, at
the time of  delivery  will be,  duly  authorized,  executed  and  delivered  by
National and CDL and constitute or, at the time of delivery will  constitute,  a
valid and binding  agreement of National and CDL,  enforceable  against National
and CDL in accordance with its terms.

         Section  8.3.......Non-contravention.   Neither  National  nor  CDL  is
subject to any  provision of its  respective  Certificate  of  Incorporation  or
by-laws or any agreement,  instrument,  law, rule, regulation,  order, decree or
judgment of any Governmental  Authority or other  restriction that would prevent
the consummation of the transactions contemplated by this Agreement.

         Section   8.4.......No   Consents.   No  notice  to,  filing  with,  or
authorization,  registration,  consent or approval of any Governmental Authority
or other Person is necessary for the execution,  delivery or performance of this
Agreement  or  the  consummation  of the  transactions  contemplated  hereby  by
National and CDL.

         Section  8.5.......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
either  National  or  CDL  in  connection  with  this  Agreement  or  any of the
transactions contemplated hereby.

         Section  8.6.......SEC  Documents.  The SEC  Documents  adequately  and
correctly  describe the business of CDL as at their  respective  dates.  The SEC
Documents  do not contain any untrue  statement  of a material  fact nor omit to
state a material fact  necessary to make the  statements  contained  therein not
misleading.

         Section  8.7.......CDL Stock. The CDL Stock to be issued hereunder will
be  duly  authorized,   validly  issued,   fully  paid  and  nonassessable.   No
Encumbrances  or  restrictions  exist on the CDL Stock,  except  restrictions on
transfer pursuant to state and federal securities laws.

                                   ARTICLE IX

                            Covenants and Agreements

         Section 9.1.......Access and Information.  No investigation by National
and CDL  heretofore  or  hereafter  made shall  modify or  otherwise  affect any
representations  and warranties of the Company or the Shareholders,  which shall
survive any such investigation,  or the conditions to the respective obligations
of National and CDL to consummate the transactions contemplated hereby.

         Section  9.2.......Closing  Documents. The Company and the Shareholders
shall,  prior to or on the Closing  Date,  execute and  deliver,  or cause to be
executed  and  delivered  to National  and CDL,  the  documents  or  instruments
described in Section  10.2.  National and CDL shall,  prior to or on the Closing
Date,  execute  and  deliver,  or cause to be  executed  and  delivered,  to the
Shareholders, the documents or instruments described in Section 10.3.

         Section  9.3.......Taxes.  The  following  provisions  shall govern the
allocation of responsibility as between CDL and National on the one hand and the
Company on the other hand for certain tax matters following the Closing Date:

         (a) Tax Periods Ending on or Before the Closing Date. CDL shall prepare
or cause to be  prepared  and file or cause to be filed all tax  returns for the
Company  for all periods  ending on or prior to the Closing  Date which have not
been filed and which were not  required to be filed  prior to the Closing  Date.
CDL shall permit the  Shareholders to review and comment on each such tax return
described in the preceding  sentence  prior to filing.  The  Shareholders  shall
reimburse  CDL for taxes,  interest and penalties of the Company with respect to
such  periods  within  fifteen  (15)  days  after  payment  by CDL or any of its
affiliates  of such taxes to the  extent  such  taxes are not  reflected  in the
reserve for taxes shown on the face of the  Balance  Sheet for the period  ended
the Closing Date.

         (b) Tax Periods Beginning Before and Ending After the Closing Date. CDL
shall prepare or cause to be prepared, pay and file or cause to be filed any tax
returns of the Company for tax periods  which begin  before the Closing Date and
end after the Closing Date. The shareholders of the individual Company owing the
taxes  shall pay to CDL within  fifteen  (15) days after the date on which taxes
are paid with  respect to such  periods an amount  equal to the  portion of such
taxes,  interest  and  penalties  which  relates to the portion of such  taxable
period  ending on the closing date to the extent such taxes are not reflected in
the reserves for taxes,  interest and penalties  shown on Schedule 9.3(b) and as
reflected  on the face of the  Balance  Sheet for the period  ended the  Closing
Date.

         (c)  Cooperation  on Tax Matters.  CDL,  National and the  Shareholders
shall cooperate  fully, as and to the extent  reasonably  requested by the other
party, in connection with the filing of tax returns pursuant to this Section and
any  audit,   litigation  or  other  proceeding  with  respect  to  taxes.  Such
cooperation shall include the retention and (upon the other party's request) the
provision of records and information  which are reasonably  relevant to any such
audit,  litigation  or other  proceeding  and making  employees  available  on a
mutually  convenient basis to provide additional  information and explanation of
any material provided hereunder.  If the Shareholders wish to contest any audit,
litigation  inquiry or other  proceeding with respect to taxes for periods prior
to the  Closing  Date for which they are  liable,  they may do so with  counsel.
accountants  and/or other  professionals of their choosing,  so long as prior to
assuming such role,  they deposit with CDL and National an amount of funds to be
held in escrow by CDL which will cover and  indemnify  and hold harmless CDL for
all taxes, interest and penalties which may be imposed upon CDL, National or the
Companies  by reason of such  proceeding  and all amounts  needed to provide for
defense costs in such proceeding.

         (d) Tax  Sharing  Agreements.  All tax  sharing  agreements  or similar
agreements  with respect to or involving  the Company  shall be terminated as of
the Closing Date and,  after the Closing  Date,  the Company  shall not be bound
thereby or have any liability thereunder.

         (e) Certain  Taxes.  All  transfer,  documentary,  sales,  use,  stamp,
registration  and  other  such  taxes  and fees  (including  any  penalties  and
interest)  incurred  in  connection  with  this  Agreement  shall be paid by the
Shareholders when due, and the Shareholders will, at their own expense, file all
necessary tax returns and other documentation with respect to all such transfer,
documentary,  sales, use, stamp,  registration and other taxes and fees, and, if
required by applicable  law, CDL will, and will cause its affiliates to, join in
the execution of any such tax returns and other documentation.

                  Section 9.4.  Non-Competition and  Confidentiality  Agreement.
For a period of five (5) years after the Closing Date, or, as to any Shareholder
who becomes an employee of  National or CDL,  during such  employment  and for a
period  of two  (2)  years  following  termination  of such  relationship  as an
employee  (whichever  period is longer),  the Shareholders  will not directly or
indirectly:

                                    (i) engage in the small  package  delivery
                  business or the provision of ground or air  transportation
                  services in or within 250 miles of any of Kansas City, Kansas,
                  St. Louis, Missouri, or Indianapolis, Indiana (the
                  "Territory");

                                    (ii)  call upon any  person  who is, at that
                  time,   an  employee  of  National  or  CDL   (including   the
                  subsidiaries  of  either  thereof)  in a  managerial  or sales
                  capacity  for the purpose or with the intent of enticing  such
                  employee away from or out of the employ of National or CDL;

                                    (iii)  call upon any  person  or entity  (x)
                  which is, at that time, or which has been, within one (1) year
                  prior to that time,  a customer of National or CDL  (including
                  the  subsidiaries  of  either  thereof)  or  (y)  which  was a
                  customer of the Company in the 18 month period  preceding  the
                  Closing,  for the purpose of soliciting or selling products or
                  services in direct  competition  with National or CDL anywhere
                  in the United States; or

                                    (iv) use for his own  benefit  or divulge or
                  convey to any third party,  any  Confidential  Information (as
                  hereinafter  defined) relating to the Company or its business.
                  For  purposes  of  this  Agreement,  Confidential  Information
                  consists of all information, knowledge or data relating to the
                  Company  or  its  business   including,   without  limitation,
                  customer  and  supplier  lists,   formulae,   trade  know-how,
                  processes, secrets, consultant contracts, pricing information,
                  marketing   plans,   product   development   plans,   business
                  acquisition  plans and all other  information  relating to the
                  operation  of the  Company or its  business  not in the public
                  domain or  otherwise  publicly  available.  Information  which
                  enters the public  domain or is publicly  available  loses its
                  confidential  status  hereunder so long as the Shareholders do
                  not directly or indirectly cause such information to enter the
                  public domain.

                  Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit the Shareholders from acquiring,  as an investment,  not more
than one percent (1%) of the capital stock of a competing  business  whose stock
is traded on a national securities exchange or over-the-counter.

                  The Shareholders  acknowledge that the restrictions  contained
in this  Section 9.4 are  reasonable  and  necessary  to protect the  legitimate
interests  of National  and CDL and that any breach by the  Shareholders  of any
provision  hereof will result in  irreparable  injury to National  and CDL.  The
Shareholders  acknowledge  that,  in addition to all remedies  available at law,
National and CDL shall be entitled to  equitable  relief,  including  injunctive
relief, and an equitable  accounting of all earnings,  profits or other benefits
arising  from such breach and shall be entitled to receive  such other  damages,
direct or consequential,  as may be appropriate.  Neither National nor CDL shall
be required to post any bond or other security in connection with any proceeding
to enforce this Section 9.4.

                  It is specifically agreed that the five (5) year period stated
at the beginning of this Section 9.4,  during which the agreements and covenants
of the Shareholders shall be effective, shall be computed by excluding from such
period any time during which the  Shareholders are in violation of any provision
of this Section 9.4. It is also agreed that the  restrictions  contained in this
Section 9.4 and in the Employment  Agreements  shall terminate in the event that
CDL, after all allowable grace periods, fails to make any payment when due under
the Notes; provided,  however, that such restrictions shall not terminate if the
nonpayment  is due to an exercise  of the right of set-off  under  Section  11.5
hereof.

                  All of the covenants in this Section 9.4 shall be construed as
an  agreement  independent  of any other  provision in this  Agreement,  and the
existence  of any claim of the  Shareholders  against  National or CDL shall not
constitute a defense to the enforcement of such covenants.

                  The foregoing notwithstanding, the covenants set forth in this
Section 9.4 (and the similar  confidentiality  and noncompetition  provisions in
any  Shareholder's  employment  agreement)  shall terminate and be of no further
effect if CDL fails to make any  payment to the  Shareholders  under the Note or
the Earn-Out  Payment  after all allowable  grace periods and  resolution of all
disputes relating thereto.

         Section 9.5.......Audited  Financial  Statements  of the  Company.  All
fees  and  expenses  incurred  in connection  with any audits of the  financial
statements of the Company  shall be the sole  responsibility  of the
Shareholders.

         Section  9.6.......Best  Efforts;  Further  Assurances.  Subject to the
terms and conditions  herein provided,  each of the parties hereto shall use its
best efforts to take, or cause to be taken,  all action,  and to do, or cause to
be done, all things reasonably  necessary,  proper or advisable under applicable
laws  and  regulations  to  consummate  and  make  effective  the   transactions
contemplated by this Agreement. Each of the Company, the Shareholders,  National
and CDL will use  their  respective  best  efforts  to  obtain  consents  of all
Governmental  Authorities and third parties necessary to the consummation of the
transactions  contemplated by this Agreement.  The Company and the  Shareholders
shall use their respective reasonable best efforts to assist National and CDL in
connection  with  the  fulfillment  of any SEC  disclosure,  reporting  or other
governmental  compliance  obligation  of  National  and CDL,  including  without
limitation  providing  National and CDL with any financial and other information
requested by National  and CDL. In the event that at any time after  Closing any
further  action is necessary to carry out the  purposes of this  Agreement,  the
Company and the Shareholders  shall take all such reasonable  action without any
further consideration therefor.

         Section 9.7.      Compliance with the Securities Act.

         (a) The Shareholders  acknowledge that the CDL Stock to be delivered to
the  Shareholders  pursuant to this Agreement  (including upon conversion of any
part of the  Notes)  (the  "Restricted  Stock")  has not  been  and  will not be
registered  under the  Securities  Act and therefore  may not be resold  without
compliance  with the Securities  Act. The Restricted  Stock is being acquired by
the Shareholders  solely for their own accounts,  for investment  purposes only,
and with no present intention of distributing, selling or otherwise disposing of
it in  connection  with  the  distribution  of  such  shares.  The  Shareholders
covenant,  warrant and represent that the Restricted  Stock will not be offered,
sold,  assigned,  pledged,  hypothecated,  transferred or otherwise  disposed of
except  after  full  compliance  with all of the  applicable  provisions  of the
Securities  Act and the  rules  and  regulations  of the SEC.  The  certificates
representing the Restricted Stock shall bear the following legend:

                  The  securities  represented  hereby  were  not  issued  in  a
                  transaction  registered  under the  Securities Act of 1933, as
                  amended ("Securities Act"), or any applicable state securities
                  laws and may not be sold, pledged,  hypothecated, or otherwise
                  transferred  unless  such sale or  transfer  is  covered by an
                  effective  registration statement under the Securities Act and
                  applicable state securities laws or, in the opinion of counsel
                  for the holder and the issuer, is exempt from the registration
                  requirements of the Securities Act and such laws.

The  foregoing  legend  notwithstanding,  CDL will not  require  any  opinion of
counsel if the Restricted  Stock may be transferred  pursuant to Rule 144 of the
Act.

         (b) Each  Shareholder  represents  that he is able to bear the economic
risk of an investment  in the  Restricted  Stock,  can afford to sustain a total
loss of such  investment  and has such knowledge and experience in financial and
business matters including  investments in unregistered  securities,  that he is
capable of evaluating the merits and risks of the proposed investment and/or has
employed a purchaser  representative who is qualified by training and experience
in  business  and  financial  matters  to  evaluate  the  merits and risks of an
investment in CDL and therefore has the capacity to protect his own interests in
connection with his acquisition of the Restricted Stock.

         (c)  Each  Shareholder   represents  that  he,  or  such  Shareholder's
purchaser  representative,  has  read  and  reviewed  the  information  provided
pursuant to this Agreement and the other documentation and information furnished
by National or CDL  (including  CDL's Form 10-K for the year ended  December 31,
1997,  its Forms 10-Q for the quarters ended March 31, June 30 and September 30,
1998, its Forms 8-K filed July 16, August 5, 18 and 19,  September 15 and 28 and
October  19,  1998,  its  Registration  Statement  on Form  S-4,  and its  proxy
statement  for its annual  meeting held on June 17, 1998 (the "SEC  Documents"))
and has had an adequate  opportunity  to ask questions and receive  answers from
the officers of CDL concerning,  among other matters,  CDL, its management,  and
its plans for the operation of its  business.  National and CDL have provided to
the  Shareholders  an opportunity to ask questions and receive  answers from the
officers of CDL and to obtain any and all additional  information  necessary for
them to verify the  accuracy of the  information  provided  herein or  delivered
pursuant hereto.

         (d) Until all of the shares of CDL Stock issued  hereunder  are sold or
eligible  for sale  pursuant to Rule  144(k) of the  Securities  Act,  CDL shall
remain current in filing all reports with the SEC necessary to allow transfer of
the  shares  of CDL  Stock  pursuant  to  Rule  144 if  otherwise  eligible  for
unrestricted sale under Rule 144.

                  Section  9.8.  Covenants  of  CDL  and  National.  During  the
Measurement Period,  without the prior consent of Bozzay, CDL and National agree
to:

                  (a) Continue to elect Bozzay to the Board of Directors of
National: and
                  (b) Keep the Division maintained as a separate profit center
wholly-owned by CDL.

                  Section 9.9. Personal Guarantees.  Attached hereto as Schedule
9.9 is a list of all debt of the Company which is  personally  guaranteed by the
Shareholders.  CDL will use  reasonable  efforts after the Closing Date to cause
each  beneficiary  of a guarantee  listed on  Schedule  9.9 to accept a National
guarantee in place of the Shareholder guarantee it currently holds.

                                    ARTICLE X

                               Closing Deliveries

         Section 10.1.  Mutual  Conditions.  The respective  obligations of each
party to consummate the  transactions  contemplated  by this Agreement  shall be
subject to the  fulfillment  at or prior to Closing of the condition that (A) no
Governmental Authority of competent jurisdiction shall have (i) enacted, issued,
promulgated,  enforced  or entered  any  statute,  rule,  regulation,  judgment,
decree,  injunction  or other order  which is in effect;  or (ii)  commenced  or
threatened  any  action or  proceeding,  which in  either  case  would  prohibit
consummation of the  transactions  contemplated  by this  Agreement,  and (B) no
action or  proceeding  before a court or any other  governmental  agency or body
shall  have  been   instituted   or  threatened  to  restrain  or  prohibit  the
transactions, contemplated by this Agreement.

         Section  10.2......Deliveries by the Company and the Shareholders.  The
obligations of National and CDL to consummate the  transactions  contemplated by
this  Agreement  shall be subject to the  fulfillment  prior to or at Closing of
each of the following conditions:

         (a) All  representations and warranties made by each of the Company and
the  Shareholders  in this  Agreement  and the  Schedules  hereto shall be true,
correct and  complete  on the date  hereof and as of the Closing  Date as though
such  representations  and warranties  were made as of the Closing Date, and the
Company and the  Shareholders  shall have duly performed or complied with all of
the  covenants,  obligations  and conditions to be performed or complied with by
them under the terms of this Agreement on or prior to or at Closing.

         (b)  There  shall  have been no (i)  Material  Adverse  Change,  or any
development  which  could  reasonably  be  expected  to result in a  prospective
Material Adverse Change, or (ii) material damage, destruction or loss to, or any
other material and adverse change in, the assets or the business of the Company,
regardless of insurance coverage.

         (c) (i) All  authorizations,  consents,  waivers,  approvals  or  other
actions  required in connection with the execution,  delivery and performance of
this Agreement by the Company and the  Shareholders  and the consummation by the
Company and the Shareholders of the transactions  contemplated hereby shall have
been obtained and shall be in full force and effect; (ii) the Company shall have
obtained any  authorizations,  consents,  waivers,  approvals  or other  actions
required  to prevent a  material  breach or  default  by the  Company  under any
contract to which the Company is party or for the  continuation of any agreement
to which  the  Company  is a party;  and  (iii)  all  authorizations,  consents,
waivers,  approvals or other  actions  necessary  to permit  National to own the
Company's Stock shall have been obtained and shall be in full force and effect.

         (d) All  promissory  notes  issued to any of the  Shareholders  (all of
which are listed and described in Schedule 10.2) shall continue to be payable by
National or CDL after the Closing Date over the same  specified  time period and
at the same interest rate without acceleration unless National or CDL chooses to
repay the notes without penalty prior to note maturity.

         (e) The  Shareholders  shall  have  delivered  to CDL the  certificates
representing  the  Company's  Stock  along with the other  items  referred to in
Article III.

         (f) Prior to or at the Closing,  the Shareholders and the Company shall
have  delivered  such other closing  documents as shall be requested by National
and CDL in form and substance reasonably  acceptable to counsel for National and
CDL, including the following:

                  (i) a certificate  of the President or a Vice President of the
         Company  and a similar  certificate  from the  Shareholders,  dated the
         Closing Date, to the effect that (1) the Person or Persons signing such
         certificate  is familiar  with this  Agreement  and (2) the  conditions
         specified in Section  10.2(a),  (b) and (c), with respect to the person
         or Company signing the certificate, have been satisfied;

                  (ii) a certificate of the Secretary or Assistant  Secretary of
         the  Company,  dated the  Closing  Date,  as to the  incumbency  of any
         officer of the Company executing this Agreement or any document related
         thereto  and  covering  such  other  matters  as  National  and CDL may
         reasonably request;

                  (iii) a certified  copy of (1) the  Articles of  Incorporation
         and  by-laws of the  Company and all  amendments  thereto,  and (2) the
         resolutions  of the Board of Directors of the Company  authorizing  the
         execution,   delivery  and  consummation  of  this  Agreement  and  the
         transactions contemplated hereby;

                  (iv) the  Shareholders  and certain  other persons shall enter
         into employment agreements (the "Employment  Agreements") with National
         in the respective  forms attached hereto as Exhibit C and shall release
         CDL , National  and the  Companies  from any  liabilities  arising from
         existing  employment  agreements,  which  shall  be  deemed  terminated
         immediately prior to the Closing Date;

                  (v)      an opinion of Thompson Coburn,  counsel to the
         Company and the  Shareholders,  dated the Closing Date, and
         substantially in the form attached as Exhibit D;

                  (vi) a  Certificate  of Merger  (pre-filed  in Missouri with a
         delayed effective date) with a Plan of Merger for National and RE II as
         provided in Section 1.1; and

                  (vii) such other  documents or instruments as National and CDL
         reasonably requests to effect the transactions contemplated hereby.

         Section  10.3......Deliveries  by CDL and National.  The obligations of
the Shareholders and the Company to consummate the transactions  contemplated by
this Agreement shall be subject to the fulfillment at or prior to the Closing of
each of the following conditions:

         (a) All  representations  and  warranties  made by  National  and  CDL,
respectively,  in this Agreement shall be true, correct and complete on the date
hereof and as of the Closing Date as though such  representations and warranties
were made as of the Closing Date, and National and CDL shall have duly performed
or complied with all of their respective  covenants,  obligations and conditions
to be performed or complied with by them, respectively,  under the terms of this
Agreement on or prior to or at the Closing.

         (b) All  authorizations  or  approvals  or  other  action  required  in
connection  with the  execution,  delivery and  performance of this Agreement by
National  and  CDL and  the  consummation  by  such  party  of the  transactions
contemplated  hereby and thereby  shall have been  obtained and shall be in full
force and effect.

         (c) Prior to or at the Closing,  National and CDL shall have  delivered
to the Shareholders such closing  documents as shall be reasonably  requested by
the  Shareholders  in form and substance  reasonably  acceptable to his counsel,
including the following:

                  (i) a certificate of the President or a Vice President of each
         of National and CDL, dated the Closing Date, to the effect that (1) the
         Person signing such certificate is familiar with this Agreement and (2)
         the  conditions   specified  in  Section  10.3(a)  and  (b)  have  been
         satisfied;

                  (ii) a certificate of the Secretary or Assistant  Secretary of
         each of National and CDL,  dated the Closing Date, as to the incumbency
         of any officer thereof executing this Agreement or any document related
         thereto  and  covering  such  other  matters  as the  Shareholders  may
         reasonably request;

                  (iii) a  certified  copy of the  resolutions  of the  Board of
         Directors of National and CDL, respectively, authorizing the execution,
         delivery  and  consummation  of this  Agreement  and  the  transactions
         contemplated hereby and thereby;

                  (iv)     the shares of CDL Stock,  Notes and cash  payments
         to be  delivered  at the  Closing as provided in Section 2.2 hereof; 
         and

                  (v)      National shall enter into the Employment  Agreements
         with the  Shareholders  and certain other persons.


                                   ARTICLE XI

            Survival of Representations and Warranties; Indemnification

         Section 11.1......Survival of Representations and Warranties. Except as
set  forth  below,  the  representations  and  warranties  provided  for in this
Agreement  shall survive the Closing for two (2) years from the Closing Date for
the  benefit  of the  parties  hereto  and their  successors  and  assigns.  The
representations  and  warranties  provided for in Sections  6.11,  6.13 and 6.15
shall survive the Closing and remain in full force and effect for six (6) years.
The  survival  period of each  representation  or  warranty  as provided in this
Section 11.1 is hereinafter referred to as the "Survival Period."

         Section 11.2......Indemnification.

         (a) Each Shareholder shall indemnify and hold harmless  National,  CDL,
their  respective  Affiliates,   officers,  directors,   employees,  agents  and
representatives,  and any Person claiming by or through any of them, against and
in respect of any and all claims, costs, expenses, damages, liabilities,  losses
or deficiencies (including,  without limitation,  counsel's fees and other costs
and expenses incident to any suit, action or proceeding) (the "Damages") arising
out of,  resulting from or incurred in connection with (i) any inaccuracy in any
representation  or the breach of any warranty  made by such  Shareholder  or the
Company in which such  Shareholder  is a shareholder  in this  Agreement for the
applicable  Survival  Period,  or (ii) the  breach  by such  Shareholder  of any
covenant or  agreement to be  performed  by him  hereunder,  or (iii) any costs,
damages,  fines,  penalties  or  liability  relating to or arising from the tank
removal  disclosed  on  Schedule  6.15 or to the  leakage  or  discharge  of any
materials therefrom.

         (b) National and CDL,  jointly and severally,  shall indemnify and hold
harmless the Shareholders, their Affiliates, agents and representatives, and any
Person claiming by or through any of them, against and in respect of any and all
Damages  arising out of,  resulting from or incurred in connection  with (i) any
inaccuracy in any  representation or the breach of any warranty made by National
or CDL in this Agreement for the applicable  Survival Period, or (ii) the breach
by National or CDL of any covenant or agreement to be performed by it hereunder.

         (c) Any Person providing  indemnification pursuant to the provisions of
this Section 11.2 is hereinafter  referred to as an "Indemnifying Party" and any
Person  entitled to be  indemnified  pursuant to the  provisions of this Section
11.2 is hereinafter referred to as an "Indemnified Party."

         Section 11.3......Procedures for Third Party Claims. In the case of any
claim for indemnification  arising from a claim of a third party (a "Third Party
Claim"),   an  Indemnified  Party  shall  give  prompt  written  notice  to  the
Indemnifying  Party of any  claim or demand  which  such  Indemnified  Party has
knowledge  and  as to  which  it  may  request  indemnification  hereunder.  The
Indemnifying  Party  shall have the right to defend  and to direct  the  defense
against  any  such  Third  Party  Claim,  in  its  name  or in the  name  of the
Indemnified Party, as the case may be, at the expense of the Indemnifying Party,
and with counsel selected by the Indemnifying  Party unless (i) such Third Party
Claim  seeks  an  order,  injunction  or  other  equitable  relief  against  the
Indemnified  Party and it is reasonably  necessary for the Indemnified  Party to
utilize its own counsel  either due to time  demands or the mature of the relief
sought, or (ii) the Indemnified Party shall have reasonably concluded that there
is an  actual  conflict  of  interest  arising  from the  counsel  chosen by the
Indemnified  Party  representing  the  Indemnifying  Party in the conduct of the
defense of such Third Party Claim. Notwithstanding anything in this Agreement to
the contrary,  the Indemnified  Party shall, at the expense of the  Indemnifying
Party,  cooperate with the Indemnifying  Party, and keep the Indemnifying  Party
fully informed,  in the defense of such Third Party Claim. The Indemnified Party
shall have the right to participate in the defense of any Third Party Claim with
counsel employed at its own expense; provided, however, that, in the case of any
Third  Party  Claim  described  in clause  (i) or (ii) of the  second  preceding
sentence or as to which the  Indemnifying  Party shall not in fact have employed
counsel to assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party.
The Indemnifying Party shall have no indemnification obligations with respect to
any Third Party Claim which shall be settled by the  Indemnified  Party  without
the prior written consent of the Indemnifying  Party, which consent shall not be
unreasonably withheld or delayed.

         Section  11.4......Procedures for Inter-Party Claims. In the event that
an  Indemnified  Party  determines  that it has a claim for  Damages  against an
Indemnifying  Party  hereunder  (other than as a result of a Third Party Claim),
the  Indemnified   Party  shall  give  prompt  written  notice  thereof  to  the
Indemnifying  Party,  specifying the amount of such claim and any relevant facts
and  circumstances  relating  thereto.  The Indemnified  Party shall provide the
Indemnifying  Party  with  reasonable  access to its books and  records  for the
purpose of allowing the  Indemnifying  Party a reasonable  opportunity to verify
any such claim for Damages.  The Indemnified  Party and the  Indemnifying  Party
shall  negotiate in good faith  regarding the resolution of any disputed  claims
for Damages.  Promptly  following the final  determination  of the amount of any
Damages claimed by the Indemnified  Party, the Indemnifying Party shall pay such
Damages to the  Indemnified  Party by wire transfer or check made payable to the
order of the Indemnified Party, without interest.

         Section  11.5......Right of Set-Off. The Shareholders hereby agree that
National  and CDL shall have the right to set-off,  against any amount which may
be owed by  National  or CDL to the  Shareholders  pursuant  to this  Agreement,
including  but not  limited  to the  Notes  and any earn out  payments,  whether
payable in cash or securities (but excluding  salary due to the  Shareholders as
employees),  whether due or unpaid at the time of such set-off,  any amount owed
to National and CDL by the Shareholders pursuant to this Agreement or otherwise.
The exercise of such right of set-off by National and CDL shall not constitute a
breach by National or CDL of this  Agreement or the  agreement  underlying  such
obligation.  National  and CDL, on the one hand,  and the  Shareholders,  on the
other,  shall  negotiate  in good faith with  respect  to the  propriety  of any
set-off by National or CDL.

         Section 11.6......Offset to Indemnification. All amounts of Damages for
which a party  claims  indemnity  shall  be  offset  by any  insurance  or other
monetary  benefit  received  by the  Indemnified  Party as a result of the event
giving rise to an indemnity  claim,  so that there is no double  recovery by the
Indemnified Party.

         Section 11.7......Limits on Indemnification. The Shareholders shall not
have any  liability  under the  indemnification  provisions  of this  Article 11
unless and until the gross aggregate  amount of claims against the  Shareholders
exceeds  $25,000.  National  and  CDL  shall  not  have  any  liability  to  the
Shareholders under the indemnification  provisions of this Article 11 unless and
until the gross  aggregate  amount of claims  against  National  and CDL exceeds
$25,000.  All amounts of Damages for which a Shareholder may be obligated to pay
to CDL or  National,  whether  pursuant  to a claim  under  this  Article  11 or
otherwise  (except  fraud),  shall not exceed the amount  which the  Shareholder
received as Purchase Price hereunder with respect to the Company as to which the
claim for  indemnification  relates. No party shall be liable to any other under
this  Agreement,  at law or in equity,  (other than an action for  fraud),  with
respect to any matter not  initiated  within the time limits  specified  in this
Article 11 or, if no time period is specified or if the claim is asserted  other
than under this Article 11, within three (3) years of the Closing Date.

         Section  11.8......Form  of Payment.  The  Shareholders may satisfy any
indemnification  obligations by delivery of stock of CDL held by them, valued at
Fair Value or by a reduction of the principal  amount of any Note.  For purposes
of this  Section,  "Fair Value" shall mean the average of the closing  prices of
the common stock of CDL as reported on the NASDAQ National Market System for the
five (5) trading days ending on the second (2nd) trading day prior to receipt of
the shares by CDL.

                                   ARTICLE XII

                                  Miscellaneous

         Section 12.1......Notices. All notices or other communications required
or permitted hereunder shall be in writing and shall be delivered personally, by
facsimile or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally,  or by facsimile,  or if
mailed, five days after the date of mailing, as follows:

If to National or CDL:      380 Allwood Road
                            Clifton, New Jersey 07012
                            Telephone: (973) 471-1005
                            Facsimile: (973) 471-5519
                            Attention:  Mark Carlesimo, Esq., General Counsel

With a copy to:             Lowenstein Sandler PC
                            65 Livingston Avenue
                            Roseland, New Jersey 07068
                            Telephone: (973) 597-2500
                            Facsimile: (973) 597-2400
                            Attention: Alan Wovsaniker, Esq.

If to the Shareholders:     Terry Bozzay
                            13253 Romamy Way Ct.
                            St. Louis, MO  63131

                            Charles Walch
                            312 Planthurst Road
                            St. Louis, MO  63119

                            Randy Cooper
                            540 Coachway
                            Hazelwood, MO  63042

With a copy to:             Thompson Coburn
                            One Mercantile Center
                            St. Louis, Missouri  63101
                            Telephone:   314-552-6000
                            Facsimile:   314-552-7000
                            Attention:  Thomas E. Proost, Esq.

or to such other  address as any party  hereto  shall  notify the other  parties
hereto (as provided above) from time to time.

         Section 12.2. Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated,  except as otherwise provided herein, the
Company and CDL shall each pay its own expenses  incident to this  Agreement and
the  transactions  contemplated  herein.   Notwithstanding  the  foregoing,  the
Shareholders and not the Company shall pay the Company's  expenses to the extent
such expenses are not reflected on the Company's Closing Date balance sheet.

         Section 12.3.  Governing Law; Consent to  Jurisdiction.  This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New Jersey,  without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction
of the courts of the State of New Jersey and the United  States  District  Court
for the  District of New Jersey,  located in Passaic or Essex  County,  State of
Jersey, for the purpose of any suit, action,  proceeding or judgment relating to
or arising  out of this  Agreement  and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party  hereto  anywhere  in the world by the same  methods as are
specified  for the giving of notices under this  Agreement.  Each of the parties
hereto  irrevocably  consents to the  jurisdiction of any such court in any such
suit,  action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or  proceeding  brought in such courts and  irrevocably  waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient forum.

         Section  12.4.  Assignment;  Successors  and  Assigns;  No Third  Party
Rights.  Except as otherwise provided herein, this Agreement may not be assigned
by operation of law or otherwise, and any attempted assignment shall be null and
void.  National and CDL may assign all of their  rights under this  Agreement to
any  Affiliate;  provided  such  Affiliate  assumes  all of the  obligations  of
National and CDL remains  liable  hereunder.  No such  assignment  shall relieve
National or CDL of their obligations hereunder.  This Agreement shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors,  assigns and legal representatives.  This Agreement shall be for the
sole benefit of the parties to this Agreement and their  respective  successors,
assigns and legal  representatives and is not intended,  nor shall be construed,
to give  any  Person,  other  than  the  parties  hereto  and  their  respective
successors,  assigns and legal  representatives,  any legal or equitable  right,
remedy or claim hereunder.

         Section 12.5.     Counterparts;  Facsimile.  This  Agreement  may be
executed  in  counterparts,  each of which  shall  be  deemed  an  original
agreement,  but all of which  together  shall  constitute  one and the same
instrument.  This agreement may be executed by facsimile signature.

         Section 12.6.     Titles and  Headings.  The  headings  and table of 
contents in this  Agreement  are for reference purposes only, and shall not in
any way affect the meaning or interpretation of this Agreement.

         Section 12.7. Entire Agreement. This Agreement, including the Schedules
and  Exhibits  attached  thereto,  constitutes  the entire  agreement  among the
parties with respect to the matters  covered  hereby and supersedes all previous
written, oral or implied understandings among them with respect to such matters.

         Section 12.8.     Amendment and  Modification.  This  Agreement may
only be amended or modified in writing signed by the party against whom
enforcement of such amendment or modification is sought.

         Section 12.9.  Public  Announcement.  Except as may be required by law,
neither the Company or the Shareholders, on the one hand, or National or CDL, on
the other hand,  shall issue any press  release or otherwise  publicly  disclose
this Agreement or the transactions  contemplated  hereby or any dealings between
or among the parties in connection  with the subject  matter hereof  without the
prior  approval of the other.  In the event that any such press release or other
public disclosure shall be required, the party required to issue such release or
other  disclosure  shall  consult in good faith with the other party hereto with
respect to the form and substance of such release or other  disclosure  prior to
the public dissemination thereof.

         Section 12.10. Waiver. Any of the terms or conditions of this Agreement
may be  waived  at any time by the  party or  parties  entitled  to the  benefit
thereof, but only by a writing signed by the party or parties waiving such terms
or conditions.

         Section 12.11. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction  hereunder is too broad to permit  enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.


         Section  12.12.  No Strict  Construction.  Each of the  parties to this
Agreement  acknowledge  that this  Agreement  has been  prepared  jointly by the
parties hereto, and shall not be strictly construed against any party.

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

                                     FIRST CHOICE COURIER AND 
                                     DISTRIBUTION SYSTEMS, INC.
                    
                                     By:  /s/  Charles Walch
                                     Name:  Charles Walch
                                     Title:

                                     REGIONAL EXPRESS II, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     REGIONAL EXPRESS III, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     MANTECA ENTERPRISES, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     /s/  Terry Bozzay
                                     TERRY BOZZAY

                                     /s/  Randy Cooper
                                     RANDY COOPER

                                     /s/ Charles Walch
                                     CHARLES WALCH


                                     NATIONAL EXPRESS COMPANY, INC.

                                     By:  /s/  Mark Carlesimo
                                     Name:  Mark Carlesimo
                                     Title:  Vice president


                                     CONSOLIDATED DELIVERY & LOGISTICS, INC.


                                     By:  /s/  Albert W.  Van Ness
                                     Name:  Albert W. Van Ness, Jr.
                                     Title:  Chairman and CEO



<PAGE>


                                                   -iv-
                                            TABLE OF CONTENTS

                                          Article I - The Merger

Section 1.1.        Delivery and Filing of Articles of Merger...................
Section 1.2.        Effective Time of the Merger................................
Section 1.3.        Articles of Incorporation...................................
Section 1.4.        Certain Information With Respect to the Capital Stock of the
                    Company and National .......................................
Section 1.5.        Effect of Merger............................................
Section 1.6.        Manner of Conversion........................................

                                 Article II - Purchase and Sale of Stock;
                                           Additional Covenants

Section 2.1.        Purchase and Sale of Stock..................................
Section 2.2.        Purchase Price..............................................

                                  Article III - Requirements of Delivery

                                           Article IV - Closing

                                     Article V - Certain Definitions

Section 5.1.        Certain Definitions.........................................
Section 5.2.        Interpretation..............................................

                    Article VI - Representations and Warranties Regarding the
                                          Company

Section 6.1.        Organization and Qualification of the Company...............
Section 6.2.        Authorization...............................................
Section 6.3.        Non-contravention...........................................
Section 6.4.        No Consents.................................................
Section 6.5.        Capitalization..............................................
Section 6.6.        Personal Property...........................................
Section 6.7.        Real Property...............................................
Section 6.8.        Financial Statements........................................
Section 6.9.        Absence of Certain Developments.............................
Section 6.10.       Governmental Authorizations; Licenses.......................
Section 6.11.       Litigation..................................................
Section 6.12.       Undisclosed Liabilities....................................
Section 6.13.       Taxes......................................................
Section 6.14.       Insurance..................................................
Section 6.15.       Environmental Matters.......................................
Section 6.16.       Employee Matters............................................
Section 6.17.       Employee Benefit Plans......................................
Section 6.18.       Proprietary Rights..........................................
Section 6.19.       Accounts Receivable ........................................
Section 6.20.       Contracts...................................................
Section 6.21        Customers and Suppliers.....................................
Section 6.22.       Predecessor Status..........................................
Section 6.23.       Books and Records...........................................
Section 6.24.       Brokers.....................................................
Section 6.25.       Full Disclosure.............................................

                 Article VII - Representations and Warranties Regarding the
                                         Shareholders

Section 7.1.        Authorization...............................................
Section 7.2.        Non-contravention...........................................
Section 7.3.        No Consents.................................................
Section 7.4.        Ownership of the Company's Stock............................
Section 7.5.        Brokers.....................................................
Section 7.6.        Affiliates..................................................
Section 7.7.        Full Disclosure.............................................

                 Article VIII - Representations and Warranties Regarding
                                       National and CDL

Section 8.1.        Organization................................................
Section 8.2.        Authorization...............................................
Section 8.3.        Non-contravention...........................................
Section 8.4.        No Consents.................................................
Section 8.5.        Brokers.....................................................
Section 8.6         SEC Documents...............................................
Section 8.7         CDL Stock...................................................

                                  Article IX - Covenants and Agreements

Section 9.1.        Access and Information......................................
Section 9.2.        Closing Documents...........................................
Section 9.3.        Taxes.......................................................
Section 9.4.        Non-Competition and Confidentiality Agreement...............
Section 9.5.        Audited Financial Statements of the Company.................
Section 9.6.        Best Efforts; Further Assurances............................
Section 9.7.        Compliance with the Securities Act..........................
Section 9.8.        Covenants of CDL and National...............................
Section 9.9.        Personal Guarantees.........................................


                                      Article X - Closing Deliveries

Section 10.1.       Mutual Conditions...........................................
Section 10.2.       Deliveries by the Company and the Shareholders..............
Section 10.3.       Deliveries by CDL and National..............................

                 Article XI - Survival of Representations and Warranties;
                                        Indemnification

Section 11.1.       Survival of Representations and Warranties..................
Section 11.2.       Indemnification.............................................
Section 11.3.       Procedures for Third Party Claims...........................
Section 11.4.       Procedures for Inter-Party Claims...........................
Section 11.5.       Right of Set-Off............................................
Section 11.6.       Offset to Indemnification...................................
Section 11.7.       Limits on Indemnification...................................
Section 11.8.       Form of Payment.............................................

                                       Article XII - Miscellaneous

Section 12.1.       Notices.....................................................
Section 12.2.       Expenses....................................................
Section 12.3.       Governing Law; Consent to Jurisdiction......................
Section 12.4.       Assignment; Successors and Assigns; No Third Party Rights...
Section 12.5.       Counterparts; Facsimile.....................................
Section 12.6.       Titles and Headings.........................................
Section 12.7.       Entire Agreement............................................
Section 12.8.       Amendment and Modification..................................
Section 12.9.       Public Announcement.........................................
Section 12.10.      Waiver......................................................
Section 12.11.      Severability................................................
Section 12.12.      No Strict Construction......................................

                                                Schedules

Schedule 6.1        Foreign Qualifications of the Company
Schedule 6.3        Contravention of Agreements
Schedule 6.4        Consents
Schedule 6.6        Encumbrances
Schedule 6.7        Leased Real Property
Schedule 6.8        Financial Statements
Schedule 6.9        Certain Developments
Schedule 6.10       Authorizations
Schedule 6.11       Litigation
Schedule 6.12       Disclosed Liabilities
Schedule 6.13       Tax Contests
Schedule 6.14       Insurance
Schedule 6.15       Environmental Matters
Schedule 6.16       Employee Matters
Schedule 6.17       Employee Benefit Plans
Schedule 6.18       Proprietary Rights
Schedule 6.19       Accounts Receivable
Schedule 6.20       Contracts
Schedule 6.21       Customers and Suppliers
Schedule 6.22       Predecessor Names
Schedule 7.6        Affiliates
Schedule 9.9        Debt Guaranteed by Shareholders
Schedule 10.2       Promissory Notes

                                   Exhibits

Exhibit A           Allocation of Consideration to be Paid to Shareholders and
                    Ownership of Company's Stock
Exhibit B           Form of the Notes
Exhibit C           Forms of Employment Agreements
Exhibit D           Form of Opinion of Counsel to the Company and the
                    Shareholders




<PAGE>


Exhibit 10.2

                  This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                         7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                         OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Terry Bozzay
                                                              December 8, 1998

Address:                 6400 Spencer Place                           No. MN-3
                         St. Louis, MO  63133

Principal Amount:        $718,293                          Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.


                                 ARTICLE ONE

                                SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.


                                     ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.


                                ARTICLE THREE

                     CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $718,293, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise 
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares.  
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.


                                    ARTICLE FOUR

                              RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                  ARTICLE FIVE

                                  MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                        CONSOLIDATED DELIVERY & LOGISTICS, INC.



[Seal]                                  By:__/s/  William T.  Brannan
                                        Name:  William T. Brannan
                                        Title:  President and COO


<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:


Name of Assignee          Address                              No. of Shares


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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.


                                             Signature

                                             Address

<PAGE>


                  This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                              7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                              OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Randy Cooper
                                                               December 8, 1998
Address:                 6400 Spencer Place                            No. MN-1
                         St. Louis, MO  63133

Principal Amount:        $122,707                           Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.


                                     ARTICLE ONE

                                    SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.


                                     ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.


                                  ARTICLE THREE

                        CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $122,707, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares.
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.


                                     ARTICLE FOUR

                                RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                   ARTICLE FIVE

                                   MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                     CONSOLIDATED DELIVERY & LOGISTICS, INC.



[Seal]                               By:  /s/ William T.  Brannan
                                     Name:  William T.  Brannan
                                     Title:  President and COO





                               ASSIGNMENT


                  FOR VALUE RECEIVED ______________________________________
----------------------------------------------------------------------
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within Note, with respect to the conversion  thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:


Name of Assignee                 Address                      No. of Shares


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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.


                                                                Signature

                                                                Address






<PAGE>


                  This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                              7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                              OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Charles Walch
                                                               December 8, 1998
Address:                 6400 Spencer Place                            No. MN-2
                         St. Louis, MO  63133

Principal Amount:        $559,000                           Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.


                                 ARTICLE ONE

                                SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.


                                      ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.


                                    ARTICLE THREE

                         CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $559,000, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares. 
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.


                                  ARTICLE FOUR

                            RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                     ARTICLE FIVE

                                    MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                       CONSOLIDATED DELIVERY & LOGISTICS, INC.



[Seal]                                  By:  /s/  William T. Brannan
                                        Name:  William T. Brannan
                                        Title:  President and COO





                                  ASSIGNMENT


                  FOR VALUE RECEIVED ______________________________________
----------------------------------------------------------------------
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within Note, with respect to the conversion  thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:


Name of Assignee                   Address                      No. of Shares


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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.


                                                                Signature

                                                                Address

<PAGE>


Exhibit 99.1

FOR IMMEDIATE RELEASE

                                        Drew Kronick, Vice President  
                                        Consolidated Delivery & Logistics, Inc.
                                        (973) 471-1005
     
                                        Lee Laino or Ken DiPaola
                                        The Dilenschneider Group
                                        (212) 922-0900


                    CONSOLIDATED DELIVERY & LOGISTICS, INC. ACQUIRES
                        FIRST CHOICE COURIER AND BOZZAY DELIVERY

       St. Louis Based Courier With Operations in Kansas City & Indianapolis
                         Strengthens CD&L's Midwest Presence

         Clifton, NJ December 9, 1998 - Consolidated Delivery & Logistics,  Inc.
(NASDAQ:  CDLI) announced today that it has acquired privately held First Choice
Courier  and  Bozzay  Delivery.  Based  in St.  Louis  and  with  major  hubs in
Indianapolis  and Kansas City, Mo., the combined  companies had revenues of $8.3
million in 1997. Terms of the acquisition were not disclosed.

         CD&L's Chairman and Chief Executive  Officer,  Albert W. Van Ness, Jr.,
commented, "The acquisition of First Choice and Bozzay was as much about gaining
a mature and aggressive  management  team as it was about  acquiring  proven and
consistently  strong  margins.  CDL's present St. Louis operation will be merged
with First Choice creating a significant presence in this important market."

         Bill   Brannan,   President  and  COO,   added   "CD&L's   strategy  of
consolidating  regional  courier  companies has proven to be highly  successful.
Since 1996, we have acquired and integrated nine strategically located companies
into our operations and have reported  seven  consecutive  quarters of improving
revenue and profit."

         Mr. Brannan added,  "It is a pleasure to welcome Terry Bozzay,  who
founded the original company 22 years ago, to CD&L. Mr. Bozzay will be named the
Midwest  Regional Manager  responsible for CD&L's ground courier  operation from
Chicago/Minneapolis  to Texas and from the  Mississippi to the Rocky  Mountains.
Mr. Randy Cooper and Mr. Charles Pearson,  currently with the Bozzay group, will
become the Regional  Operations Manager and Regional  Controller,  respectively.
Mr.  Charlie  Walch,  a current owner of First  Choice,  will head up the merged
CDL/First Choice St. Louis operation. Ms. Sue Spracjar, currently head of CD&L's
St. Louis operation, will head up the Midwest Regional Sales function and report
to Mr. Bozzay. As important, the majority of the current staff of Bozzay, Kansas
City, headed up by Bryan Ohrman, Bozzay Indianapolis, headed up by Ken Berryhill
and the newly formed St. Louis  CDL/First  Choice business will remain with CD&L
as will the approximate 250 delivery contractors and employee couriers currently
working in the various CDL, First Choice and Bozzay locations.

         Consolidated Delivery & Logistics,  Inc.  headquartered in Clifton, New
Jersey is a full service, same day ground and air delivery and logistics company
with 70 offices in 24 states and the  District  of  Columbia.  The  Company  has
nearly 4,000  employees  and  utilizes  contractors  to provide  time  sensitive
delivery services to thousands of businesses.

         This  press  release   contains  certain   forward-looking   statements
regarding  future  events or the future  financial  performance  of the Company.
These  forward-looking  statements  include  comments  on the  Company's  future
business development. These forward-looking statements involve certain risks and
uncertainties  that may cause the actual events or results to differ  materially
from those  indicated by such  forward-looking  statements.  Potential risks and
uncertainties  include without limitation the risk that the revenues and profits
of the  acquired  companies  will  decrease or fail to improve  over  historical
results,  or that the new  management  group will be unable to  effectively  and
profitably  integrate the two  businesses  or manage the future  business of the
region or the risk that the Company will lack satisfactory merger or acquisition
candidates  and/or  have an  inability  to conclude  acquisitions  or mergers on
satisfactory   terms,  will  be  unable  to  obtain  acquisition   financing  on
satisfactory  terms, or achieve cost savings or additional profits  contemplated
by the Company's  business  management  strategy or other risks specified in the
Company's SEC filing.
[{"type": "8-K", "sequence": "1", "description": "STOCK PURCHASE DECEMBER 8, 1998", "secsgml_size_bytes": 244515}]
{"company-data": {"conformed-name": "CONSOLIDATED DELIVERY & LOGISTICS INC", "cik": "0001000779", "assigned-sic": "4213", "irs-number": "223350958", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-26954", "film-number": "98773408"}, "business-address": {"street1": "380 ALLWOOD ROAD", "city": "CLIFTON", "state": "NJ", "zip": "07012", "phone": "9734711005"}, "mail-address": {"street1": "380 ALLWOOD ROAD", "city": "CLIFTON", "state": "NJ", "zip": "07012"}}
UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON D.C. 20549
                                    FORM 8-K

                                 CURRENT REPORT

    Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

                                December 8, 1998
                Date of Report (Date of earliest event reported)

                     CONSOLIDATED DELIVERY & LOGISTICS, INC.
             (Exact name of Registrant as specified in its charter)

       Delaware                            0-26954             22-3350958
(State or other jurisdiction of        (Commission File       (IRS Employer
incorporation or organization)            Number)           Identification No.)

380 Allwood Road, Clifton, New Jersey                            07012 
(Address of principal executive offices)                       (Zip Code)

(Registrant's telephone number, including area code)         (973) 471-1005

                                 NOT APPLICABLE
      (Former name or former address,  if changed since last report.)
ITEM 2.         Acquisition or Disposition of Assets

         On December 8, 1998, Consolidated Delivery & Logistics, Inc. ("CDL")
         entered into and consummated an agreement (the "Stock Purchase
         Agreement") with its subsidiary, National Express Company, Inc.
         ("National") and First Choice Courier and Distribution Systems, Inc.
         ("First Choice"), Regional Express II, Inc. ("RE II"), Regional Express
         III, Inc. ("RE III") and Manteca Enterprises, Inc. ("Manteca") and
         Terry Bozzay, Randy Cooper and Charles Walch, the shareholders of First
         Choice, RE II, RE III and Manteca, whereby National purchased all of
         the outstanding shares of the capital stock of First Choice, RE II,
         RE III and Manteca.

         The purchase price was comprised of approximately  $2.9 million in cash
         including  estimated  direct  acquisition  costs,  $1.4  million  in 7%
         subordinated  convertible  notes (the  "Notes")  and 206,185  shares of
         CDL's common  stock.  The Notes are due December 8, 2001 with  interest
         payable quarterly commencing February 28, 1999. At the option of either
         the holder or CDL,  under  certain  circumstances  fifty percent of the
         principal amount of the Notes are convertible into fully paid shares of
         CDL's  stock at a  conversion  price of $7 per  share.  The  Notes  are
         subordinate  to all existing or future senior debt of CDL. In addition,
         a  contingent  earn out in the  aggregate  amount of up to  $800,000 is
         payable  based on the  achievement  of certain  financial  goals by the
         newly  formed  division  during the three  year  period  following  the
         closing. CDL financed the acquisition using proceeds from its revolving
         credit facility with First Union Commercial Corporation.

         The description above of the Stock Purchase  Agreement and the Notes is
         a summary and does not purport to be complete. Reference should be made
         to the copies of such documents  filed as exhibits to this report for a
         complete description of their terms.

ITEM 7.         Financial Statements and Exhibits

                a.   Financial Statement of Business Acquired.

                It is impracticable to provide the required financial statements
                for First  Choice,  RE II, RE III and Manteca at this time.  The
                statements  will be filed as an amendment to this report on Form
                8-K as soon as they  are  prepared  and not  later  than 60 days
                after the deadline for filing this Form 8-K.

                b.   Pro Forma Financial Information

                It is  impracticable to provide the required pro forma financial
                statements  for First Choice,  RE II, RE III and Manteca at this
                time.  The  statements  will be  filed as an  amendment  to this
                report  on Form 8-K as soon as they are  prepared  and not later
                than 60 days after the deadline for filing this Form 8-K.

                c.   Exhibits

10.1            Stock Purchase Agreement dated December 8, 1998 by and among
                Consolidated Delivery & Logistics, Inc., National, First Choice,
                RE II, RE III, Manteca, Terry Bozzay, Randy Cooper and Charles
                Walch.

10.2            7% Subordinated Convertible Notes Due 2001 of Consolidated
                Delivery & Logistics, Inc.

99.1            Press Release issued December 9, 1998 regarding acquisition of
                First Choice, RE II, RE III, and Manteca.
SIGNATURE

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

Dated:   December 22, 1998             CONSOLIDATED DELIVERY & LOGISTICS, INC.
                                                   (Registrant)

                                       By:  /s/ Albert W. Van Ness, Jr.
                                            Albert W. Van Ness, Jr.
                                            Chairman of the Board, Chief
                                            Executive Officer and Chief
                                            Financial Officer
Exhibit 10.1

                            STOCK PURCHASE AGREEMENT

         STOCK PURCHASE AGREEMENT  ("Agreement"),  dated as of December 8, 1998,
by and among  CONSOLIDATED  DELIVERY & LOGISTICS,  INC., a Delaware  corporation
("CDL"),  NATIONAL EXPRESS COMPANY,  INC., a Missouri corporation  ("National"),
FIRST CHOICE  COURIER AND  DISTRIBUTION  SYSTEMS,  INC., a Missouri  corporation
("First Choice"),  REGIONAL EXPRESS II, INC., a Missouri  corporation ("RE II"),
REGIONAL  EXPRESS III,  INC.,  a Missouri  corporation  ("RE III"),  and MANTECA
ENTERPRISES,   INC.,  a  Missouri  corporation  ("Manteca"),  and  TERRY  BOZZAY
("Bozzay"),   RANDY  COOPER   ("Cooper"),   and  CHARLES  WALCH  ("Walch",   and
collectively with Bozzay and Cooper the "Shareholders").

                              W I T N E S S E T H:

         WHEREAS,  National is duly organized and existing under the laws of the
State  of  Missouri  and is a  wholly-owned  subsidiary  of CDL,  a  corporation
organized and existing under the laws of the State of Delaware; and

         WHEREAS,  each  of  First  Choice,  RE II,  RE  III  and  Manteca  is a
corporation  organized and existing under the laws of the State of Missouri (all
of  which  corporations  are  hereinafter   collectively   referred  to  as  the
"Company"); and

         WHEREAS, the Shareholders are all of the shareholders of First Choice;
and

         WHEREAS,  Terry Bozzay is the sole shareholder of each of RE II, RE III
and Manteca (all of the capital stock of each of which, along with that of First
Choice, is hereinafter collectively referred to as the "Company's Stock"); and

         WHEREAS, the Shareholders desire to sell and transfer to National,  and
National  desires  to  purchase  from the  Shareholders,  all of the  issued and
outstanding  shares of the Company's  Stock, all as more  specifically  provided
herein;

         NOW,  THEREFORE,  in  consideration  of the  premises and of the mutual
agreements,  representations,  warranties and covenants  contained  herein,  and
intending to be legally bound, the parties hereto hereby agree as follows:

                                    ARTICLE I

                                   The Merger

         Section 1.1 Delivery and Filing of Articles of Merger.  The  respective
Boards of Directors of National and RE II (which  corporations  are  hereinafter
collectively referred to as "Constituent  Corporations") have determined that it
is in the best interests of the Constituent  Corporations  and their  respective
shareholders  that RE II merge with and into National pursuant to this Agreement
and the  applicable  provisions  of the  laws of the  State  of  Missouri,  such
transaction sometimes being herein called the "Merger." The Merger is subject to
the  terms  and  conditions  of  this  Agreement  and  to  the  representations,
warranties and agreements  contained herein.  The Constituent  Corporations will
cause  Articles of Merger with respect to the Merger (the  "Articles of Merger")
to be signed, acknowledged and filed with the Secretary of State of the State of
Missouri.  The Constituent  Corporations  will also make all other filings to be
made with any  relevant  authority in the  jurisdiction  in which the Company is
organized, on or before the "Consummation Date" as defined in Article 4.

         Section 1.2 Effective Time of the Merger.  The  "Effective  Time of the
Merger"  shall be the time when the  Articles  of Merger are duly filed with the
Secretary of State of the state first set forth in Section 1.1 above.  National,
the party  surviving the Merger,  is  hereinafter  sometimes  referred to as the
"Surviving Corporation".

         Section 1.3 Articles of  Incorporation,  By-laws and Board of Directors
of Surviving  Corporation.  At the Effective Time of the Merger:

         (a) the Articles of Incorporation of National shall become the Articles
of Incorporation of the Surviving  Corporation;  and subsequent to the Effective
Time of the Merger,  such  Articles of  Incorporation  shall be the  Articles of
Incorporation of the Surviving Corporation until changed as provided by law;

         (b) the By-laws of National  shall become the By-laws of the  Surviving
Corporation;  and subsequent to the Effective  Time of the Merger,  such By-laws
shall be the By-laws of the Surviving Corporation until they shall thereafter be
duly amended;

         (c) the  directors of National  shall serve as the members of the Board
of  Directors  of the  Surviving  Corporation.  The  Board of  Directors  of the
Surviving Corporation shall hold office subject to the provisions of the laws of
the State of Missouri  and of the Articles of  Incorporation  and the By-laws of
the Surviving Corporation; and

         (d) the  persons  who  shall  serve as the  officers  of the  Surviving
Corporation are the current officers of National in their current capacity. Each
officer shall hold office and serve,  subject to the  provisions of the Articles
of Incorporation and the By-Laws of the Surviving Corporation,  until his or her
successor is elected and  qualified.  The Board of  Directors  of the  Surviving
Corporation  shall designate such  additional  officers as it deems necessary in
its discretion.

         Section 1.4 Certain  Information  With Respect to the Capital  Stock of
the Company and National. The respective designations and numbers of outstanding
shares and voting rights of each class of outstanding capital stock of RE II and
National as of the date of this Agreement are as follows:

         (a)      the  authorized  capital  stock of RE II consists  of 30,000  
shares of common  stock,  $1.00 par value of which 1,000 shares are issued and
outstanding,

         (b) the authorized  capital stock of National  consists of 55 shares of
common  stock,  no par value,  of which 55 shares  are  issued  and  outstanding
("National Stock").

         Section 1.5 Effect of Merger.  Except as herein specifically set forth,
the identity,  existence,  purposes,  powers, objects,  franchises,  privileges,
rights and immunities of RE II shall  continue  unaffected and unimpaired by the
Merger  and the  corporate  franchises,  existence  and rights of RE II shall be
merged into National, and National, as the Surviving Corporation, shall be fully
vested therewith. At the Effective Time of the Merger, the separate existence of
RE II shall  cease and,  in  accordance  with the terms of this  Agreement,  the
Surviving Corporation shall possess all the rights,  privileges,  immunities and
franchises,  of a public as well as of a private nature; and all property, real,
personal  and  mixed,  and  all  debts  due  on  whatever   account,   including
subscriptions  to shares,  and all other  choices  in action,  and all and every
other interest of or belonging to or due to RE II and to National shall be taken
and deemed to be  transferred  to, and  vested  in,  the  Surviving  Corporation
without further act or deed; and all property, rights and privileges, powers and
franchises  and all and every other  interest shall be thereafter as effectually
the property of the  Surviving  Corporation  as they were of RE II and National.
The Surviving  Corporation  shall  thenceforth be responsible and liable for all
the liabilities and obligations of RE II and National and any claim existing, or
action or proceeding  pending, by or against RE II or National may be prosecuted
as if the  Merger  had not taken  place,  or the  Surviving  Corporation  may be
substituted in its place. Neither the rights of creditors nor any liens upon the
property of RE II or of National shall be impaired by the Merger, and all debts,
liabilities  and duties of RE II and of National  shall attach to the  Surviving
Corporation, and may be enforced against it to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it.

         Section 1.6 Manner of  Conversion.  The manner of converting the shares
of RE II Stock issued and outstanding immediately prior to the Effective Time of
the Merger into restricted  shares of common stock of CDL, $.001 par value ("CDL
Stock"), shall be as follows:

         As of the  Effective  Time of the  Merger,  subject  to the  terms  and
conditions of this Agreement,  by virtue of the Merger and without any action on
the part of any Constituent Corporation or of their respective shareholders:

                  (i)......all  of the  shares  of the RE II  Stock  issued  and
outstanding  immediately  prior to the Effective  Time of the Merger  shall,  by
virtue of the Merger and without any action on the part of the holder thereof or
any Constituent Corporation,  automatically be converted in the aggregate into a
number of restricted voting shares of common stock of CDL, $.001 par value ("CDL
Stock"), with a value equal to Fair Value of $600,000,  which shall be delivered
to Bozzay, as the sole shareholder of RE II at the Closing. For purposes of this
Section,  the term "Fair  Value"  shall mean  $2.91,  the average of the closing
prices of the common  stock of CDL as  reported  on the NASDAQ  National  Market
System for the five (5)  trading  days  ending on the second  (2nd)  trading day
prior to October 30, 1998; and

                  (ii).....each  share of National Stock issued and  outstanding
immediately  prior to the Effective  Time of the Merger shall,  by virtue of the
Merger  and  without  any  action  on the  part  of the  holder  thereof  or any
Constituent Corporation,  remain issued and outstanding and shall constitute all
of the issued and outstanding  shares of the Surviving  Corporation  immediately
after the Effective Time of the Merger.

                                   ARTICLE II

                           Purchase and Sale of Stock;
                              Additional Covenants

         Section 2.1.  Purchase and Sale of Stock. Upon the terms and subject to
the  conditions  of this  Agreement  and on the  basis  of the  representations,
warranties  and  agreements  contained  herein,  at the  Closing  (as defined in
Article IV), the Shareholders shall sell, assign,  transfer,  convey and deliver
to  National  all of the  issued  and  outstanding  shares of the Stock of First
Choice,  RE III and Manteca,  and National  shall  purchase such shares from the
Shareholders.

         Section 2.2. Purchase Price. The aggregate  purchase price of the Stock
of First  Choice,  RE III and Manteca  shall be  allocated  among the issued and
outstanding shares of First Choice, RE III and Manteca as follows:

         (a)  The  following   aggregate   consideration   for  the  issued  and
outstanding  shares of First Choice shall be allocated among the Shareholders as
set forth in Exhibit A and payable in three parts as follows:

                  (i)......$1,330,122  shall be paid at the  Closing  in cash by
wire  transfer  to an  account  or accounts  of the  Shareholders  specified  in
writing  by the  Shareholders  or by one or more  certified  or bank cashier's 
checks payable to the order of the Shareholders;

                  (ii).....$1,400,000  shall be paid at the  Closing by delivery
of subordinated unsecured convertible balloon notes of CDL with a three (3) year
term payable to the  Shareholders  substantially in the form of Exhibit B hereto
(the "Notes"); and

                  (iii)....78.9634  percent of the contingent  earn out payments
described  in Section  2.2(c)  below shall be paid to the  Shareholders,  in the
proportions  set forth in Exhibit A, subject to the  conditions and at the times
provided therein.

         (b)  The  following   aggregate   consideration   for  the  issued  and
outstanding  shares  of RE III and  Manteca  shall be  payable  in two  parts as
follows:

                  (i)......$1,476,843  shall be paid at the  Closing  in cash by
wire transfer to an account or accounts of Bozzay specified in writing by Bozzay
or by one or more  certified or bank  cashier's  checks  payable to the order of
Bozzay; and

                  (ii).....21.0366  percent of the contingent  earn out payments
described  in  Section  2.2(c)  below  shall be paid to  Bozzay  subject  to the
conditions and at the times provided therein.

         (c) For  purposes of this  Section,  any  contingent  earn out payments
shall be determined and paid in accordance with the following provisions:

                  (i) First  Period  Earn Out. On or before the date ninety (90)
days after the end of the First Measurement Period, CDL shall determine the EBIT
of the Division for the First Measurement Period. If such EBIT exceeds $640,000,
CDL shall pay to the  Shareholders  in the aggregate not later than 5 days after
such date an earn out payment  equal to  $1,500.00  for each $1,000 by which the
EBIT exceeds such $640,000; provided, however that such earn out payment for the
First Measurement Period shall in no event exceed $240,000.

                  (ii) Second Period Earn Out. On or before the date ninety (90)
days after the end of the Second  Measurement  Period,  CDL shall  determine the
EBIT of the Division  for the Second  Measurement  Period.  If such EBIT exceeds
$850,000,  CDL shall pay to the  Shareholders  in the aggregate not later than 5
days after such date an earn out payment  equal to $1,866.67  for each $1,000 by
which the EBIT  exceeds  such  $850,000;  provided,  however  that such earn out
payment for the Second Measurement Period shall in no event exceed $280,000.

                  (iii) Third Period Earn Out. On or before the date ninety (90)
days after the end of the Third Measurement Period, CDL shall determine the EBIT
of the  Division  for  the  Third  Measurement  Period.  If  such  EBIT  exceeds
$1,050,000,  CDL shall pay to the Shareholders in the aggregate not later than 5
days after such date an earn out payment  equal to $1,866.67  for each $1,000 by
which the EBIT exceeds  such  $1,050,000;  provided,  however that such earn out
payment for the Third Measurement Period shall in no event exceed $280,000.

                  (iv)     General Earn Out Provisions.

                  (A) CDL shall cause the books and  records of the  Division to
be  maintained  as a separate  profit  center  during each earn out  Measurement
Period,  so that any amounts due as earn out  payments  pursuant to this Section
can be determined.  The EBIT for each Measurement  Period shall be determined in
accordance  with GAAP  consistently  applied and  consistent  with CDL's regular
audited  financial  reports  required to be provided  with its SEC filings.  The
determination  for EBIT for each  Measurement  Period shall initially be made by
CDL.  At the same time as payment of the earn out  payment  for any  Measurement
Period is made (or if no earn out payment is made for a Measurement Period, then
at the same time such earn out payment would have been due for such  Measurement
Period if one was made),  CDL shall deliver  statements,  in reasonable  detail,
detailing the calculation of the EBIT for such period and the calculation of the
earn out payment,  if any, for such period, all certified by the Chief Financial
Officer  of  CDL.  Each  Shareholder  shall  have  15  days  to  object  to such
calculation. If no objection is made, CDL's calculation shall be deemed correct.
If objection is made,  CDL will make all work papers,  personnel and  applicable
books and records available to the objecting  Shareholders and their accountants
for review at reasonable  times and on reasonable  notice.  If the  Shareholders
believe that CDL's calculation was incorrect, to the extent possible, they shall
state in a non-binding writing the amount of the earn out they believe they were
entitled  to, and the basis for such belief in  reasonable  detail.  CDL and the
Shareholders then shall negotiate in good faith for a period of at least 30 days
from  the  receipt  of  both  the  objection  notice  and  the  claimed  correct
calculation from Shareholders, in an attempt to agree on an earn out payment for
such period.  If the parties  cannot reach such  agreement,  they shall choose a
"Big 5" independent  accounting firm (the  "Determining  Firm") to determine the
earn out amount.  The  Determining  Firm shall  determine the earn out amount as
expeditiously  as possible,  and such  determination  shall be final and binding
upon the parties. The parties shall bear their own costs and expenses except for
the fees of the Determining  Firm. The fees and expenses of the Determining Firm
shall be paid as follows:  (x) if the final earn out payment is equal to or less
than  the  earn  out  payment  initially  calculated  by CDL,  then the fees and
expenses of the Determining Firm shall be paid by the  Shareholders,  (y) if the
final earn out payment is equal to or more than the earn out  payment  initially
claimed by the Shareholders,  then CDL shall pay all of the fees and expenses of
the  Determining  Firm and (z) if the final earn out  payment  is between  CDL's
initial calculation and the Shareholders' initial calculation, CDL shall pay 50%
of the fees of the Determining Firm and the Shareholders shall pay 50%. Any fees
and  expenses  paid  by  the  Shareholders   shall  be  payable  only  by  those
Shareholders actually challenging the CDL earn out calculation, and then payable
by  the  percentage  of  the  earn  out  payments  to  all  of  the  challenging
Shareholders that each such challenging Shareholder receives.

                  (B) In the event that the earn out payment for any Measurement
Period is limited by the maximum  payment  allowed for that  Measurement  Period
(i.e.,  $240,000 for the First Measurement  Period), the excess EBIT (i.e., EBIT
above the EBIT needed to earn the  maximum  earn out payment for the period) may
be credited to the  immediately  prior or subsequent  Measurement  Period to the
extent that the earn out payments for such other  Measurement  Period or Periods
shall not have exceeded the respective  maximum payments allowable in such other
Measurement Period or Periods.

                  (C) Any  earn out  payments  shall be  allocated  pursuant  to
Sections  2.2(a)(iii)  and  2.2(c)(ii),  and,  to the  extent  allocated  to the
Shareholders, among the Shareholders in accordance with Exhibit A.

                  (D) If the maximum of earn out  payments  are  achieved  for a
Measurement  Period,  then  non-qualified  stock options shall be granted to the
Shareholders  and  certain  other  persons  to  the  extent  provided  in  their
respective employment agreements with National referred to in Section 10.2.

                                   ARTICLE III

                            Requirements of Delivery

         The Shareholders shall deliver to CDL, at the Closing, the certificates
representing the Company's Stock,  with transmittal  letters in form approved by
CDL duly executed by the Shareholders,  and with all necessary  transfer tax and
other  revenue  stamps,  acquired  at the  Shareholders'  expense,  affixed  and
canceled.  The Shareholders agree promptly to cure any deficiencies with respect
to the documents of conveyance with respect to the Company's Stock.

                                   ARTICLE IV

                                     Closing

         The closing of the transactions  contemplated by this Agreement (herein
referred  to as the  "Closing")  shall  take  place  by  exchange  of  facsimile
signature  pages or at the  offices of CDL at 380  Allwood  Road,  Clifton,  New
Jersey 07012 on December 8, 1998 at 11:00 a.m. or at such other time and date as
National, CDL, the Company and the Shareholders,  may mutually agree, which date
shall be referred to as the "Closing Date".

                                    ARTICLE V

                               Certain Definitions

         Section 5.1.......Certain  Definitions. As  used  in  this  Agreement,
the  following  terms  have  the respective meanings set forth below.

         "Accounts Receivable" has the meaning ascribed to such term in
Section 6.19.

         "Affiliate"  means,  with  respect to any Person,  any other Person who
directly  or  indirectly,  through  one or  more  intermediaries,  controls,  is
controlled by, or is under common control with, such Person.  The term "control"
means the  possession,  directly or indirectly,  of the power to direct or cause
the direction of the  management and policies of a Person,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise,  and the  terms
"controlled" and "controlling" have meanings correlative thereto.

         "Agreement" means this Stock Purchase Agreement.

         "Authorizations" has the meaning ascribed to such term in Section 6.10.

         "Business Day" means a day,  other than a Saturday or Sunday,  on which
commercial banks in New Jersey are open for the general transaction of business.

         "CDL Stock" has the meaning ascribed to such term in Section 2.2.

         "Closing" has the meaning ascribed to such term in Article IV.

         "Closing Date" has the meaning ascribed to such term in Article IV.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company's Accountants" means Larson, Allen and Weishar.

         "Company's Stock" has the meaning ascribed to such term in the recitals
to this Agreement.

         "Contracts" has the meaning ascribed to such term in Section 6.20.

         "Corporate  Overhead" means any cost,  liability or expense incurred by
CDL to own, control,  govern,  administer,  finance, assist or otherwise oversee
its and its  subsidiaries  operating  businesses that is not attributable to the
day to day  operations  of the Division.  Corporate  Overhead  includes  without
limitation  any inter company  allocation  formula,  fee for services or similar
arrangement  whereby  the  Division  incurs an expense  or charge  for  overhead
incurred or services or other  consideration  provided by CDL that is not a cost
of  operating  the  Division.  It  does  not  include  compensation  paid to the
Shareholders and other employees with responsibility for managing the day to day
operations of the Division.

         "Damages" has the meaning ascribed to such term in Section 11.2.

         "Division"  means the former  business of the Company and the St. Louis
operation of National, as collectively operated by National after the Closing as
a separate profit center.

         "EBIT" means earnings before interest and taxes, computed in accordance
with Section  2.2(c)(iv)(A);  provided,  however, that any post-Closing goodwill
amortization  as a result of the  transactions  contemplated  by this  Agreement
shall  be  excluded.   Any  pre-Closing  goodwill  and  other  amortization  and
depreciation shall be included in such computation. Corporate Overhead shall not
be expensed or otherwise  deducted  from earnings in the EBIT  calculation.  Any
amortization and depreciation on assets held by the Company immediately prior to
the  Closing  based on  historic  cost  shall be  treated  as an expense in such
calculation. If CDL or National acquires any entity (or the assets thereof) (the
"Target"),  and if the Target is not to be operated as a separate profit center,
but rather,  with the mutual  consent of the parties,  is to have its operations
integrated  into the Division  and managed by Bozzay,  then the  thresholds  for
reaching each Earn-Out  Payment shall be increased by the EBIT  projections  for
such  Target  (with such  projections  being  those used by CDL or  National  in
determining  the purchase price for the Target) and the EBIT of such Target will
be included in the EBIT calculation for the Division.  If on the other hand, the
Target is to be operated as a separate  profit  center,  but is to be managed by
the  Division  and by Bozzay,  then EBIT  arising  from such  Target will not be
included  in the EBIT  calculation  for the  Division,  but the  expenses of the
Division in operation  the Target  shall be allocated to the Target  pursuant to
CDL's customary  accounting practices and such expenses shall not be included in
the EBIT calculation of the Division.

         "Employee Benefit Plan" has the meaning ascribed to such term in
Section 6.17.

         "Encumbrances" has the meaning ascribed to such term in Section 6.3.

         "Environmental  Laws" means any federal,  state or local law,  statute,
ordinance, rule, regulation, license, permit, authorization,  approval, consent,
court order, judgment, decree,  injunction,  code, requirement or agreement with
any Governmental Authority, (x) relating to pollution (or the cleanup thereof or
the filing of information with respect thereto),  human health or the protection
of air, surface water, ground water, drinking water supply, land (including land
surface or subsurface),  plant and animal life or any other natural resource, or
(y)  concerning  exposure  to,  or  the  use,  storage,  recycling,   treatment,
generation,  transportation,   processing,  handling,  labeling,  production  or
disposal  of  Regulated  Substances,  in  each  case  as  amended  and as now or
hereafter in effect.  The term Environmental Law includes,  without  limitation,
(i) the Comprehensive  Environmental  Response Compensation and Liability Act of
1980, the Water  Pollution  Control Act, the Clean Air Act, the Clean Water Act,
the Solid Waste Disposal Act (including the Resource  Conservation  and Recovery
Act of 1976 and the  Hazardous and Solid Waste  Amendments  of 1984),  the Toxic
Substances  Control Act, the  Insecticide,  Fungicide and  Rodenticide  Act, the
Occupational  Safety  and  Health  Act of 1970,  each as  amended  and as now or
hereafter in effect, and (ii) any common law or equitable  doctrine  (including,
without  limitation,  injunctive  relief and tort  doctrines such as negligence,
nuisance,   trespass  and  strict   liability)  that  may  impose  liability  or
obligations  for  injuries  or damages due to or  threatened  as a result of the
presence of, exposure to, or ingestion of, any Regulated Substance.

         "Financial Statements" has the meaning ascribed to such term in 
Section 6.8.

         "First  Measurement  Period"  shall  mean the  period  of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the Closing Date.

         "GAAP" means generally accepted  accounting  principles as in effect in
the United States on the date of this Agreement.

         "Governmental   Authority"   means  any   national,   federal,   state,
provincial,  county, municipal or local government,  foreign or domestic, or the
government of any political subdivision of any of the foregoing,  or any entity,
authority,   agency,  ministry  or  other  similar  body  exercising  executive,
legislative, judicial, regulatory or administrative authority or functions of or
pertaining to  government,  including any authority or other  quasi-governmental
entity established to perform any of such functions.

         "Indemnified Party" has the meaning ascribed to such term in
Section 11.2.

         "Indemnifying Party" has the meaning ascribed to such term in 
Section 11.2

         "Leased Real Property" has the meaning ascribed to such term in
Section 6.7.

         "Material  Adverse  Change"  means a  material  adverse  change  in the
business, financial condition, results of operations or prospects (financial and
other) of the entity.

         "Material  Adverse  Effect"  means a  material  adverse  effect  on the
business, financial condition or results of operations of the entity. Any matter
or matters which in the aggregate involve $25,000 or more shall presumptively be
deemed to be material.

         "Person" means an  individual,  partnership,  corporation,  joint stock
company,  unincorporated organization or association, trust or joint venture, or
a governmental agency or political subdivision thereof.

         "Proprietary Rights" means all patents,  patent  registrations,  patent
applications,   trademarks,   service   marks,   trademark   and  service   mark
registrations and applications therefor,  copyrights,  copyright  registrations,
copyright  applications,  technology,  inventions,  computer software,  data and
documentation   (including   electronic   media)  (other  than   shrink-wrap  or
off-the-shelf  software and  accompanying  data and  documents),  trade secrets,
know-how, customer lists, processes, other intellectual property and proprietary
information  or  rights  related  to or used  in the  conduct  of the  Company's
business;  and permits,  licenses or other  agreements  to or from third parties
regarding the foregoing.

         "Regulated  Substances"  means pollutants,  contaminants,  hazardous or
toxic  substances,  compounds  or  related  materials  or  chemicals,  hazardous
materials,  hazardous waste, flammable explosives (including, but not limited to
radon,  radioactive materials,  asbestos,  urea formaldehyde foam insulation and
polychlorinated  biphenyls),   medical  waste  or  by-products,   petroleum  and
petroleum products (including, but not limited to, waste petroleum and petroleum
products) as regulated under applicable Environmental Laws.

         "SEC" means the Securities and Exchange Commission.

         "SEC Documents" has the meaning ascribed to such term in Section 9.7.

         "Second  Measurement  Period"  shall  mean the  period of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the first anniversary of the Closing Date.

         "Securities Act" means the Securities Act of 1933, as amended.

         "Survival Period" has the meaning ascribed to such term in
Section 11.1.

         "Third  Measurement  Period"  shall  mean the  period  of  twelve  (12)
consecutive  calendar  months  beginning on the first day of the first  calendar
month following the second anniversary of the Closing Date.

         "Third Party Claim" has the meaning ascribed to such term in
Section 11.3.

         Section  5.2.......Interpretation.  Unless  otherwise  indicated to the
contrary  herein  by the  context  or use  thereof:  (i)  the  words,  "herein,"
"hereto,"  "hereof"  and words of similar  import  refer to this  Agreement as a
whole  and  not to any  particular  Section  or  paragraph  hereof;  (ii)  words
importing  the  masculine  gender  shall also  include the  feminine and neutral
genders,  and vice versa;  (iii) words importing the singular shall also include
the plural,  and vice versa; (iv) the word "Company" shall include each of First
Choice, RE II, RE III and Manteca individually as well as collectively;  and (v)
the  word  "Shareholders"  shall  include  each  of  Bozzay,  Cooper  and  Walch
individually as well as collectively.

                                   ARTICLE VI

              Representations and Warranties Regarding the Company

         Each Company and its Shareholders, jointly and severally, represent and
warrant (it being expressly  understood that the  representations and warranties
of Cooper  and Walch  herein  shall  pertain  solely to First  Choice,  the term
"knowledge  of the  Shareholders"  is limited in the case of Cooper and Walch to
their knowledge of First Choice, and the representations and warranties of First
Choice  pertain  only to itself,  and no other  Company) to National  and CDL as
follows:

         Section  6.1.......Organization  and Qualification of the Company.  The
Company is a corporation  duly organized,  validly existing and in good standing
under the laws of the State of Missouri, with full corporate power and authority
to own or lease  its  properties  and  assets  and to carry on its  business  as
presently  conducted,  and  is  duly  qualified  to  do  business  as a  foreign
corporation and is in good standing in each jurisdiction listed in Schedule 6.1,
which  constitute  all of the  jurisdictions  in which the Company is  currently
conducting its business. The Company has previously provided to National and CDL
true and complete copies of (i) its Articles of Incorporation and all amendments
thereto,  and  (ii)  its  by-laws  and all  amendments  thereto.  Other  than as
indicated  on  Schedule  6.1 the  business of the  Company is  conducted  solely
through the Company and the Company does not own,  directly or  indirectly,  any
subsidiaries.

         Section  6.2.......Authorization.   The  Company  has  full  power  and
authority,  corporate  and other,  to execute and deliver this  Agreement and to
perform its obligations hereunder, all of which have been duly authorized by all
requisite  corporate action.  This Agreement has been duly authorized,  executed
and delivered by the Company and  constitutes  a valid and binding  agreement of
the Company, enforceable against the Company in accordance with its terms.

         Section  6.3.......Non-contravention.  Except as set forth in  Schedule
6.3, neither the execution and delivery of this Agreement nor the performance by
the Company of its  obligations  hereunder  will (i)  contravene  any  provision
contained in its Articles of Incorporation or by-laws, (ii) violate or result in
a breach (with or without the lapse of time, the giving of notice or both) of or
constitute a default under (A) any contract, agreement,  commitment,  indenture,
mortgage, lease, pledge, note, license, permit or other instrument or obligation
or (B) any judgment, order, decree, law, rule or regulation or other restriction
of any Governmental  Authority,  in each case to which the Company is a party or
by which it is bound or to which any of its assets or  properties  are  subject,
(iii) result in the creation or imposition of any lien, claim, charge, mortgage,
pledge,   security   interest,   equity,   restriction   or  other   encumbrance
(collectively, "Encumbrances") on any of the assets or properties of the Company
if such Encumbrance  would have a Material Adverse Effect, or (iv) result in the
acceleration  of, or permit any Person to  accelerate or declare due and payable
prior to its stated maturity, any liability.

         Section 6.4.......No Consents.  Except as set forth in Schedule 6.4, no
notice to, filing with, or authorization,  registration,  consent or approval of
any  Governmental  Authority  or other Person is  necessary  for the  execution,
delivery  or  performance  of  this  Agreement  or  the   consummation   of  the
transactions contemplated hereby by the Company.

         Section  6.5.......Capitalization.   The  respective  designations  and
numbers of  authorized  and issued and  outstanding  shares and voting rights of
each class of outstanding capital stock of the Company are as follows:

                           (a) the  authorized  capital  stock of  First  Choice
                  consists of 30,000 shares of common stock,  $1.00 par value of
                  which 10,000 shares are issued and outstanding,

                           (b) the authorized capital stock of RE II consists of
                  30,000 shares of common stock,  $1.00 par value of which 1,000
                  shares are issued and outstanding,

                           (c) the  authorized  capital stock of RE III consists
                  of 30,000 shares of common stock, $1.00 par value of which 100
                  shares are issued and outstanding, and

                           (d) the authorized  capital stock of Manteca consists
                  of 30,000 shares of common stock, $1.00 par value of which 100
                  shares are issued and outstanding.

The Company does not have any shares of its capital stock  reserved for issuance
and the Company does not have any outstanding options,  warrants,  rights, calls
or commitments  relating to its capital stock or any  outstanding  securities or
obligations convertible into or exchangeable for, or giving any Person any right
to subscribe for or acquire from it, any shares of its capital stock.  There are
no  pre-emptive or other  subscription  rights with respect to any shares of the
capital stock of the Company and all of the issued and outstanding shares of the
capital  stock of the Company have been duly  authorized,  validly  issued,  are
fully paid and are nonassessable.

         Section  6.6.......Personal  Property.  Except as set forth in Schedule
6.6, as disclosed in detail in the Financial Statements,  or liens for taxes not
yet due,  the Company has good and  marketable  title to (or valid  leasehold or
contractual  interests in) all personal property used in its business,  free and
clear  of any  Encumbrances.  To the  Shareholders'  knowledge,  all  machinery,
equipment,  furniture, fixtures and other personal property of the Company is in
good  operating  condition  and fit for  operation  in the  ordinary  course  of
business (subject to normal wear and tear).

         Section  6.7.......Real  Property.  The  Company  does not own any real
property or real  estate.  Except as set forth in Schedule  6.7, the Company has
valid  leasehold title to all real estate and real property used in its business
(the "Leased Real Property"),  free and clear of all  Encumbrances.  All plants,
structures  and  buildings  leased  by of  the  Company  are in  good  operating
condition and fit for operation in the ordinary  course of business  (subject to
normal wear and tear).  The Company has  delivered  to National and CDL true and
complete  copies of any leases for the Leased Real  Property.  The Company is in
compliance  with all material terms and conditions of such leases and is subject
to no past due  obligations or contingent  liabilities in respect of such leased
premises.  To the  best  knowledge  of the  Company  and the  Shareholders,  the
landlords under such leases also are in compliance with the terms and conditions
of such  leases.  The  Company  is not in  violation  of any  building,  zoning,
anti-pollution,   health,   occupational  safety  or  other  law,  ordinance  or
regulation  regarding its plants,  structures and equipment or their operations.
To the extent that the Company is a tenant under a month-to-month  or oral lease
with respect to the Spencer Place  property  identified on Schedule 6.7,  Bozzay
will assure (a) that the Company will be  permitted  to remain in such  premises
after  Closing for a reasonable  period of time not to exceed 90 days,  (b) that
the rental for such  properties  will at no time exceed a fair market rental and
(c) that the Company will have no liability to the landlord  upon a  termination
of such lease or for any other costs associated with the premises except for any
damages  actual  caused by the  Purchaser  between the Closing Date and the date
that the Purchaser vacates the property.

         Section 6.8.  Financial  Statements.  (a) Each  Company has  previously
delivered  to National and CDL (i) a true and  complete  copy of each  Company's
audited  balance sheet and the related  audited  statements of earnings and cash
flows for the  fiscal  years then  ended,  with  notes  thereto,  audited by the
Company's Accountants,  as listed on Schedule 6.8 (collectively,  the "Financial
Statements").  The Financial  Statements  have been prepared in conformity  with
GAAP,  applied on a  consistent  basis  throughout  the  respective  periods and
present fairly the financial  condition and results of operations of the Company
as of and for the periods included therein.

         (b) Within  fifteen  (15) days of the date  hereof,  the Company  shall
deliver to CDL and National a true and complete copy of each Company's unaudited
balance  sheet as of the Closing Date and the related  unaudited  statements  of
earnings  and cash  flows for the  eleven  (11)  months  and 8 days then  ended,
certified by the Company's chief financial officer

         Section 6.9.......Absence of Certain Developments.  Except as set forth
in Schedule 6.9, since the date of the most recent audited Financial  Statements
of each  Company,  there  has not  been  any  Material  Adverse  Change,  or any
development  which  could  reasonably  be  expected  to result in a  prospective
Material Adverse Change.  Except as set forth in Schedule 6.9, since the date of
the most recent audited Financial  Statements of each Company,  each Company has
conducted its businesses in the ordinary and usual course  consistent  with past
practices and has not (i) sold, leased, transferred or otherwise disposed of any
of its assets  (other  than  dispositions  in the  ordinary  course of  business
consistent  with past  practices),  (ii) breached,  terminated or amended in any
material  respect any contract or lease to which it is a party or to which it is
bound or to which its  properties  are  subject,  (iii)  amended its Articles of
Incorporation or by-laws or taken any action in contemplation of an amendment to
such Articles of Incorporation or by-laws or in contemplation of its liquidation
or  dissolution  and, to its best  knowledge  after due  investigation,  no such
action has been taken by its shareholders,  directors or officers, (iv) declared
or paid any dividend or  distribution  on its capital  stock or  repurchased  or
otherwise  acquired  any shares of its  capital  stock or any  option,  warrant,
right,  call or  commitment  relating  to its capital  stock or any  outstanding
securities or obligations  convertible  into or exchangeable  for, or giving any
Person any right to subscribe  for or acquire from it, any shares of its capital
stock,  (v) suffered any material  loss,  damage or  destruction  whether or not
covered  by  insurance,  (vi)  made any  change  in the  accounting  methods  or
practices  it follows,  whether for general  financial  or tax  purposes,  (vii)
incurred any liabilities (other than in the ordinary course of business) none of
which, individually or in the aggregate, are material, (viii) incurred,  created
or suffered to exist any Encumbrances on its assets, except those created in the
ordinary  course of business,  none of which,  individually or in the aggregate,
are material,  (ix) increased the  compensation  payable or to become payable to
any of its  officers or employees or  increased  any bonus,  severance,  accrued
vacation,  insurance,  pension  or  other  Employee  Benefit  Plan,  payment  or
arrangement made by it for or with any such officers or employees,  (x) suffered
any labor dispute,  strike or other work stoppage, (xi) made or obligated itself
to make any capital  expenditures  in excess of $10,000  individually  or in the
aggregate,  (xii) entered into any contract or other  agreement  requiring it to
make payments in excess of $10,000 per annum,  individually or in the aggregate,
other than in the ordinary  course of business  consistent  with past practices,
(xiii)  made  any  payments  to  or  entered  into  any  transactions  with  any
Shareholder or family member of any Shareholder  except for salaries paid to the
Shareholders  consistent with their historic salaries and the budgets previously
delivered  to  CDL,  (xiv)  breached  or  violated  any  law,  statute,  rule or
regulation  applicable  to the Company or its business in any material  respect,
(xv) suffered any Material Adverse Changes in its financial  position or results
of operations, or (xvi) entered into any agreement to do any of the foregoing.

                  Section  6.10.  Governmental  Authorizations;   Licenses.  The
business  of the  Company has been  operated  in  material  compliance  with all
applicable laws, rules,  regulations,  codes,  ordinances,  orders, policies and
guidelines of all Governmental Authorities,  including but not limited to, those
related  to:  pricing,  sales or  distribution  of  products,  antitrust,  trade
regulation, trade practices,  sanitation, land use and similar laws. The Company
has all  permits,  licenses,  approvals,  certificates,  titles,  fuel  permits,
franchises,  operating authorities (including any necessary FAA or ICC operating
authorities),  state operating licenses or registrations and other interstate or
intrastate  regulatory  licenses  and  other  authorizations,  and has  made all
notifications,  registrations,  certifications and filings with all Governmental
Authorities,  necessary  or  advisable  for the  operation  of the  business  as
currently conducted by the Company,  except for those which,  individually or in
the aggregate  could not reasonably be expected to result in a Material  Adverse
Effect.  There is no action, case or proceeding pending or, to the Shareholders'
or the  Company's  knowledge,  threatened  by any  Governmental  Authority  with
respect  to  (i)  any  alleged  violation  by the  Company  of  any  law,  rule,
regulation,  code,  ordinance,  order,  policy or guideline of any  Governmental
Authority,  or (ii) any  alleged  failure  by the  Company  to have any  permit,
license,  approval,  certification or other authorization required in connection
with the operation of the business.  No notice of any violation of such laws has
been  received by the Company or the  Shareholders.  Schedule  6.10 sets forth a
true and complete list of all of the  Company's  permits,  licenses,  approvals,
certificates,  registrations and other  authorizations  relating to the business
(the  "Authorizations").  Such  Authorizations  are in full force and effect and
neither the Company  nor the  Shareholders  have  received  notification  of the
suspension or cancellation of, or the intent to cancel,  terminate or not renew,
any thereof.

         Section  6.11......Litigation.  Except as set forth in  Schedule  6.11,
there are no lawsuits, actions, proceedings, claims, orders or investigations by
or before any Governmental Authority pending or, to the knowledge of the Company
or the Shareholders,  threatened against the Company or its Affiliates  relating
to such  Company,  its business or any product or service which has been sold by
such Company or seeking to enjoin the transactions contemplated hereby.

         Section 6.12......Undisclosed  Liabilities.  Other than those reflected
in the Financial  Statements or Schedule  6.12 to this  Agreement,  there are no
liabilities  of the Company of any kind or nature  whatsoever,  whether known or
unknown, absolute, accrued, contingent or otherwise, or whether due or to become
due,  other than  liabilities  incurred in the  ordinary  course of business and
consistent with past practices since the date of the Financial  Statements,  and
there exists no facts or circumstances  (other than general economic conditions)
that could reasonably be expected to result in any such liability.

         Section 6.13......Taxes.  All federal, state, county, local and foreign
tax returns  and reports of the Company  required to be filed have been duly and
timely  filed.  There are no  examinations  in  progress  or claims  against the
Company for  federal,  state,  local and other taxes  (including  penalties  and
interest)  for any  period or  periods  and no  notice  of any claim for  taxes,
whether  pending or threatened has been received.  All federal,  state,  county,
local,  foreign  and any other taxes  (including  all  income,  withholding  and
employment  taxes),  assessments  (including  interest  and  penalties),   fees,
interest,   penalties  and  other  governmental  charges  with  respect  to  the
employees, properties, assets, income or franchises of the Company which are due
and payable have been paid or duly provided for, or are being  contested in good
faith by  appropriate  proceedings  as disclosed  on Schedule  6.13 and adequate
reserves  therefor have been established  pursuant to GAAP, or have arisen after
the date hereof in the ordinary  course of  business.  There are no tax liens on
any of the  assets of the  Company,  except  for liens for taxes not yet due and
payable.

         Section 6.14. Insurance.  Schedule 6.14 lists all insurance policies in
effect  with  respect to the Company or its  business  during the past three (3)
years,  showing,  as to each  policy or  binder,  the  carrier,  policy  number,
coverage limits,  expiration  dates,  annual premiums,  deductibles or retention
levels  and a  general  description  of the  type  of  coverage  provided.  Such
insurance  policies are  currently in full force and have remained in full force
and effect through the Closing.

         Section 6.15.  Environmental  Matters.  Except as set forth on Schedule
6.15,  (i)the  business  of the  Company  is  being  and has been  conducted  in
compliance with all Environmental  Laws, (ii) the business has, and at all times
has had, all permits,  licenses and other approvals and authorizations  required
under  applicable  Environmental  Laws for the operation of the business,  (iii)
neither the  Company  nor the  Shareholders  have  received  any notice from any
Governmental  Authority that the Company may be a potentially  responsible party
in  connection  with any waste  disposal  site or  facility  used,  directly  or
indirectly,  by or otherwise related to the business,  (iv) no reports have been
filed,  or have been required to be filed,  by the Company or the  Shareholders,
concerning  the  release of any  Regulated  Substance  or the  violation  of any
Environmental Law, on or at the properties used in the business;  (v) there have
been no environmental investigations,  studies, audits, tests, reviews, or other
analyses  conducted by or which are in the possession of the Company relating to
the  business,  true and  complete  copies of which have not been  delivered  to
National and CDL prior to the date hereof,  (vi) no Regulated Substance has been
disposed of,  transferred,  released,  discharged or  transported  by or for the
Company from the  Company's  business  premises,  other than as permitted  under
applicable  Environmental  Law pursuant to appropriate  regulations,  permits or
authorizations,  and  (vii)  there  are no  civil,  criminal  or  administrative
actions, suits, demands, claims,  hearings,  investigations or other proceedings
pending or, to the Company's  knowledge,  threatened against the business or the
Company with respect to its business or assets  relating to any  violations,  or
alleged  violations,  of any Environmental  Law, and neither the Company nor the
Shareholders  have  received  any  notices,   demand  letters  or  requests  for
information, arising out of, in connection with, or resulting from, a violation,
or alleged violation,  of any Environmental Law, and neither the Company nor the
Shareholders  have been  notified  by any  Governmental  Authority  or any other
Person that the Company's  business or assets have,  or may have,  any liability
pursuant to any Environmental Law.

         Section 6.16......Employee Matters.

         (a) Schedule  6.16  contains a true and complete  list of the employees
currently employed by the Company,  indicating the title of and a description of
any agreements  concerning  such employees and a listing of the rate or range of
rates of all current compensation payable by the Company to each employee.

         (b)  Except as set forth on  Schedule  6.16,  (i) the  Company  has not
entered into any collective bargaining agreements regarding its employees,  (ii)
there are no written personnel policies applicable to such employees  generally,
other than employee  manuals,  true and complete copies of which have previously
been  provided to National  and CDL,  (iii) there is no labor  strike,  dispute,
slowdown or work  stoppage or lockout  pending or, to the best  knowledge of the
Company,  threatened  against or affecting the Company and during the past three
years there has been no such action,  (iv) to the best knowledge of the Company,
no  union  organization  campaign  is in  progress  with  respect  to any of the
employees,  and no question  concerning  representation  exists  respecting such
employees,  (v) there is no unfair labor practice,  charge or complaint  pending
or, to the best knowledge of the Company,  threatened  against the Company,  and
(vi)  the  Company  has  not  entered  into  any   agreement,   arrangement   or
understanding  restricting its ability to terminate the employment of any or all
of its employees at any time,  for any lawful or no reason,  without  penalty or
liability.

         Section  6.17......Employee  Benefit  Plans.  Schedule  6.17  lists all
bonus,  deferred  compensation,  pension,  retirement,  profit-sharing,  thrift,
savings, employee stock ownership, stock bonus, stock purchase, restricted stock
and stock  option  plans,  all  employment  or severance  contracts,  health and
medical  insurance plans, life insurance and disability  insurance plans,  other
material employee benefit plans, contracts or arrangements which cover employees
or former  employees  of the Company  including,  but not limited to,  "employee
benefit  plans"  within  the  meaning of  Section  3(3) of ERISA (the  "Employee
Benefit Plans").  The Employee Benefit Plans which are described in Section 3(3)
of ERISA (the "ERISA Plans") are in compliance in all material respects with the
applicable  provisions of ERISA and, if intended to be tax  qualified,  Sections
401(a) and 501(a) of the Code.  All ERISA  Plans  which are  intended to qualify
under  Section  401(a) of the Code have been  submitted  to and  approved  under
Section 401(a) of the Code by the Internal  Revenue  Service or,  alternatively,
the  applicable  remedial  amendment  period with respect to any such ERISA Plan
will not have ended prior to the Closing Date. No liability  under Subtitle C or
D of Title IV of ERISA has been or is  expected to be incurred by the Company or
any of  its  Affiliates  with  respect  to any  ongoing,  frozen  or  terminated
"single-employer  plan,"  within the  meaning of Section  4001(a)(15)  of ERISA,
currently or formerly maintained by any of them, or the single-employer  plan of
any entity which is considered  one employer with the Company under Section 4001
of ERISA or Section 414 of the Code (an "ERISA Affiliate").  Except as set forth
on Schedule 6.17, neither the Company nor any of its Affiliates have incurred or
expect to incur any withdrawal  liability with respect to a multi-employer  plan
under  Subtitle  E of  Title  IV  of  ERISA  (regardless  of  whether  based  on
contributions of an ERISA Affiliate).

         Section 6.18.  Proprietary Rights. (a) All of the Company's Proprietary
Rights are listed in Schedule  6.18.  Except as disclosed in Schedule  6.18, the
Company owns and  possesses  all right,  title and  interest in the  Proprietary
Rights.  The  transactions  contemplated by this Agreement will have no material
adverse  effect on the Company's  right,  title and interest in the  Proprietary
Rights.

         (b)  No  claim   by  any   third   party   contesting   the   validity,
enforceability,  use or ownership of any  Proprietary  Rights has been made,  is
currently  pending  or, to the  Company's  or the  Shareholders'  knowledge,  is
threatened.  The Company has not  received any notice of, nor is it aware of any
fact which indicates a likelihood of, any infringement or  misappropriation  by,
or conflict with, any third party with respect to any of the Proprietary Rights.
The Company has not infringed,  misappropriated or otherwise conflicted with any
rights  of  any   third   parties,   nor  is  it  aware  of  any   infringement,
misappropriation  or  conflict  which  will  occur as a result of the  continued
operation of the Company's business as now conducted.

         Section 6.19......Accounts Receivable.  Schedule 6.19 sets forth a true
and  complete  listing of all  accounts  and notes  receivable  and all reserves
related thereto,  deposits,  advances and manufacturer and supplier rebates (the
"Accounts  Receivable") and an aging schedule reflecting the aggregate amount of
all Accounts Receivable  outstanding (i) 30 days or less, (ii) more than 30 days
but less  than or equal to 60 days,  (iii)  more  than 60 days but less  than or
equal to 90 days,  and (iv) more than 90 days.  All of the  Accounts  Receivable
have arisen in the ordinary and regular course of business,  represent bona fide
transactions  with third  parties  and are not subject to any  counterclaims  or
offsets (except for those for which adequate  reserves have been  established in
accordance with GAAP) and have been billed and, to the Company's knowledge,  are
collectible in the ordinary course.

         Section 6.20......Contracts.

         (a)  Schedule  6.20  describes  all  contracts  (except  for  usual and
ordinary purchase orders executed in the normal course of business), agreements,
leases, commitments, instruments, plans, permits or licenses, whether written or
oral,  to which  the  Company  is a party  or is  otherwise  bound,  of the type
described below (the "Contracts"):

                  (i)      all  agreements  with or  commitments  to  customers
         for the  sale  by the  Company  of products or services;

                  (ii) all  agreements  or  commitments  for the purchase by the
         Company of services, raw materials,  products, machinery,  equipment or
         other  personal  property  other than those that are for amounts not to
         exceed $20,000;

                  (iii)    all capitalized leases, pledges, conditional sale or
         title retention agreements;

                  (iv) all employment agreements and commitments, all consulting
         or severance  agreements or arrangements and all agreements between the
         Company and the Shareholders,  any Affiliate of the Shareholders or any
         other  officer,  director  or  employee  of  the  Company  (other  than
         employee-at-will relationships);

                  (v) all  agreements  relating to the  consignment  or lease of
         personal property (whether the Company is lessee, sublessee,  lessor or
         sublessor), other than such agreements that provide for annual payments
         of less than $20,000;

                  (vi)     all license, royalty or other agreements relating to
         the Proprietary Rights;

                  (vii)    all agreements  prohibiting the Company from freely
         engaging in the business  presently conducted by the Company in any
         geographic area;

                  (viii)   all  agreements  to  provide  rebates to  customers
         of the  Company,  to the extent not reflected as a liability on the
         Financial Statements; and

                  (ix) any  agreement  other than those  covered by clauses  (i)
         through (viii) above involving  payment or receipt of more than $40,000
         in the aggregate.

                  (b) To the knowledge of the Company, none of the other parties
to any such  Contracts  intends to  terminate or  materially  alter the material
provisions  of such  material  Contracts  either  as a  result  of  transactions
contemplated hereby or otherwise, except as disclosed in Schedule 6.20.

                  (c) Except as disclosed in Schedule  6.20,  the Company is not
in, nor has given or received  notice of, any default or claimed,  purported  or
alleged  default,  or facts that,  with notice or lapse of time, or both,  would
constitute  a default (or give rise to a  termination  right) on the part of any
party in the  performance  of any  obligation  to be performed  under any of the
Contracts,  other than those which will not result in a Material  Adverse Effect
on the Company.

                  (d)  True  and  complete  copies  of  all  written  Contracts,
including any  amendments  thereto,  have been  delivered to National or CDL and
such documents constitute the legal, valid and binding obligation of the Company
and,  to the  best  knowledge  of the  Company,  each  other  party  purportedly
obligated thereunder.

         Section 6.21......Customers and Suppliers.

                  (a)  Schedule  6.21.  sets  forth  a  list  of  all  customers
(including  names,  addresses,  contact  persons,  and  telephone  and facsimile
numbers) with whom the Company (i) currently  does  business,  (ii) is currently
actively  pursuing as a  prospective  customer,  or (iii) has done business with
since January 1, 1996.

                  (b) Except to the extent set forth in  Schedule  6.21,  no one
customer or group of related  customers of the Company  account for more than 5%
of all of the revenues, in the aggregate,  of the Company.  Except to the extent
set forth on  Schedule  6.21,  (i) none of the  customers  of the  Company  with
revenues  greater than 5% of the total  revenues have canceled or  substantially
reduced or, to the  knowledge of the  Shareholders  or the Company are currently
attempting or threatening to cancel or substantially reduce service and (ii) the
Company has complied with all material commitments and obligations pertaining to
them and is not in default under any such contracts and agreements and no notice
of default has been received. Schedule 6.21 lists the ten (10) largest customers
(in terms of sales) of the Company, in the aggregate,  for the fiscal year ended
December 31, 1997 and the first eight  months of 1998 and the revenues  received
from each such customer during fiscal 1997 and the first eight months of 1998.

                  (c)......Schedule  6.21  sets  forth a list  of the  ten  (10)
largest suppliers of the Company, in the aggregate, in terms of purchases during
the year ended  December 31, 1997 and the first eight months of 1998.  Except as
set forth on Schedule 6.21, no supplier  listed on Schedule 6.21 has notified or
otherwise  indicated to the Company that it will stop,  or decrease the rate of,
or,  other  than  publicly  announced  generally   applicable  price  increases,
materially  increase the cost of, its supply of materials,  products or services
used by the Company,  and no supplier  listed on Schedule  6.21 has,  during the
current  fiscal year,  ceased,  materially  decreased  the rate of or materially
raised the cost of, any such materials, products or services.

         Section  6.22.  Predecessor  Status.  Set forth in  Schedule  6.22 is a
listing of all names of all predecessor companies of the Company,  including the
names  of any  entities  from  whom  within  the last  five  years  the  Company
previously acquired  significant assets. The Company has never been a subsidiary
or division of another  corporation or a part of any acquisition which was later
rescinded. Set forth on Schedule 6.22 is a listing of each business name used by
the Company and its predecessors and by any companies acquired by or merged into
it, and each state and  county in which any such  trade name is  registered,  if
any.

         Section  6.23......Books and Records.  The stock records of the Company
accurately  reflect the record ownership of all of the outstanding shares of its
capital stock. The other books and records of the Company,  including  financial
records and books of account, are complete and accurate and have been maintained
in accordance with GAAP, to the extent applicable, and sound business practices.
The minute books of the Company  contain  complete  and accurate  records of all
meetings of, or actions taken without a meeting by, the shareholders,  the Board
of Directors or any committee of the Company. No meetings of the shareholders or
of the Board of Directors of the Company or any of its committees have been held
for which  minutes have not been  prepared  and are not  contained in its minute
books and no action taken by it without a meeting is not accurately  recorded in
its minute books.

         Section  6.24......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the  Company  in  connection  with  this  Agreement  or any of the  transactions
contemplated  hereby.  The  Company  has not  employed  any  broker  or agent in
connection with the transactions contemplated by this Agreement.

         Section 6.25......Full  Disclosure.  No representation or warranty made
by the Shareholders or the Company in this Agreement,  any Schedule, any Exhibit
or any  certificate  delivered  by or on behalf of the Company  pursuant  hereto
contains or will  contain any untrue  statement  of a material  fact or omits or
will omit to state a material fact  necessary to make the  statements  contained
herein or therein not misleading.

                                   ARTICLE VII

            Representations and Warranties Regarding the Shareholders

         Each  Shareholder  represents  and warrants to National  and CDL,  with
respect to himself only, as follows:

         Section  7.1.......Authorization.  The  Shareholder has the capacity to
execute and deliver this Agreement and to perform his obligations hereunder. The
Shareholder is not under any impairment or other  disability,  legal,  physical,
mental or  otherwise,  that would  preclude  or limit his ability to perform his
obligations hereunder. This Agreement constitutes a binding and valid obligation
of the Shareholder, enforceable against him in accordance with its terms.

         Section 7.2.......Non-contravention. Neither the execution and delivery
of  this  Agreement  nor  the  performance  by the  Shareholder  of  obligations
hereunder  will (i) violate or result in a breach  (with or without the lapse of
time,  the giving of notice or both) of or  constitute  a default  under (A) any
contract,  agreement,  commitment,  indenture,  mortgage,  lease,  pledge, note,
license,  permit or other  instrument or obligation or (B) any judgment,  order,
decree,  law,  rule or  regulation  or  other  restriction  of any  Governmental
Authority,  in each case to which any of the  Shareholder is a party or by which
the  Shareholder  is bound or to which any of his  assets or  properties  or the
assets or properties of the Company are subject,  (ii) result in the creation or
imposition  of  any  Encumbrances  on any of the  assets  or  properties  of the
Shareholder or the Company,  or (iii) result in the  acceleration  of, or permit
any  Person  to  accelerate  or  declare  due and  payable  prior to its  stated
maturity, any obligation of the Shareholder.

         Section   7.3.......No   Consents.   No  notice  to,  filing  with,  or
authorization,  registration,  consent or approval of any Governmental Authority
or other Person is necessary for the execution,  delivery or performance of this
Agreement or the  consummation of the  transactions  contemplated  hereby by the
Shareholder.

         Section  7.4.......Ownership  of the Company's  Stock.  The Shareholder
owns all of the Company's Stock held by him beneficially and of record, free and
clear of any Encumbrances.  Exhibit A sets forth the individual ownership of the
Company's Stock by the Shareholder next to his name.

         Section  7.5.......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
the  Shareholder in connection  with this  Agreement or any of the  transactions
contemplated  hereby.  The  Shareholder  has not employed any broker or agent in
connection with the transactions contemplated by this Agreement.

         Section 7.6.      Affiliates.  The  Shareholder  has no interest in,
nor  affiliation  with, any entity or person in the air or ground  messenger or
delivery  business or any related  business  except for the Company or as set
forth in Schedule 7.6.

         Section 7.7.......Full  Disclosure.  No representation or warranty made
by the  Shareholders  in  this  Agreement,  any  Schedule,  any  Exhibit  or any
certificate delivered,  or to be delivered,  by or on behalf of the Shareholders
pursuant hereto contains or will contain any untrue statement of a material fact
or omits or will omit to state a material fact  necessary to make the statements
contained herein or therein not misleading.

                                  ARTICLE VIII

             Representations and Warranties Regarding National and CDL

         National and CDL,  jointly and severally,  represent and warrant to the
Shareholders and the Company as follows:

         Section 8.1. Organization.  National and CDL are each corporations duly
organized, validly existing and in good standing under the laws of the States of
Missouri and Delaware, respectively and have full power and authority, corporate
and other,  to own their  respective  property  and assets and to carry on their
respective  businesses as presently  conducted except where the failure to be so
qualified  would  not  have  a  material  adverse  effect  on  their  respective
businesses.

         Section  8.2.  Authorization.  National  and CDL have  full  power  and
authority,  corporate  and other,  to execute and deliver this  Agreement and to
perform  their  respective  obligations  hereunder,  all of which have been duly
authorized by all requisite  corporate action.  This Agreement,  has been or, at
the time of  delivery  will be,  duly  authorized,  executed  and  delivered  by
National and CDL and constitute or, at the time of delivery will  constitute,  a
valid and binding  agreement of National and CDL,  enforceable  against National
and CDL in accordance with its terms.

         Section  8.3.......Non-contravention.   Neither  National  nor  CDL  is
subject to any  provision of its  respective  Certificate  of  Incorporation  or
by-laws or any agreement,  instrument,  law, rule, regulation,  order, decree or
judgment of any Governmental  Authority or other  restriction that would prevent
the consummation of the transactions contemplated by this Agreement.

         Section   8.4.......No   Consents.   No  notice  to,  filing  with,  or
authorization,  registration,  consent or approval of any Governmental Authority
or other Person is necessary for the execution,  delivery or performance of this
Agreement  or  the  consummation  of the  transactions  contemplated  hereby  by
National and CDL.

         Section  8.5.......Brokers.  No  Person  is or  will be  entitled  to a
broker's, finder's, investment banker's, financial adviser's or similar fee from
either  National  or  CDL  in  connection  with  this  Agreement  or  any of the
transactions contemplated hereby.

         Section  8.6.......SEC  Documents.  The SEC  Documents  adequately  and
correctly  describe the business of CDL as at their  respective  dates.  The SEC
Documents  do not contain any untrue  statement  of a material  fact nor omit to
state a material fact  necessary to make the  statements  contained  therein not
misleading.

         Section  8.7.......CDL Stock. The CDL Stock to be issued hereunder will
be  duly  authorized,   validly  issued,   fully  paid  and  nonassessable.   No
Encumbrances  or  restrictions  exist on the CDL Stock,  except  restrictions on
transfer pursuant to state and federal securities laws.

                                   ARTICLE IX

                            Covenants and Agreements

         Section 9.1.......Access and Information.  No investigation by National
and CDL  heretofore  or  hereafter  made shall  modify or  otherwise  affect any
representations  and warranties of the Company or the Shareholders,  which shall
survive any such investigation,  or the conditions to the respective obligations
of National and CDL to consummate the transactions contemplated hereby.

         Section  9.2.......Closing  Documents. The Company and the Shareholders
shall,  prior to or on the Closing  Date,  execute and  deliver,  or cause to be
executed  and  delivered  to National  and CDL,  the  documents  or  instruments
described in Section  10.2.  National and CDL shall,  prior to or on the Closing
Date,  execute  and  deliver,  or cause to be  executed  and  delivered,  to the
Shareholders, the documents or instruments described in Section 10.3.

         Section  9.3.......Taxes.  The  following  provisions  shall govern the
allocation of responsibility as between CDL and National on the one hand and the
Company on the other hand for certain tax matters following the Closing Date:

         (a) Tax Periods Ending on or Before the Closing Date. CDL shall prepare
or cause to be  prepared  and file or cause to be filed all tax  returns for the
Company  for all periods  ending on or prior to the Closing  Date which have not
been filed and which were not  required to be filed  prior to the Closing  Date.
CDL shall permit the  Shareholders to review and comment on each such tax return
described in the preceding  sentence  prior to filing.  The  Shareholders  shall
reimburse  CDL for taxes,  interest and penalties of the Company with respect to
such  periods  within  fifteen  (15)  days  after  payment  by CDL or any of its
affiliates  of such taxes to the  extent  such  taxes are not  reflected  in the
reserve for taxes shown on the face of the  Balance  Sheet for the period  ended
the Closing Date.

         (b) Tax Periods Beginning Before and Ending After the Closing Date. CDL
shall prepare or cause to be prepared, pay and file or cause to be filed any tax
returns of the Company for tax periods  which begin  before the Closing Date and
end after the Closing Date. The shareholders of the individual Company owing the
taxes  shall pay to CDL within  fifteen  (15) days after the date on which taxes
are paid with  respect to such  periods an amount  equal to the  portion of such
taxes,  interest  and  penalties  which  relates to the portion of such  taxable
period  ending on the closing date to the extent such taxes are not reflected in
the reserves for taxes,  interest and penalties  shown on Schedule 9.3(b) and as
reflected  on the face of the  Balance  Sheet for the period  ended the  Closing
Date.

         (c)  Cooperation  on Tax Matters.  CDL,  National and the  Shareholders
shall cooperate  fully, as and to the extent  reasonably  requested by the other
party, in connection with the filing of tax returns pursuant to this Section and
any  audit,   litigation  or  other  proceeding  with  respect  to  taxes.  Such
cooperation shall include the retention and (upon the other party's request) the
provision of records and information  which are reasonably  relevant to any such
audit,  litigation  or other  proceeding  and making  employees  available  on a
mutually  convenient basis to provide additional  information and explanation of
any material provided hereunder.  If the Shareholders wish to contest any audit,
litigation  inquiry or other  proceeding with respect to taxes for periods prior
to the  Closing  Date for which they are  liable,  they may do so with  counsel.
accountants  and/or other  professionals of their choosing,  so long as prior to
assuming such role,  they deposit with CDL and National an amount of funds to be
held in escrow by CDL which will cover and  indemnify  and hold harmless CDL for
all taxes, interest and penalties which may be imposed upon CDL, National or the
Companies  by reason of such  proceeding  and all amounts  needed to provide for
defense costs in such proceeding.

         (d) Tax  Sharing  Agreements.  All tax  sharing  agreements  or similar
agreements  with respect to or involving  the Company  shall be terminated as of
the Closing Date and,  after the Closing  Date,  the Company  shall not be bound
thereby or have any liability thereunder.

         (e) Certain  Taxes.  All  transfer,  documentary,  sales,  use,  stamp,
registration  and  other  such  taxes  and fees  (including  any  penalties  and
interest)  incurred  in  connection  with  this  Agreement  shall be paid by the
Shareholders when due, and the Shareholders will, at their own expense, file all
necessary tax returns and other documentation with respect to all such transfer,
documentary,  sales, use, stamp,  registration and other taxes and fees, and, if
required by applicable  law, CDL will, and will cause its affiliates to, join in
the execution of any such tax returns and other documentation.

                  Section 9.4.  Non-Competition and  Confidentiality  Agreement.
For a period of five (5) years after the Closing Date, or, as to any Shareholder
who becomes an employee of  National or CDL,  during such  employment  and for a
period  of two  (2)  years  following  termination  of such  relationship  as an
employee  (whichever  period is longer),  the Shareholders  will not directly or
indirectly:

                                    (i) engage in the small  package  delivery
                  business or the provision of ground or air  transportation
                  services in or within 250 miles of any of Kansas City, Kansas,
                  St. Louis, Missouri, or Indianapolis, Indiana (the
                  "Territory");

                                    (ii)  call upon any  person  who is, at that
                  time,   an  employee  of  National  or  CDL   (including   the
                  subsidiaries  of  either  thereof)  in a  managerial  or sales
                  capacity  for the purpose or with the intent of enticing  such
                  employee away from or out of the employ of National or CDL;

                                    (iii)  call upon any  person  or entity  (x)
                  which is, at that time, or which has been, within one (1) year
                  prior to that time,  a customer of National or CDL  (including
                  the  subsidiaries  of  either  thereof)  or  (y)  which  was a
                  customer of the Company in the 18 month period  preceding  the
                  Closing,  for the purpose of soliciting or selling products or
                  services in direct  competition  with National or CDL anywhere
                  in the United States; or

                                    (iv) use for his own  benefit  or divulge or
                  convey to any third party,  any  Confidential  Information (as
                  hereinafter  defined) relating to the Company or its business.
                  For  purposes  of  this  Agreement,  Confidential  Information
                  consists of all information, knowledge or data relating to the
                  Company  or  its  business   including,   without  limitation,
                  customer  and  supplier  lists,   formulae,   trade  know-how,
                  processes, secrets, consultant contracts, pricing information,
                  marketing   plans,   product   development   plans,   business
                  acquisition  plans and all other  information  relating to the
                  operation  of the  Company or its  business  not in the public
                  domain or  otherwise  publicly  available.  Information  which
                  enters the public  domain or is publicly  available  loses its
                  confidential  status  hereunder so long as the Shareholders do
                  not directly or indirectly cause such information to enter the
                  public domain.

                  Notwithstanding the above, the foregoing covenant shall not be
deemed to prohibit the Shareholders from acquiring,  as an investment,  not more
than one percent (1%) of the capital stock of a competing  business  whose stock
is traded on a national securities exchange or over-the-counter.

                  The Shareholders  acknowledge that the restrictions  contained
in this  Section 9.4 are  reasonable  and  necessary  to protect the  legitimate
interests  of National  and CDL and that any breach by the  Shareholders  of any
provision  hereof will result in  irreparable  injury to National  and CDL.  The
Shareholders  acknowledge  that,  in addition to all remedies  available at law,
National and CDL shall be entitled to  equitable  relief,  including  injunctive
relief, and an equitable  accounting of all earnings,  profits or other benefits
arising  from such breach and shall be entitled to receive  such other  damages,
direct or consequential,  as may be appropriate.  Neither National nor CDL shall
be required to post any bond or other security in connection with any proceeding
to enforce this Section 9.4.

                  It is specifically agreed that the five (5) year period stated
at the beginning of this Section 9.4,  during which the agreements and covenants
of the Shareholders shall be effective, shall be computed by excluding from such
period any time during which the  Shareholders are in violation of any provision
of this Section 9.4. It is also agreed that the  restrictions  contained in this
Section 9.4 and in the Employment  Agreements  shall terminate in the event that
CDL, after all allowable grace periods, fails to make any payment when due under
the Notes; provided,  however, that such restrictions shall not terminate if the
nonpayment  is due to an exercise  of the right of set-off  under  Section  11.5
hereof.

                  All of the covenants in this Section 9.4 shall be construed as
an  agreement  independent  of any other  provision in this  Agreement,  and the
existence  of any claim of the  Shareholders  against  National or CDL shall not
constitute a defense to the enforcement of such covenants.

                  The foregoing notwithstanding, the covenants set forth in this
Section 9.4 (and the similar  confidentiality  and noncompetition  provisions in
any  Shareholder's  employment  agreement)  shall terminate and be of no further
effect if CDL fails to make any  payment to the  Shareholders  under the Note or
the Earn-Out  Payment  after all allowable  grace periods and  resolution of all
disputes relating thereto.

         Section 9.5.......Audited  Financial  Statements  of the  Company.  All
fees  and  expenses  incurred  in connection  with any audits of the  financial
statements of the Company  shall be the sole  responsibility  of the
Shareholders.

         Section  9.6.......Best  Efforts;  Further  Assurances.  Subject to the
terms and conditions  herein provided,  each of the parties hereto shall use its
best efforts to take, or cause to be taken,  all action,  and to do, or cause to
be done, all things reasonably  necessary,  proper or advisable under applicable
laws  and  regulations  to  consummate  and  make  effective  the   transactions
contemplated by this Agreement. Each of the Company, the Shareholders,  National
and CDL will use  their  respective  best  efforts  to  obtain  consents  of all
Governmental  Authorities and third parties necessary to the consummation of the
transactions  contemplated by this Agreement.  The Company and the  Shareholders
shall use their respective reasonable best efforts to assist National and CDL in
connection  with  the  fulfillment  of any SEC  disclosure,  reporting  or other
governmental  compliance  obligation  of  National  and CDL,  including  without
limitation  providing  National and CDL with any financial and other information
requested by National  and CDL. In the event that at any time after  Closing any
further  action is necessary to carry out the  purposes of this  Agreement,  the
Company and the Shareholders  shall take all such reasonable  action without any
further consideration therefor.

         Section 9.7.      Compliance with the Securities Act.

         (a) The Shareholders  acknowledge that the CDL Stock to be delivered to
the  Shareholders  pursuant to this Agreement  (including upon conversion of any
part of the  Notes)  (the  "Restricted  Stock")  has not  been  and  will not be
registered  under the  Securities  Act and therefore  may not be resold  without
compliance  with the Securities  Act. The Restricted  Stock is being acquired by
the Shareholders  solely for their own accounts,  for investment  purposes only,
and with no present intention of distributing, selling or otherwise disposing of
it in  connection  with  the  distribution  of  such  shares.  The  Shareholders
covenant,  warrant and represent that the Restricted  Stock will not be offered,
sold,  assigned,  pledged,  hypothecated,  transferred or otherwise  disposed of
except  after  full  compliance  with all of the  applicable  provisions  of the
Securities  Act and the  rules  and  regulations  of the SEC.  The  certificates
representing the Restricted Stock shall bear the following legend:

                  The  securities  represented  hereby  were  not  issued  in  a
                  transaction  registered  under the  Securities Act of 1933, as
                  amended ("Securities Act"), or any applicable state securities
                  laws and may not be sold, pledged,  hypothecated, or otherwise
                  transferred  unless  such sale or  transfer  is  covered by an
                  effective  registration statement under the Securities Act and
                  applicable state securities laws or, in the opinion of counsel
                  for the holder and the issuer, is exempt from the registration
                  requirements of the Securities Act and such laws.

The  foregoing  legend  notwithstanding,  CDL will not  require  any  opinion of
counsel if the Restricted  Stock may be transferred  pursuant to Rule 144 of the
Act.

         (b) Each  Shareholder  represents  that he is able to bear the economic
risk of an investment  in the  Restricted  Stock,  can afford to sustain a total
loss of such  investment  and has such knowledge and experience in financial and
business matters including  investments in unregistered  securities,  that he is
capable of evaluating the merits and risks of the proposed investment and/or has
employed a purchaser  representative who is qualified by training and experience
in  business  and  financial  matters  to  evaluate  the  merits and risks of an
investment in CDL and therefore has the capacity to protect his own interests in
connection with his acquisition of the Restricted Stock.

         (c)  Each  Shareholder   represents  that  he,  or  such  Shareholder's
purchaser  representative,  has  read  and  reviewed  the  information  provided
pursuant to this Agreement and the other documentation and information furnished
by National or CDL  (including  CDL's Form 10-K for the year ended  December 31,
1997,  its Forms 10-Q for the quarters ended March 31, June 30 and September 30,
1998, its Forms 8-K filed July 16, August 5, 18 and 19,  September 15 and 28 and
October  19,  1998,  its  Registration  Statement  on Form  S-4,  and its  proxy
statement  for its annual  meeting held on June 17, 1998 (the "SEC  Documents"))
and has had an adequate  opportunity  to ask questions and receive  answers from
the officers of CDL concerning,  among other matters,  CDL, its management,  and
its plans for the operation of its  business.  National and CDL have provided to
the  Shareholders  an opportunity to ask questions and receive  answers from the
officers of CDL and to obtain any and all additional  information  necessary for
them to verify the  accuracy of the  information  provided  herein or  delivered
pursuant hereto.

         (d) Until all of the shares of CDL Stock issued  hereunder  are sold or
eligible  for sale  pursuant to Rule  144(k) of the  Securities  Act,  CDL shall
remain current in filing all reports with the SEC necessary to allow transfer of
the  shares  of CDL  Stock  pursuant  to  Rule  144 if  otherwise  eligible  for
unrestricted sale under Rule 144.

                  Section  9.8.  Covenants  of  CDL  and  National.  During  the
Measurement Period,  without the prior consent of Bozzay, CDL and National agree
to:

                  (a) Continue to elect Bozzay to the Board of Directors of
National: and
                  (b) Keep the Division maintained as a separate profit center
wholly-owned by CDL.

                  Section 9.9. Personal Guarantees.  Attached hereto as Schedule
9.9 is a list of all debt of the Company which is  personally  guaranteed by the
Shareholders.  CDL will use  reasonable  efforts after the Closing Date to cause
each  beneficiary  of a guarantee  listed on  Schedule  9.9 to accept a National
guarantee in place of the Shareholder guarantee it currently holds.

                                    ARTICLE X

                               Closing Deliveries

         Section 10.1.  Mutual  Conditions.  The respective  obligations of each
party to consummate the  transactions  contemplated  by this Agreement  shall be
subject to the  fulfillment  at or prior to Closing of the condition that (A) no
Governmental Authority of competent jurisdiction shall have (i) enacted, issued,
promulgated,  enforced  or entered  any  statute,  rule,  regulation,  judgment,
decree,  injunction  or other order  which is in effect;  or (ii)  commenced  or
threatened  any  action or  proceeding,  which in  either  case  would  prohibit
consummation of the  transactions  contemplated  by this  Agreement,  and (B) no
action or  proceeding  before a court or any other  governmental  agency or body
shall  have  been   instituted   or  threatened  to  restrain  or  prohibit  the
transactions, contemplated by this Agreement.

         Section  10.2......Deliveries by the Company and the Shareholders.  The
obligations of National and CDL to consummate the  transactions  contemplated by
this  Agreement  shall be subject to the  fulfillment  prior to or at Closing of
each of the following conditions:

         (a) All  representations and warranties made by each of the Company and
the  Shareholders  in this  Agreement  and the  Schedules  hereto shall be true,
correct and  complete  on the date  hereof and as of the Closing  Date as though
such  representations  and warranties  were made as of the Closing Date, and the
Company and the  Shareholders  shall have duly performed or complied with all of
the  covenants,  obligations  and conditions to be performed or complied with by
them under the terms of this Agreement on or prior to or at Closing.

         (b)  There  shall  have been no (i)  Material  Adverse  Change,  or any
development  which  could  reasonably  be  expected  to result in a  prospective
Material Adverse Change, or (ii) material damage, destruction or loss to, or any
other material and adverse change in, the assets or the business of the Company,
regardless of insurance coverage.

         (c) (i) All  authorizations,  consents,  waivers,  approvals  or  other
actions  required in connection with the execution,  delivery and performance of
this Agreement by the Company and the  Shareholders  and the consummation by the
Company and the Shareholders of the transactions  contemplated hereby shall have
been obtained and shall be in full force and effect; (ii) the Company shall have
obtained any  authorizations,  consents,  waivers,  approvals  or other  actions
required  to prevent a  material  breach or  default  by the  Company  under any
contract to which the Company is party or for the  continuation of any agreement
to which  the  Company  is a party;  and  (iii)  all  authorizations,  consents,
waivers,  approvals or other  actions  necessary  to permit  National to own the
Company's Stock shall have been obtained and shall be in full force and effect.

         (d) All  promissory  notes  issued to any of the  Shareholders  (all of
which are listed and described in Schedule 10.2) shall continue to be payable by
National or CDL after the Closing Date over the same  specified  time period and
at the same interest rate without acceleration unless National or CDL chooses to
repay the notes without penalty prior to note maturity.

         (e) The  Shareholders  shall  have  delivered  to CDL the  certificates
representing  the  Company's  Stock  along with the other  items  referred to in
Article III.

         (f) Prior to or at the Closing,  the Shareholders and the Company shall
have  delivered  such other closing  documents as shall be requested by National
and CDL in form and substance reasonably  acceptable to counsel for National and
CDL, including the following:

                  (i) a certificate  of the President or a Vice President of the
         Company  and a similar  certificate  from the  Shareholders,  dated the
         Closing Date, to the effect that (1) the Person or Persons signing such
         certificate  is familiar  with this  Agreement  and (2) the  conditions
         specified in Section  10.2(a),  (b) and (c), with respect to the person
         or Company signing the certificate, have been satisfied;

                  (ii) a certificate of the Secretary or Assistant  Secretary of
         the  Company,  dated the  Closing  Date,  as to the  incumbency  of any
         officer of the Company executing this Agreement or any document related
         thereto  and  covering  such  other  matters  as  National  and CDL may
         reasonably request;

                  (iii) a certified  copy of (1) the  Articles of  Incorporation
         and  by-laws of the  Company and all  amendments  thereto,  and (2) the
         resolutions  of the Board of Directors of the Company  authorizing  the
         execution,   delivery  and  consummation  of  this  Agreement  and  the
         transactions contemplated hereby;

                  (iv) the  Shareholders  and certain  other persons shall enter
         into employment agreements (the "Employment  Agreements") with National
         in the respective  forms attached hereto as Exhibit C and shall release
         CDL , National  and the  Companies  from any  liabilities  arising from
         existing  employment  agreements,  which  shall  be  deemed  terminated
         immediately prior to the Closing Date;

                  (v)      an opinion of Thompson Coburn,  counsel to the
         Company and the  Shareholders,  dated the Closing Date, and
         substantially in the form attached as Exhibit D;

                  (vi) a  Certificate  of Merger  (pre-filed  in Missouri with a
         delayed effective date) with a Plan of Merger for National and RE II as
         provided in Section 1.1; and

                  (vii) such other  documents or instruments as National and CDL
         reasonably requests to effect the transactions contemplated hereby.

         Section  10.3......Deliveries  by CDL and National.  The obligations of
the Shareholders and the Company to consummate the transactions  contemplated by
this Agreement shall be subject to the fulfillment at or prior to the Closing of
each of the following conditions:

         (a) All  representations  and  warranties  made by  National  and  CDL,
respectively,  in this Agreement shall be true, correct and complete on the date
hereof and as of the Closing Date as though such  representations and warranties
were made as of the Closing Date, and National and CDL shall have duly performed
or complied with all of their respective  covenants,  obligations and conditions
to be performed or complied with by them, respectively,  under the terms of this
Agreement on or prior to or at the Closing.

         (b) All  authorizations  or  approvals  or  other  action  required  in
connection  with the  execution,  delivery and  performance of this Agreement by
National  and  CDL and  the  consummation  by  such  party  of the  transactions
contemplated  hereby and thereby  shall have been  obtained and shall be in full
force and effect.

         (c) Prior to or at the Closing,  National and CDL shall have  delivered
to the Shareholders such closing  documents as shall be reasonably  requested by
the  Shareholders  in form and substance  reasonably  acceptable to his counsel,
including the following:

                  (i) a certificate of the President or a Vice President of each
         of National and CDL, dated the Closing Date, to the effect that (1) the
         Person signing such certificate is familiar with this Agreement and (2)
         the  conditions   specified  in  Section  10.3(a)  and  (b)  have  been
         satisfied;

                  (ii) a certificate of the Secretary or Assistant  Secretary of
         each of National and CDL,  dated the Closing Date, as to the incumbency
         of any officer thereof executing this Agreement or any document related
         thereto  and  covering  such  other  matters  as the  Shareholders  may
         reasonably request;

                  (iii) a  certified  copy of the  resolutions  of the  Board of
         Directors of National and CDL, respectively, authorizing the execution,
         delivery  and  consummation  of this  Agreement  and  the  transactions
         contemplated hereby and thereby;

                  (iv)     the shares of CDL Stock,  Notes and cash  payments
         to be  delivered  at the  Closing as provided in Section 2.2 hereof; 
         and

                  (v)      National shall enter into the Employment  Agreements
         with the  Shareholders  and certain other persons.

                                   ARTICLE XI

            Survival of Representations and Warranties; Indemnification

         Section 11.1......Survival of Representations and Warranties. Except as
set  forth  below,  the  representations  and  warranties  provided  for in this
Agreement  shall survive the Closing for two (2) years from the Closing Date for
the  benefit  of the  parties  hereto  and their  successors  and  assigns.  The
representations  and  warranties  provided for in Sections  6.11,  6.13 and 6.15
shall survive the Closing and remain in full force and effect for six (6) years.
The  survival  period of each  representation  or  warranty  as provided in this
Section 11.1 is hereinafter referred to as the "Survival Period."

         Section 11.2......Indemnification.

         (a) Each Shareholder shall indemnify and hold harmless  National,  CDL,
their  respective  Affiliates,   officers,  directors,   employees,  agents  and
representatives,  and any Person claiming by or through any of them, against and
in respect of any and all claims, costs, expenses, damages, liabilities,  losses
or deficiencies (including,  without limitation,  counsel's fees and other costs
and expenses incident to any suit, action or proceeding) (the "Damages") arising
out of,  resulting from or incurred in connection with (i) any inaccuracy in any
representation  or the breach of any warranty  made by such  Shareholder  or the
Company in which such  Shareholder  is a shareholder  in this  Agreement for the
applicable  Survival  Period,  or (ii) the  breach  by such  Shareholder  of any
covenant or  agreement to be  performed  by him  hereunder,  or (iii) any costs,
damages,  fines,  penalties  or  liability  relating to or arising from the tank
removal  disclosed  on  Schedule  6.15 or to the  leakage  or  discharge  of any
materials therefrom.

         (b) National and CDL,  jointly and severally,  shall indemnify and hold
harmless the Shareholders, their Affiliates, agents and representatives, and any
Person claiming by or through any of them, against and in respect of any and all
Damages  arising out of,  resulting from or incurred in connection  with (i) any
inaccuracy in any  representation or the breach of any warranty made by National
or CDL in this Agreement for the applicable  Survival Period, or (ii) the breach
by National or CDL of any covenant or agreement to be performed by it hereunder.

         (c) Any Person providing  indemnification pursuant to the provisions of
this Section 11.2 is hereinafter  referred to as an "Indemnifying Party" and any
Person  entitled to be  indemnified  pursuant to the  provisions of this Section
11.2 is hereinafter referred to as an "Indemnified Party."

         Section 11.3......Procedures for Third Party Claims. In the case of any
claim for indemnification  arising from a claim of a third party (a "Third Party
Claim"),   an  Indemnified  Party  shall  give  prompt  written  notice  to  the
Indemnifying  Party of any  claim or demand  which  such  Indemnified  Party has
knowledge  and  as to  which  it  may  request  indemnification  hereunder.  The
Indemnifying  Party  shall have the right to defend  and to direct  the  defense
against  any  such  Third  Party  Claim,  in  its  name  or in the  name  of the
Indemnified Party, as the case may be, at the expense of the Indemnifying Party,
and with counsel selected by the Indemnifying  Party unless (i) such Third Party
Claim  seeks  an  order,  injunction  or  other  equitable  relief  against  the
Indemnified  Party and it is reasonably  necessary for the Indemnified  Party to
utilize its own counsel  either due to time  demands or the mature of the relief
sought, or (ii) the Indemnified Party shall have reasonably concluded that there
is an  actual  conflict  of  interest  arising  from the  counsel  chosen by the
Indemnified  Party  representing  the  Indemnifying  Party in the conduct of the
defense of such Third Party Claim. Notwithstanding anything in this Agreement to
the contrary,  the Indemnified  Party shall, at the expense of the  Indemnifying
Party,  cooperate with the Indemnifying  Party, and keep the Indemnifying  Party
fully informed,  in the defense of such Third Party Claim. The Indemnified Party
shall have the right to participate in the defense of any Third Party Claim with
counsel employed at its own expense; provided, however, that, in the case of any
Third  Party  Claim  described  in clause  (i) or (ii) of the  second  preceding
sentence or as to which the  Indemnifying  Party shall not in fact have employed
counsel to assume the defense of such Third Party Claim, the reasonable fees and
disbursements of such counsel shall be at the expense of the Indemnifying Party.
The Indemnifying Party shall have no indemnification obligations with respect to
any Third Party Claim which shall be settled by the  Indemnified  Party  without
the prior written consent of the Indemnifying  Party, which consent shall not be
unreasonably withheld or delayed.

         Section  11.4......Procedures for Inter-Party Claims. In the event that
an  Indemnified  Party  determines  that it has a claim for  Damages  against an
Indemnifying  Party  hereunder  (other than as a result of a Third Party Claim),
the  Indemnified   Party  shall  give  prompt  written  notice  thereof  to  the
Indemnifying  Party,  specifying the amount of such claim and any relevant facts
and  circumstances  relating  thereto.  The Indemnified  Party shall provide the
Indemnifying  Party  with  reasonable  access to its books and  records  for the
purpose of allowing the  Indemnifying  Party a reasonable  opportunity to verify
any such claim for Damages.  The Indemnified  Party and the  Indemnifying  Party
shall  negotiate in good faith  regarding the resolution of any disputed  claims
for Damages.  Promptly  following the final  determination  of the amount of any
Damages claimed by the Indemnified  Party, the Indemnifying Party shall pay such
Damages to the  Indemnified  Party by wire transfer or check made payable to the
order of the Indemnified Party, without interest.

         Section  11.5......Right of Set-Off. The Shareholders hereby agree that
National  and CDL shall have the right to set-off,  against any amount which may
be owed by  National  or CDL to the  Shareholders  pursuant  to this  Agreement,
including  but not  limited  to the  Notes  and any earn out  payments,  whether
payable in cash or securities (but excluding  salary due to the  Shareholders as
employees),  whether due or unpaid at the time of such set-off,  any amount owed
to National and CDL by the Shareholders pursuant to this Agreement or otherwise.
The exercise of such right of set-off by National and CDL shall not constitute a
breach by National or CDL of this  Agreement or the  agreement  underlying  such
obligation.  National  and CDL, on the one hand,  and the  Shareholders,  on the
other,  shall  negotiate  in good faith with  respect  to the  propriety  of any
set-off by National or CDL.

         Section 11.6......Offset to Indemnification. All amounts of Damages for
which a party  claims  indemnity  shall  be  offset  by any  insurance  or other
monetary  benefit  received  by the  Indemnified  Party as a result of the event
giving rise to an indemnity  claim,  so that there is no double  recovery by the
Indemnified Party.

         Section 11.7......Limits on Indemnification. The Shareholders shall not
have any  liability  under the  indemnification  provisions  of this  Article 11
unless and until the gross aggregate  amount of claims against the  Shareholders
exceeds  $25,000.  National  and  CDL  shall  not  have  any  liability  to  the
Shareholders under the indemnification  provisions of this Article 11 unless and
until the gross  aggregate  amount of claims  against  National  and CDL exceeds
$25,000.  All amounts of Damages for which a Shareholder may be obligated to pay
to CDL or  National,  whether  pursuant  to a claim  under  this  Article  11 or
otherwise  (except  fraud),  shall not exceed the amount  which the  Shareholder
received as Purchase Price hereunder with respect to the Company as to which the
claim for  indemnification  relates. No party shall be liable to any other under
this  Agreement,  at law or in equity,  (other than an action for  fraud),  with
respect to any matter not  initiated  within the time limits  specified  in this
Article 11 or, if no time period is specified or if the claim is asserted  other
than under this Article 11, within three (3) years of the Closing Date.

         Section  11.8......Form  of Payment.  The  Shareholders may satisfy any
indemnification  obligations by delivery of stock of CDL held by them, valued at
Fair Value or by a reduction of the principal  amount of any Note.  For purposes
of this  Section,  "Fair Value" shall mean the average of the closing  prices of
the common stock of CDL as reported on the NASDAQ National Market System for the
five (5) trading days ending on the second (2nd) trading day prior to receipt of
the shares by CDL.

                                   ARTICLE XII

                                  Miscellaneous

         Section 12.1......Notices. All notices or other communications required
or permitted hereunder shall be in writing and shall be delivered personally, by
facsimile or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally,  or by facsimile,  or if
mailed, five days after the date of mailing, as follows:

If to National or CDL:      380 Allwood Road
                            Clifton, New Jersey 07012
                            Telephone: (973) 471-1005
                            Facsimile: (973) 471-5519
                            Attention:  Mark Carlesimo, Esq., General Counsel

With a copy to:             Lowenstein Sandler PC
                            65 Livingston Avenue
                            Roseland, New Jersey 07068
                            Telephone: (973) 597-2500
                            Facsimile: (973) 597-2400
                            Attention: Alan Wovsaniker, Esq.

If to the Shareholders:     Terry Bozzay
                            13253 Romamy Way Ct.
                            St. Louis, MO  63131

                            Charles Walch
                            312 Planthurst Road
                            St. Louis, MO  63119

                            Randy Cooper
                            540 Coachway
                            Hazelwood, MO  63042

With a copy to:             Thompson Coburn
                            One Mercantile Center
                            St. Louis, Missouri  63101
                            Telephone:   314-552-6000
                            Facsimile:   314-552-7000
                            Attention:  Thomas E. Proost, Esq.

or to such other  address as any party  hereto  shall  notify the other  parties
hereto (as provided above) from time to time.

         Section 12.2. Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated,  except as otherwise provided herein, the
Company and CDL shall each pay its own expenses  incident to this  Agreement and
the  transactions  contemplated  herein.   Notwithstanding  the  foregoing,  the
Shareholders and not the Company shall pay the Company's  expenses to the extent
such expenses are not reflected on the Company's Closing Date balance sheet.

         Section 12.3.  Governing Law; Consent to  Jurisdiction.  This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New Jersey,  without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the non-exclusive jurisdiction
of the courts of the State of New Jersey and the United  States  District  Court
for the  District of New Jersey,  located in Passaic or Essex  County,  State of
Jersey, for the purpose of any suit, action,  proceeding or judgment relating to
or arising  out of this  Agreement  and the  transactions  contemplated  hereby.
Service of process in connection with any such suit, action or proceeding may be
served on each party  hereto  anywhere  in the world by the same  methods as are
specified  for the giving of notices under this  Agreement.  Each of the parties
hereto  irrevocably  consents to the  jurisdiction of any such court in any such
suit,  action or proceeding and to the laying of venue in such court. Each party
hereto irrevocably waives any objection to the laying of venue of any such suit,
action or  proceeding  brought in such courts and  irrevocably  waives any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient forum.

         Section  12.4.  Assignment;  Successors  and  Assigns;  No Third  Party
Rights.  Except as otherwise provided herein, this Agreement may not be assigned
by operation of law or otherwise, and any attempted assignment shall be null and
void.  National and CDL may assign all of their  rights under this  Agreement to
any  Affiliate;  provided  such  Affiliate  assumes  all of the  obligations  of
National and CDL remains  liable  hereunder.  No such  assignment  shall relieve
National or CDL of their obligations hereunder.  This Agreement shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors,  assigns and legal representatives.  This Agreement shall be for the
sole benefit of the parties to this Agreement and their  respective  successors,
assigns and legal  representatives and is not intended,  nor shall be construed,
to give  any  Person,  other  than  the  parties  hereto  and  their  respective
successors,  assigns and legal  representatives,  any legal or equitable  right,
remedy or claim hereunder.

         Section 12.5.     Counterparts;  Facsimile.  This  Agreement  may be
executed  in  counterparts,  each of which  shall  be  deemed  an  original
agreement,  but all of which  together  shall  constitute  one and the same
instrument.  This agreement may be executed by facsimile signature.

         Section 12.6.     Titles and  Headings.  The  headings  and table of 
contents in this  Agreement  are for reference purposes only, and shall not in
any way affect the meaning or interpretation of this Agreement.

         Section 12.7. Entire Agreement. This Agreement, including the Schedules
and  Exhibits  attached  thereto,  constitutes  the entire  agreement  among the
parties with respect to the matters  covered  hereby and supersedes all previous
written, oral or implied understandings among them with respect to such matters.

         Section 12.8.     Amendment and  Modification.  This  Agreement may
only be amended or modified in writing signed by the party against whom
enforcement of such amendment or modification is sought.

         Section 12.9.  Public  Announcement.  Except as may be required by law,
neither the Company or the Shareholders, on the one hand, or National or CDL, on
the other hand,  shall issue any press  release or otherwise  publicly  disclose
this Agreement or the transactions  contemplated  hereby or any dealings between
or among the parties in connection  with the subject  matter hereof  without the
prior  approval of the other.  In the event that any such press release or other
public disclosure shall be required, the party required to issue such release or
other  disclosure  shall  consult in good faith with the other party hereto with
respect to the form and substance of such release or other  disclosure  prior to
the public dissemination thereof.

         Section 12.10. Waiver. Any of the terms or conditions of this Agreement
may be  waived  at any time by the  party or  parties  entitled  to the  benefit
thereof, but only by a writing signed by the party or parties waiving such terms
or conditions.

         Section 12.11. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction  hereunder is too broad to permit  enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.

         Section  12.12.  No Strict  Construction.  Each of the  parties to this
Agreement  acknowledge  that this  Agreement  has been  prepared  jointly by the
parties hereto, and shall not be strictly construed against any party.

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

                                     FIRST CHOICE COURIER AND 
                                     DISTRIBUTION SYSTEMS, INC.
                    
                                     By:  /s/  Charles Walch
                                     Name:  Charles Walch
                                     Title:

                                     REGIONAL EXPRESS II, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     REGIONAL EXPRESS III, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     MANTECA ENTERPRISES, INC.

                                     By:  /s/  Terry Bozzay
                                     Name:  Terry Bozzay
                                     Title:

                                     /s/  Terry Bozzay
                                     TERRY BOZZAY

                                     /s/  Randy Cooper
                                     RANDY COOPER

                                     /s/ Charles Walch
                                     CHARLES WALCH

                                     NATIONAL EXPRESS COMPANY, INC.

                                     By:  /s/  Mark Carlesimo
                                     Name:  Mark Carlesimo
                                     Title:  Vice president

                                     CONSOLIDATED DELIVERY & LOGISTICS, INC.

                                     By:  /s/  Albert W.  Van Ness
                                     Name:  Albert W. Van Ness, Jr.
                                     Title:  Chairman and CEO
-iv-
                                            TABLE OF CONTENTS

                                          Article I - The Merger

Section 1.1.        Delivery and Filing of Articles of Merger...................
Section 1.2.        Effective Time of the Merger................................
Section 1.3.        Articles of Incorporation...................................
Section 1.4.        Certain Information With Respect to the Capital Stock of the
                    Company and National .......................................
Section 1.5.        Effect of Merger............................................
Section 1.6.        Manner of Conversion........................................

                                 Article II - Purchase and Sale of Stock;
                                           Additional Covenants

Section 2.1.        Purchase and Sale of Stock..................................
Section 2.2.        Purchase Price..............................................

                                  Article III - Requirements of Delivery

                                           Article IV - Closing

                                     Article V - Certain Definitions

Section 5.1.        Certain Definitions.........................................
Section 5.2.        Interpretation..............................................

                    Article VI - Representations and Warranties Regarding the
                                          Company

Section 6.1.        Organization and Qualification of the Company...............
Section 6.2.        Authorization...............................................
Section 6.3.        Non-contravention...........................................
Section 6.4.        No Consents.................................................
Section 6.5.        Capitalization..............................................
Section 6.6.        Personal Property...........................................
Section 6.7.        Real Property...............................................
Section 6.8.        Financial Statements........................................
Section 6.9.        Absence of Certain Developments.............................
Section 6.10.       Governmental Authorizations; Licenses.......................
Section 6.11.       Litigation..................................................
Section 6.12.       Undisclosed Liabilities....................................
Section 6.13.       Taxes......................................................
Section 6.14.       Insurance..................................................
Section 6.15.       Environmental Matters.......................................
Section 6.16.       Employee Matters............................................
Section 6.17.       Employee Benefit Plans......................................
Section 6.18.       Proprietary Rights..........................................
Section 6.19.       Accounts Receivable ........................................
Section 6.20.       Contracts...................................................
Section 6.21        Customers and Suppliers.....................................
Section 6.22.       Predecessor Status..........................................
Section 6.23.       Books and Records...........................................
Section 6.24.       Brokers.....................................................
Section 6.25.       Full Disclosure.............................................

                 Article VII - Representations and Warranties Regarding the
                                         Shareholders

Section 7.1.        Authorization...............................................
Section 7.2.        Non-contravention...........................................
Section 7.3.        No Consents.................................................
Section 7.4.        Ownership of the Company's Stock............................
Section 7.5.        Brokers.....................................................
Section 7.6.        Affiliates..................................................
Section 7.7.        Full Disclosure.............................................

                 Article VIII - Representations and Warranties Regarding
                                       National and CDL

Section 8.1.        Organization................................................
Section 8.2.        Authorization...............................................
Section 8.3.        Non-contravention...........................................
Section 8.4.        No Consents.................................................
Section 8.5.        Brokers.....................................................
Section 8.6         SEC Documents...............................................
Section 8.7         CDL Stock...................................................

                                  Article IX - Covenants and Agreements

Section 9.1.        Access and Information......................................
Section 9.2.        Closing Documents...........................................
Section 9.3.        Taxes.......................................................
Section 9.4.        Non-Competition and Confidentiality Agreement...............
Section 9.5.        Audited Financial Statements of the Company.................
Section 9.6.        Best Efforts; Further Assurances............................
Section 9.7.        Compliance with the Securities Act..........................
Section 9.8.        Covenants of CDL and National...............................
Section 9.9.        Personal Guarantees.........................................

                                      Article X - Closing Deliveries

Section 10.1.       Mutual Conditions...........................................
Section 10.2.       Deliveries by the Company and the Shareholders..............
Section 10.3.       Deliveries by CDL and National..............................

                 Article XI - Survival of Representations and Warranties;
                                        Indemnification

Section 11.1.       Survival of Representations and Warranties..................
Section 11.2.       Indemnification.............................................
Section 11.3.       Procedures for Third Party Claims...........................
Section 11.4.       Procedures for Inter-Party Claims...........................
Section 11.5.       Right of Set-Off............................................
Section 11.6.       Offset to Indemnification...................................
Section 11.7.       Limits on Indemnification...................................
Section 11.8.       Form of Payment.............................................

                                       Article XII - Miscellaneous

Section 12.1.       Notices.....................................................
Section 12.2.       Expenses....................................................
Section 12.3.       Governing Law; Consent to Jurisdiction......................
Section 12.4.       Assignment; Successors and Assigns; No Third Party Rights...
Section 12.5.       Counterparts; Facsimile.....................................
Section 12.6.       Titles and Headings.........................................
Section 12.7.       Entire Agreement............................................
Section 12.8.       Amendment and Modification..................................
Section 12.9.       Public Announcement.........................................
Section 12.10.      Waiver......................................................
Section 12.11.      Severability................................................
Section 12.12.      No Strict Construction......................................

                                                Schedules

Schedule 6.1        Foreign Qualifications of the Company
Schedule 6.3        Contravention of Agreements
Schedule 6.4        Consents
Schedule 6.6        Encumbrances
Schedule 6.7        Leased Real Property
Schedule 6.8        Financial Statements
Schedule 6.9        Certain Developments
Schedule 6.10       Authorizations
Schedule 6.11       Litigation
Schedule 6.12       Disclosed Liabilities
Schedule 6.13       Tax Contests
Schedule 6.14       Insurance
Schedule 6.15       Environmental Matters
Schedule 6.16       Employee Matters
Schedule 6.17       Employee Benefit Plans
Schedule 6.18       Proprietary Rights
Schedule 6.19       Accounts Receivable
Schedule 6.20       Contracts
Schedule 6.21       Customers and Suppliers
Schedule 6.22       Predecessor Names
Schedule 7.6        Affiliates
Schedule 9.9        Debt Guaranteed by Shareholders
Schedule 10.2       Promissory Notes

                                   Exhibits

Exhibit A           Allocation of Consideration to be Paid to Shareholders and
                    Ownership of Company's Stock
Exhibit B           Form of the Notes
Exhibit C           Forms of Employment Agreements
Exhibit D           Form of Opinion of Counsel to the Company and the
                    Shareholders
Exhibit 10.2

                  This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                         7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                         OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Terry Bozzay
                                                              December 8, 1998

Address:                 6400 Spencer Place                           No. MN-3
                         St. Louis, MO  63133

Principal Amount:        $718,293                          Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.

                                 ARTICLE ONE

                                SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.

                                     ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.

                                ARTICLE THREE

                     CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $718,293, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise 
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares.  
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.

                                    ARTICLE FOUR

                              RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                  ARTICLE FIVE

                                  MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                        CONSOLIDATED DELIVERY & LOGISTICS, INC.

[Seal]                                  By:__/s/  William T.  Brannan
                                        Name:  William T. Brannan
                                        Title:  President and COO
ASSIGNMENT

                  FOR VALUE RECEIVED ______________________________________
----------------------------------------------------------------------
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within Note, with respect to the conversion  thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:

Name of Assignee          Address                              No. of Shares

Date:__________

                                           Signature:

                                           Witness:
EXERCISE AGREEMENT

                                                              Date:__________

                  The  undersigned,  pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the  Company's  Common  Stock as provided  in the Note,  and
makes payment in full  therefore by  conversion  and  application  to the extent
necessary  to pay the  Conversion  Price  for such  shares  of 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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.

                                             Signature

                                             Address
This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                              7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                              OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Randy Cooper
                                                               December 8, 1998
Address:                 6400 Spencer Place                            No. MN-1
                         St. Louis, MO  63133

Principal Amount:        $122,707                           Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.

                                     ARTICLE ONE

                                    SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.

                                     ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.

                                  ARTICLE THREE

                        CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $122,707, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares.
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.

                                     ARTICLE FOUR

                                RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                   ARTICLE FIVE

                                   MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                     CONSOLIDATED DELIVERY & LOGISTICS, INC.

[Seal]                               By:  /s/ William T.  Brannan
                                     Name:  William T.  Brannan
                                     Title:  President and COO

                               ASSIGNMENT

                  FOR VALUE RECEIVED ______________________________________
----------------------------------------------------------------------
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within Note, with respect to the conversion  thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:

Name of Assignee                 Address                      No. of Shares

Date:__________

                                                                Signature:

                                                                Witness:
EXERCISE AGREEMENT

                                                              Date:__________

                  The  undersigned,  pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the  Company's  Common  Stock as provided  in the Note,  and
makes payment in full  therefore by  conversion  and  application  to the extent
necessary  to pay the  Conversion  Price  for such  shares  of 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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.

                                                                Signature

                                                                Address
This Note has been,  and any  shares  issued  upon  conversion
                  pursuant to the terms hereof  ("Underlying  Shares")  will be,
                  acquired for investment and not with a view to, or for sale in
                  connection with, any  distribution  thereof within the meaning
                  of the Securities Act of 1933, as amended ("Act").  This Note,
                  and any  securities  issued upon  conversion  pursuant to this
                  Note,  have not been  registered  under the  Securities Act of
                  1933, or any state securities law, and may be offered and sold
                  only if registered  pursuant to the  provisions of that Act or
                  those laws or if an exemption from registration is available.

                  Notwithstanding  any other  provisions  contained  herein,  no
                  transfer of this security,  the Underlying  Shares,  or of any
                  interest in either thereof shall be made unless the conditions
                  specified in Article Four hereof have been fulfilled.

                              7% SUBORDINATED CONVERTIBLE NOTE DUE 2001
                              OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:       Charles Walch
                                                               December 8, 1998
Address:                 6400 Spencer Place                            No. MN-2
                         St. Louis, MO  63133

Principal Amount:        $559,000                           Clifton, New Jersey

Due:                     December 8, 2001

                  FOR VALUE RECEIVED, CONSOLIDATED DELIVERY & LOGISTICS, INC., a
Delaware corporation (hereinafter called the "Company"),  hereby promises to pay
to the holder above named (herein called the "Holder"),  the principal sum above
stated on  December  8, 2001 and to pay  interest  thereon  at the rate of seven
percent (7%) per annum from the date hereof.  Interest  shall be computed on the
balance  of  principal  outstanding  from time to time,  and  payable  quarterly
beginning on February 28, 1999.

                  Both  principal  hereof and  interest  thereon  are payable in
lawful money of the United  States of America at the Holder's  address  above or
such other  address as the Holder shall  designate  in writing  delivered to the
Company from time to time. Prior to any sale or other  disposition of this Note,
the Holder will endorse  hereon the amount of principal paid hereon and the last
date to which interest has been paid hereon.

PREPAYMENT

                  The Company may prepay this debt, in whole or in part, without
premium  or  penalty  at any time on and after the  "Trigger  Date" (as  defined
below) and from time to time  thereafter  in its  discretion;  provided  that it
gives the Holder ten (10) days advance  written  notice of its intent to prepay;
during which period the Holder may exercise his then existing conversion rights,
if any.

                                 ARTICLE ONE

                                SUBORDINATION

                  Anything contained herein to the contrary notwithstanding, the
indebtedness  evidenced  by this Note shall be fully  subordinate  and junior in
right of payment,  to the extent and in the manner hereinafter set forth, to all
Senior Debt of the Company, including,  without limitation, all indebtedness due
to First Union  Commercial  Corporation or its affiliates,  or any other bank or
similar  financial  institution  (hereinafter  a  "bank"),  direct or  indirect,
absolute  or  contingent,  due or to become  due,  whether  now  outstanding  or
hereafter created,  and any and all renewals or replacements of the foregoing by
contract,  operation of law or otherwise.  Such  indebtedness  of the Company to
which the  indebtedness  evidenced  by this  Note and the  interest  thereon  is
subordinate and junior being sometimes  hereinafter referred to as "Senior Debt"
and also includes  without  limitation  all debt or financing  from time to time
arranged by First Union  Commercial  Corporation  or its affiliates or any other
bank  or  institutional  debt,  including  but not  limited  to,  any  mezzanine
financing of the Company for working capital,  acquisitions, or similar purposes
to be provided by Paribas Capital Funding LLC and/or others.

                                    (i)  In  the  event  of  any  insolvency  or
                  bankruptcy  proceedings,  and any  receivership,  liquidation,
                  reorganization  or other  similar  proceedings  in  connection
                  therewith,  relative  to the Company or to its  creditors,  as
                  such, or to its property,  and in the event of any proceedings
                  for voluntary liquidation,  dissolution or other winding up of
                  the  Company,   whether  or  not   involving   insolvency   or
                  bankruptcy,  and in the event of any execution  sale, then the
                  holders of Senior Debt shall be entitled to receive payment in
                  full of all  principal  of, and premium on and interest on all
                  Senior  Debt  (including  any such  interest  which may accrue
                  after the  commencement  of any such  proceedings)  before the
                  Holder of this Note is entitled to receive any further payment
                  on account of principal  of or premium,  if any, on this Note,
                  and to that end the  holders of Senior  Debt shall be entitled
                  to receive for  application in payment  thereof any payment or
                  distribution  of any  kind or  character,  whether  in cash or
                  property or securities, which may be payable or deliverable in
                  any such  proceedings  in  respect  to this Note  except  with
                  respect to interest payments.

                                    (ii) The  Company  shall not be  required to
                  make,  directly  or  indirectly,  and the Holder  shall not be
                  entitled to accept,  receive  (directly or indirectly)  or, if
                  improperly  accepted  or  received,  retain,  any  payment  or
                  prepayment of principal or premium hereunder if and so long as
                  a payment  default  under the terms of any  Senior  Debt shall
                  have occurred and shall be continuing.

                                    (iii)  In  the  event   that  this  Note  is
                  declared due and payable before its expressed maturity because
                  of the occurrence of a default hereunder (under  circumstances
                  when  the   provisions  of  clause  (i)  above  shall  not  be
                  applicable),  and  within  90 days of  such  declaration,  the
                  holders  of  the  Senior  Debt  accelerate  the   indebtedness
                  evidenced by such Senior Debt,  the holders of all Senior Debt
                  shall be entitled to receive  payment in full of all principal
                  and interest on all Senior Debt  (including  any such interest
                  which may accrue  after the  commencement  of any  proceedings
                  referred  to in clause  (i)  above)  before the Holder of this
                  Note  shall  receive  any  further  payment  on account of the
                  principal of or premium, if any, on this Note.

                  Unless an event  described  in (i),  (ii) or (iii) above shall
occur,  principal  of and  accrued  interest  on this Note  shall be  payable as
provided  on the first  page;  and in the  event the  payment  is  suspended  as
provided in (i),  (ii) or (iii)  above,  any amount  previously  received by the
Holder  hereof  prior to the  effective  date of such  event and  payable to the
Holder in  accordance  with the terms hereof shall be and remain the property of
the Holder, the subordination  provisions being intended only to affect payments
due after an event described in (i), (ii) or (iii).

                  In case cash,  securities or other property  otherwise payable
or  deliverable  to the Holder of this Note shall have been applied  pursuant to
the  provisions of this Note to the payment of Senior Debt in full,  then and in
each  such  case,  the  holder or  holders  of the  Senior  Debt at the time any
payments  or  distributions  are  received by such  holder(s)  of Senior Debt in
excess of the amount  sufficient  to pay all Senior Debt in full,  (a) shall pay
over  such  excess to the  Holder  of this Note and (b) the  Holder of this Note
shall be subrogated to any rights of any holder(s) of Senior Debt to receive any
further payments or distributions applicable to the Senior Debt, until this Note
shall have been paid in full.  Senior Debt shall not be considered to be paid in
full unless and until all of the obligations  which  constitute a part of Senior
Debt have been paid in full.

                  In furtherance of such subordination,  the Holder of this Note
hereby grants to the holder(s) of the Senior Debt irrevocable  authority,  after
any default in the payment of any amounts due on the Senior Debt or in any event
specified in clauses (i), (ii) or (iii) above, to demand,  collect,  file proofs
of claim with  respect  to,  receive  and take any and all  proceedings  for the
recovery of any and all monies due or to become due on account of this Note.

                  No present or future holder of Senior Debt shall be prejudiced
in his right to enforce  subordination of this Note by any act or failure to act
on the part of the Company. The subordination provisions of this Note are solely
for the purpose of defining the relative  rights of the holder(s) of Senior Debt
on the one hand and the  Holder  of this  Note on the other  hand,  and  nothing
herein  shall  impair as between the  Company  and the Holder of this Note,  the
obligation of the Company,  which is unconditional  and absolute,  to pay to the
Holder hereof the principal  hereof and premium,  if any, and interest hereon in
accordance with its terms,  nor shall anything herein prevent the Holder of this
Note from declaring the Note to be due and payable before its expressed maturity
because of the  occurrence of a default  hereunder or, in connection  therewith,
from exercising all remedies otherwise  permitted by applicable law or hereunder
upon default hereunder, subject to the rights of holders of Senior Debt to cash,
securities or other property  otherwise  payable or deliverable to the Holder of
this Note.

                  In  furtherance  of this  subordination  the Holder  agrees to
execute and deliver any and all documents  requested by the Company for delivery
to its  creditors  (in the  form as  requested  by such  creditors)  in order to
implement or verify this subordination.

                                      ARTICLE TWO

                                  EVENTS OF DEFAULT

                  If any of the following  events of default (each, an "Event of
Default") shall occur, the Holder hereof, at his option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

                  For purposes of this  instrument,  an Event of Default  will
be deemed to have  occurred if:

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or  interest on this Note and such
                  non-payment  shall  continue for a period of fifteen (15) days
                  from the date due; or

                                    (b) a receiver, liquidator or trustee of the
                  Company or of any property of the Company,  shall be appointed
                  by court order;  or the Company shall be adjudged  bankrupt or
                  insolvent;  or any of the  property  of the  Company  shall be
                  sequestered  by court order;  or a petition to reorganize  the
                  Company under any bankruptcy, reorganization or insolvency law
                  shall be filed  against the Company and shall not be dismissed
                  within 60 days after such filing; or

                                    (c) the  Company  shall file a  petition  in
                  voluntary  bankruptcy or requesting  reorganization  under any
                  provision of any bankruptcy,  reorganization or insolvency law
                  or shall  consent  to the  filing of any  petition  against it
                  under any such law; or

                                    (d)  the  Company  shall  make a  formal  or
                  informal  assignment for the benefit of its creditors or admit
                  in writing its inability to pay its debts  generally when they
                  become due or shall consent to the  appointment of a receiver,
                  trustee or  liquidator of the Company or of all or any part of
                  the property of the Company.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to his
rights and remedies under this Note, and any other  instruments,  the Holder may
at his option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  In  addition,  after an Event of
Default,  interest  shall be payable  hereunder at the rate of nine percent (9%)
per annum.

                  Subject to the rights of  holders of Senior  Debt,  the Holder
may proceed to protect  and enforce his rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.

                                    ARTICLE THREE

                         CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert fifty  percent  (50%) of the principal  amount of this
Note into fully paid and  non-assessable  shares of the Company's  Common Stock,
$.001 par value (the "Common Stock"),  at the "Conversion  Price" per share. The
"Conversion Price" is defined as Seven and 00/100 Dollars ($7.00).  The right to
convert  may be  exercised  by either  party at any time  within 30 days after a
Trigger Date provided that the closing price of the Common Stock is greater than
the Conversion  Price at the end of business on the day prior to the date of the
notice of exercise,  provided, however, that if required by the Company pursuant
to an  existing  indemnification  claim under  Article 11 of the Stock  Purchase
Agreement,  the Holder must pledge such shares to the Company with a value equal
to the claim net of any  applicable  setoffs to secure all  indemnification  and
other  obligations  of the  Holder  or its  principals  to  the  Company  or its
affiliates  pursuant to a pledge  agreement in form and substance  acceptable to
the Company. The number of shares of Common Stock into which fifty percent (50%)
of the  principal  amount of this Note may be converted  shall be  determined by
taking (a) fifty  percent (50%) of the sum of (1) the full  principal  amount of
this Note, namely $559,000, 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 3.06 below.  The right to convert may only be exercised  with respect to
the entire  fifty  percent  (50%) of the amount due on the Note at the  exercise
date.  The  amount and kind of  securities  purchasable  pursuant  to the rights
granted  hereby  and the  purchase  price for such  securities  are  subject  to
adjustment as provided hereunder.

                  The exercise by the Holder of his conversion  privilege  shall
extinguish the Company's conversion  privilege,  and the exercise by the Company
of its conversion privilege shall extinguish the Holder's conversion privilege.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first business day after the date hereof on which both the closing sale price on
said  business  day and the  average  closing  sales  price as  reported  by the
National  Association  of Securities  Dealers  during the 30 calendar day period
preceding said business day equals or exceeds the Conversion Price.

                  3.01 Whole Shares.  Upon  conversion,  only whole shares shall
be issued.  Any remainder due  hereunder  which is  insufficient  to  purchase a
whole  share of Common  Stock  shall be paid by the Company in cash.

                  3.02  Exercise Procedure.

                  (a) The  conversion  privilege  shall be  deemed  to have been
exercised (the "Exercise  Time") when either (x) the Company shall have received
from the Holder all of the following:

                                    (i) a properly  completed  Exercise
                  Agreement in form annexed  hereto executed by the person
                  exercising such conversion privilege; and

                                    (ii)  this Note; and

                                    (iii) if the  payee of this  Note is not the
                  person exercising such conversion privilege,  an assignment or
                  assignments as described in Section 3.04 hereof  evidencing an
                  assignment of such Note to the person  exercising the same, in
                  which case the Holder  shall  comply with  Article Four hereof
                  and submit proof, including opinions of Holder's counsel, that
                  the assignment and exercise  comply with all federal and state
                  securities laws.

or (y) the Company shall have  delivered to the Holder its notice of exercise in
writing.  Upon receipt of such notice, the Holder shall immediately deliver this
Note to the Company.  Exercise of the Company's  conversion  privilege  shall be
effective  notwithstanding  any failure or delay of the Holder on delivering the
Note to the  Company,  and no interest  shall accrue  hereunder  with respect to
fifty percent (50%) of the principal amount of this Note after the Company sends
Holder its notice of exercise of the conversion privilege.

                  (b) Certificates for the underlying shares acquired,  together
with a new Note for such remaining principal balance with the same terms as this
Note except for the  conversion  rights/obligations,  shall be  delivered to the
Holder  within 20 days after the  Exercise  Time (or the date of delivery of the
Note to the Company, if later).

                  3.03 Exercise  Agreement.  The Exercise  Agreement shall be in
the form set forth at the end of this Note. If the Conversion  Shares are not to
be issued in the name of the payee on the 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.

                  3.04 Assignment. The Assignment shall be in the form set forth
at the end of this Note and shall  provide  that the person  executing  the same
thereby sells,  assigns and transfers to the person(s)  named therein the rights
evidenced by this Note to purchase the number of the  Underlying  Shares  stated
therein.  Such Assignment  shall be dated the actual date of execution  thereof.
The Assignee  shall be required to provide the Company with proof of  compliance
with all applicable federal and state securities laws.

                  3.05  Authorization  and  Issuance  of  Conversion  Shares. 
The Company  covenants  and agrees that:

                  (a) The  Underlying  Shares  issuable upon any exercise of the
conversion  privilege  shall  be  deemed  to  have  been  issued  to the  person
exercising  such privilege at the Exercise Time, and the person  exercising such
privilege  shall be deemed for all purposes to have become the record  holder of
such Underlying Shares at the Exercise Time.

                  (b)  All  Underlying  Shares  which  may be  issued  upon  any
exercise will, upon issuance, be fully paid and non-assessable and free from all
taxes, liens and charges with respect to the issue thereof.

                  (c) The Company  will take all such action as may be necessary
and reasonably  within its powers to assure that all underlying  shares issuable
upon  exercise  may  be  issued  without  violation  of  any  applicable  law or
regulation.  The  Company  will not take any action  which  would  result in any
adjustment of the Conversion Price if the total number of Common Shares issuable
after such action upon exercise of the  conversion  privilege in full,  together
with all Common Shares then outstanding and all Common Shares then issuable upon
the exercise of all outstanding options, warrants,  conversion and other rights,
would exceed the total number of Common Shares then  authorized by the Company's
Certificate of Incorporation.

                  (d) The issuance of  certificates  for the  Underlying  Shares
upon exercise of the  conversion  privilege  shall be made without charge to the
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.

                  3.06 Anti-dilution. The Conversion Price shall be adjusted, to
the nearest cent, from time to time, only to the following extent:

                  (a)  Whenever  after the date  hereof  the  Company  shall (i)
declare  and pay a dividend  to the  holders  of its  shares of common  stock in
shares of its common stock, or in other securities immediately  convertible into
shares of common stock,  (ii) split the  outstanding  shares of its common stock
into a greater  number of outstanding  shares of common stock,  or (iii) combine
the outstanding  shares of its common stock into a smaller number of outstanding
shares of common  stock,  the maximum  number of shares that the Holder shall be
entitled to convert and/or purchase shall be adjusted so that the Holder of this
Note shall thereafter be entitled to receive upon conversion of the entire fifty
percent  (50%) of the  initial  indebtedness  represented  hereby that number of
shares of common  stock  which he would have held had the entire  fifty  percent
(50%) of the initial indebtedness of this Note been converted  immediately prior
to the effective date of such action and had that action been  effectuated  with
respect to those converted  shares.  In any such event the Conversion Price will
be altered  accordingly  so that any  conversion  taking  place  after any event
described in (i), (ii),  and/or (iii) above may be accomplished at the same cost
that would have obtained had the shares been converted immediately prior to such
action.  For purposes of this subparagraph (a), the effective date for any stock
dividend,  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 Note shall  thereafter be convertible into the number
of  shares of stock or other  securities  or  property  to which a holder of the
number of shares of common stock of the Company  deliverable  upon conversion of
this  Note   immediately   prior  to  such   reorganization,   reclassification,
consolidation,  merger or conveyance would have been entitled upon  consummation
of such reorganization,  reclassification,  consolidation, merger or conveyance;
and, in any such case,  appropriate  adjustment  (as  determined by the board of
directors)  shall be made in the application of the provisions  herein set forth
with  respect to the rights and  interests of the holder of this Note to the end
that such provisions (including, without limitation, the provisions with respect
to changes in and other adjustments of the Conversion Price) shall thereafter be
applicable,  as nearly  as  reasonably  may be, to the  shares of stock or other
securities or property thereafter deliverable upon the conversion of this Note.

                                  ARTICLE FOUR

                            RESTRICTIONS ON TRANSFER

                  The  Holder,  by  acceptance  hereof,   acknowledges  that  he
understands that the Company will rely upon the representations set forth herein
in issuing the Note and the  Underlying  Shares,  if any,  without  registration
under the Act,  the New  Jersey  Uniform  Securities  Law,  or any  other  state
securities law.

                  Accordingly, the Holder, by acceptance of the Note, represents
and warrants that this  offering is being made  pursuant to the  exemption  from
registration  with the Securities and Exchange  Commission  ("SEC")  afforded by
Sections 3(b) and/or 4(2) of the Act relating to  transactions  by an issuer not
involving any public  offering.  The Holder  understands that the Company has no
present  intention,  and is under no  obligation  to,  register  the Note or the
Underlying Shares under the Act, or any applicable state law.

                  The Holder  understands that due to lack of registration,  the
Note and the Underlying  Shares will be restricted  securities,  that the holder
must bear the economic risk of the investment for an indefinite period, that the
Note and the Underlying Shares may not be sold, pledged or otherwise disposed of
unless they are  registered  under the Act and any applicable  state  securities
law, or an  exemption  from such laws is  available  and the Company is supplied
with an opinion of counsel to the  Holder,  satisfactory  to the  Company,  that
registration  is not  required  under any of such  laws,  and in the  opinion of
counsel  for the  Company,  such sale,  transfer,  or pledge  will not cause the
Company to fail to be in compliance  with the exemption  provisions  under which
the Note or the Underlying Shares were issued.

                  The Holder has such  knowledge and experience in financial and
business  affairs that he is capable of  evaluating  the merits and risks of the
prospective investment.

                  The  Holder  is  able  to  bear  the  economic  risk  of  this
investment.  An investment in the Note and the Underlying Shares is suitable for
the Holder in light of his financial  position and investment  objectives,  with
full knowledge that this investment  could result in a complete loss. The Holder
recognizes that the Note represents a HIGH-RISK, SPECULATIVE INVESTMENT and that
there is no assurance that any return will be received  thereon.  The Holder can
afford a total loss of this investment.

                  The  Note  is  being,  and  the  Underlying  Shares  will  be,
purchased  for the Holder's own account for  investment  purposes and not with a
view to the resale or distribution thereof by the Holder.

                  Prior to the date hereof, the Holder has had ample opportunity
to ask  questions of and receive  answers from the officers and directors of the
Company,  concerning the Company,  the Note,  and the Company's  business and to
obtain any additional  information which was considered  necessary to verify the
information supplied by those individuals.

                  The  Holder   understands   that  a   restrictive   legend  in
substantially  the  following  form  shall  be  placed  on  the   certificate(s)
representing the Underlying Shares:

                           "The shares  represented by this certificate have not
                  been  registered  under the Securities Act of 1933, as amended
                  ("Act"). Such shares have been acquired for investment and may
                  not be  publicly  offered  or  sold in the  absence  of (1) an
                  effective  registration  statement  for such shares  under the
                  Act;  (2) opinions of counsel to the Company and to the holder
                  hereof and  presented  to the  Company  prior to any  proposed
                  transfer to the effect that registration is not required under
                  the Act; or (3) a letter  presented to the  Company,  prior to
                  any proposed  transfer,  from the staff of the  Securities and
                  Exchange  Commission,  to the effect that it will not take any
                  enforcement  action if the  proposed  transfer is made without
                  registration under the Act."

                  Notwithstanding  the  foregoing  legend,  the Company will not
require an opinion of counsel if the  Underlying  Shares may be sold pursuant to
the exemption from  registration  pursuant to Rule 144 of the Act. Except as set
forth in the documents  which the Holder has  reviewed,  no  representations  or
warranties  have been made to the Holder by the Company.  In entering  into this
transaction,  the Holder is not  relying  upon any  information,  other than the
results of his own independent investigation.

                                     ARTICLE FIVE

                                    MISCELLANEOUS

                  5.01  Failure or Delay Not Waiver.  No failure or delay on the
part of the Holder  hereof in the  exercise of any power,  right,  or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

                  5.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by Federal Express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Payee,  at the address set forth on the first page hereof.  If to a Holder other
than the Payee, then to the Payee at the address stated in a copy of an executed
assignment of this Note delivered to the Company.

If to the Company:

Consolidated  Delivery & Logistics,  Inc.,  380 Allwood Road,  Clifton,
New Jersey 07012,  Attn:  General Counsel.

                  5.03  Amendments.  The  term  "Note"  or "this  Note"  and all
reference  thereto,  as  used  throughout  this  instrument,   shall  mean  this
instrument as originally executed or, if later amended or supplemented, then, as
so amended or supplemented.

                  5.04  Incorporation  of  Agreement.  This is one of the  Notes
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder  and  others  and is  subject  to set off and to the other  terms and
conditions of such Agreement.

                  5.05  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
his successors and assigns.

                  5.06 Governing Law; Consent to  Jurisdiction.  This Note shall
be governed by, and construed in accordance with, the internal laws of the State
of New Jersey,  without reference to the choice of law principles thereof.  Each
of  the  Holder  and  the  Company  irrevocably  submits  to  the  non-exclusive
jurisdiction  of the courts of the State of New  Jersey  and the  United  States
District  Court for the  District  of New  Jersey,  located  in Passaic or Essex
County,  State of Jersey,  for the purpose of any suit,  action,  proceeding  or
judgment  relating  to  or  arising  out  of  this  Note  and  the  transactions
contemplated hereby. Service of process in connection with any such suit, action
or  proceeding  may be served on each of the Holder and the Company  anywhere in
the world by the same methods as are  specified  for the giving of notices under
this Note.  Each of the  Holder  and the  Company  irrevocably  consents  to the
jurisdiction of any such court in any such suit, action or proceeding and to the
laying of venue in such court.  Each of the Holder and the  Company  irrevocably
waives  any  objection  to the  laying  of  venue of any such  suit,  action  or
proceeding brought in such courts and irrevocably waives any claim that any such
suit,  action or  proceeding  brought in any such  court has been  brought in an
inconvenient forum.

                  5.07 No Personal Liability.  No officer,  director,
shareholder,  employee,  consultant or agent of the Company shall be personally
liable for repayment of this Note.

                  IN WITNESS  WHEREOF,  the  Company  has caused this Note to be
signed in its name by its duly  authorized  officer and its corporate seal to be
affixed hereto.

                                       CONSOLIDATED DELIVERY & LOGISTICS, INC.

[Seal]                                  By:  /s/  William T. Brannan
                                        Name:  William T. Brannan
                                        Title:  President and COO

                                  ASSIGNMENT

                  FOR VALUE RECEIVED ______________________________________
----------------------------------------------------------------------
hereby sells,  assigns and transfers all of the rights of the undersigned  under
the within Note, with respect to the conversion  thereof into a number of shares
of the Common Stock covered thereby set forth hereinbelow unto:

Name of Assignee                   Address                      No. of Shares

Date:__________

                                                                Signature:

                                                                Witness:
EXERCISE AGREEMENT

                                                                Date:__________

                  The  undersigned,  pursuant to the provisions set forth in the
within Note, hereby irrevocably elects to subscribe for and purchase the maximum
number of shares of the  Company's  Common  Stock as provided  in the Note,  and
makes payment in full  therefore by  conversion  and  application  to the extent
necessary  to pay the  Conversion  Price  for such  shares  of 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
distributing  such  Common  Stock,  except  to the  extent  permitted  under the
Securities Act of 1933, as amended.

                                                                Signature

                                                                Address
Exhibit 99.1

FOR IMMEDIATE RELEASE

                                        Drew Kronick, Vice President  
                                        Consolidated Delivery & Logistics, Inc.
                                        (973) 471-1005
     
                                        Lee Laino or Ken DiPaola
                                        The Dilenschneider Group
                                        (212) 922-0900

                    CONSOLIDATED DELIVERY & LOGISTICS, INC. ACQUIRES
                        FIRST CHOICE COURIER AND BOZZAY DELIVERY

       St. Louis Based Courier With Operations in Kansas City & Indianapolis
                         Strengthens CD&L's Midwest Presence

         Clifton, NJ December 9, 1998 - Consolidated Delivery & Logistics,  Inc.
(NASDAQ:  CDLI) announced today that it has acquired privately held First Choice
Courier  and  Bozzay  Delivery.  Based  in St.  Louis  and  with  major  hubs in
Indianapolis  and Kansas City, Mo., the combined  companies had revenues of $8.3
million in 1997. Terms of the acquisition were not disclosed.

         CD&L's Chairman and Chief Executive  Officer,  Albert W. Van Ness, Jr.,
commented, "The acquisition of First Choice and Bozzay was as much about gaining
a mature and aggressive  management  team as it was about  acquiring  proven and
consistently  strong  margins.  CDL's present St. Louis operation will be merged
with First Choice creating a significant presence in this important market."

         Bill   Brannan,   President  and  COO,   added   "CD&L's   strategy  of
consolidating  regional  courier  companies has proven to be highly  successful.
Since 1996, we have acquired and integrated nine strategically located companies
into our operations and have reported  seven  consecutive  quarters of improving
revenue and profit."

         Mr. Brannan added,  "It is a pleasure to welcome Terry Bozzay,  who
founded the original company 22 years ago, to CD&L. Mr. Bozzay will be named the
Midwest  Regional Manager  responsible for CD&L's ground courier  operation from
Chicago/Minneapolis  to Texas and from the  Mississippi to the Rocky  Mountains.
Mr. Randy Cooper and Mr. Charles Pearson,  currently with the Bozzay group, will
become the Regional  Operations Manager and Regional  Controller,  respectively.
Mr.  Charlie  Walch,  a current owner of First  Choice,  will head up the merged
CDL/First Choice St. Louis operation. Ms. Sue Spracjar, currently head of CD&L's
St. Louis operation, will head up the Midwest Regional Sales function and report
to Mr. Bozzay. As important, the majority of the current staff of Bozzay, Kansas
City, headed up by Bryan Ohrman, Bozzay Indianapolis, headed up by Ken Berryhill
and the newly formed St. Louis  CDL/First  Choice business will remain with CD&L
as will the approximate 250 delivery contractors and employee couriers currently
working in the various CDL, First Choice and Bozzay locations.

         Consolidated Delivery & Logistics,  Inc.  headquartered in Clifton, New
Jersey is a full service, same day ground and air delivery and logistics company
with 70 offices in 24 states and the  District  of  Columbia.  The  Company  has
nearly 4,000  employees  and  utilizes  contractors  to provide  time  sensitive
delivery services to thousands of businesses.

         This  press  release   contains  certain   forward-looking   statements
regarding  future  events or the future  financial  performance  of the Company.
These  forward-looking  statements  include  comments  on the  Company's  future
business development. These forward-looking statements involve certain risks and
uncertainties  that may cause the actual events or results to differ  materially
from those  indicated by such  forward-looking  statements.  Potential risks and
uncertainties  include without limitation the risk that the revenues and profits
of the  acquired  companies  will  decrease or fail to improve  over  historical
results,  or that the new  management  group will be unable to  effectively  and
profitably  integrate the two  businesses  or manage the future  business of the
region or the risk that the Company will lack satisfactory merger or acquisition
candidates  and/or  have an  inability  to conclude  acquisitions  or mergers on
satisfactory   terms,  will  be  unable  to  obtain  acquisition   financing  on
satisfactory  terms, or achieve cost savings or additional profits  contemplated
by the Company's  business  management  strategy or other risks specified in the
Company's SEC filing.