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

                                 August 5, 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 August 5, 1998, Consolidated Delivery & Logistics,  Inc. ("CDL") entered into
and  consummated  an  agreement  (the  "Stock  Purchase   Agreement")  with  its
subsidiary,  Silver Star Express,  Inc.  ("Silver Star") and KBD Services,  Inc.
("KBD")  and David L.  Chesney,  KBD's sole  shareholder,  whereby  Silver  Star
purchased  all of the  outstanding  shares  of the  capital  stock  of KBD.

The  purchase  price was  approximately  $4 million,  with $2 million in cash, a
$1.46 million 7%  subordinated  convertible  note (the "Note") and a $500,000 7%
contingent  subordinated  convertible note (the "Contingent  Note"). The Note is
due August 5, 2003 with interest payable  quarterly  commencing  October 1, 1998
and is  convertible  in its  entirety  at the  option of the  holder at any time
through  July 1, 2003 into fully paid  shares of CDL's  stock at the  conversion
price of $6 per share.  CDL may  convert  all or any part of the Note into fully
paid  shares  of CDL's  stock at a  conversion  price of $6 per  share  when the
average  closing sales price equals or exceeds $6 over a thirty day period.  The
Contingent  Note is subject to a dollar for dollar  reduction  or  discharge  if
KBD's  earnings  before  interest  and taxes is less than  $700,000 for the year
ending  July  31,  1999  and is due  with  interest  on the  finally  determined
principal  amount  on  November  1,  1999.  The  holder or CDL may  convert  the
Contingent  Note in its  entirety  into  fully paid  shares of CDL's  stock at a
conversion  price of $6 after  September 16, 1999 through  October 20, 1999. The
Note and the  Contingent  Note are  subordinate  to all  indebtedness  due or to
become due to CDL's senior  lender,  First Union  Commercial  Corporation or its
affiliates.

The description above of the Stock Purchase Agreement,  Note and Contingent Note
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 KBD 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
KBD 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 August 5, 1998 by and between
                Consolidated Delivery & Logistics, Inc., KBD Services, Inc.,
                Silver Star Express, Inc. and David L. Chesney.


10.2            7% Subordinated Convertible Note Due 2003 of Consolidated
                Delivery & Logistics, Inc.


10.3            7% Contingent Subordinated Convertible Note Due 1999 of
                Consolidated Delivery & Logistics, Inc.


99.1            Press Release issued August 10, 1998 regarding acquisition of
                KBD Services, Inc.




<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: August 18, 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

This STOCK PURCHASE AGREEMENT,  dated August 5, 1998, by and among KBD Services,
Inc., a North Carolina  corporation ("KBD" or the "Company"),  David L. Chesney,
an  individual  with an address at 760 Reedy Creek Road,  Cary,  North  Carolina
27512, (the "Shareholder"),  Consolidated Delivery & Logistics, Inc., a Delaware
corporation  ("CDL") and Silver Star Express,  Inc., a Florida  corporation  and
wholly owned subsidiary of CDL ("Purchaser").

                              W I T N E S S E T H:

WHEREAS,  the  Shareholder  is the  record and  beneficial  holder of all of the
issued and outstanding capital stock of the Company; and

WHEREAS,  the  Shareholder  desires  to sell  and  transfer  to  Purchaser,  and
Purchaser  desires to  purchase  from the  Shareholder,  all of the  outstanding
shares  of  capital  stock of the  Company,  all as more  specifically  provided
herein;

NOW,  THEREFORE,  in consideration of the mutual covenants contained herein, and
intending to be legally bound, the parties hereto agree as follows:
                                    ARTICLE I

                               Certain Definitions

Section 1.1.......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 3.19.

         "Affected Property" has the meaning ascribed to such term in
Section 3.15.

         "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 3.9.

         "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.

         "Closing" has the meaning ascribed to such term in Section 2.4.

         "Closing Date" has the meaning ascribed to such term in Section 2.4.

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

         "Company Common Stock" has the meaning ascribed to such term in
Section 2.1.

         "Contracts" has the meaning ascribed to such term in Section 3.20.

         "Damages" has the meaning ascribed to such term in Section 9.2.

         "Employee Benefit Plan" has the meaning ascribed to such term in
Section 3.17.

         "Encumbrances" has the meaning ascribed to such term in Section 3.3.

         "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.

         "Financial Statements" has the meaning ascribed to such term in
Section 3.8.

         "Five Year Note" has the meaning ascribed to such term in Section 2.2.

         "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 9.2.

         "Indemnifying Party" has the meaning ascribed to such term in
Section 9.2

         "Leased Real Property" has the meaning ascribed to such term in
Section 3.7.

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

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

         "One Year Note" has the meaning ascribed to such term in Section 2.2.

         "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" has the meaning ascribed to such term in Section
3.18.

         "Purchase Price" has the meaning ascribed to such term in Section 2.2.

         "Regulated  Substances"  means pollutants,  contaminants,  hazardous or
toxic  substances,  compounds  or  related  materials  or  chemicals,  hazardous
materials,  hazardous waste, flammable explosives, radon, radioactive materials,
asbestos,   urea  formaldehyde  foam  insulation,   polychlorinated   biphenyls,
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.

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

         "Survival Period" has the meaning ascribed to such term in Section 9.1.

         "Tangible Net Worth" means Total Assets,  less (without  limitation and
without duplication of deductions) the sum of (A) Total Liabilities of a Person,
(B) any reserves established by a Person for anticipated losses or expenses, (C)
the amount, if any, of all intangible items including any leasehold rights,  the
amount  of  any  investment  in any  Affiliates  or  other  entity  including  a
subsidiary,  good will (including any amounts, however designated on the balance
sheet,  representing  the cost of  acquisition  of business and  investments  in
excess of underlying tangible assets), trademarks,  trademark rights, trade name
rights, copyrights, patents, patent rights, licenses, unamortized debt discount,
marketing  expenses and customer  and/or  mailing  lists and (D) all amounts due
from employees, stockholders, Affiliates and subsidiaries.

         "Third Party Claim" has the meaning ascribed to such term in
Section 9.3.

         "Total  Assets"  means,  at any date, the amount shown in the books and
records of a Person,  determined in accordance with GAAP, of all property,  both
real and personal, of a Person.

         "Total  Liabilities"  means, at any date, the amount of all liabilities
which,  in  accordance  with  GAAP,  should be  included  in  determining  total
liabilities  as shown on a liability side of a balance sheet of a Person at such
date.

         Section  1.2.......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;  and (iii) words  importing  the  singular  shall also
include  the  plural,  and vice  versa.  References  to the  "knowledge"  of the
Stockholder or the Company means matters which the  Shareholder  knows or should
know in the performance of his duties for the Company.

                                   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 Section 2.4), the Shareholder shall sell,  assign,  transfer,  convey
and deliver to Purchaser (i) an aggregate of 100 shares of the common stock, par
value $1.00 per share, of the Company (the "Company  Common  Stock"),  which the
Shareholder  represents  constitutes all of the issued and outstanding shares of
the Company's  capital stock,  and Purchaser shall purchase such shares from the
Shareholder.

         Section 2.2.  Purchase Price.

                  (a)      The  aggregate  purchase price (the "Purchase Price")
to be paid by Purchaser for the Company Common Stock shall be an amount equal to
$4,028,777  subject to reduction as provided below and in the One Year Note (the
"Purchase Price").

                  (b)     The Base Purchase Price shall be payable in four parts
 as follows:

                         (i)      $2,033,777,  shall be payable in cash at the
Closing (the "Cash  Portion") by wire  transfer to an account or accounts of the
Shareholder  specified in writing by the Shareholder or by one or more certified
or bank cashier's checks payable to the order of the Shareholder;

                        (ii)  $35,000  shall  be  payable  in  cash  by  wire
transfer or check within ten (10) business days after the  Shareholder  provides
the Purchaser  with proof that all  liabilities  of the Company for interest and
penalties due to any taxing authority arising from or relating to periods ending
on or prior to the Closing Date have been satisfied in full;

                       (iii)    $1,460,000,  shall be paid by delivery of a
convertible  note of CDL with a five (5) year term  payable  to the  Shareholder
substantially in the form of Exhibit A hereto (the "Five Year Note"); and

                        (iv)     $500,000,  shall be paid by delivery of a
contingent  convertible  note of CDL,  with  approximately  a one (1) year  term
payable to the  Shareholder  substantially  in the form of Exhibit B hereto (the
"One Year Note", together with the Five Year Note, the "Notes").

                  (c)      The   One  Year  Note  is  subject  to  reduction  or
discharge if the  Company's  earnings  before  interest  and taxes,  computed in
accordance  with GAAP, for the one year period ended July 31, 1999, is less than
$700,000.  Reduction  is on a dollar for dollar basis for the amount of the EBIT
Shortfall. The reduction is more fully described in the One Year Note.

         Section  2.3.......Retained  Liabilities.  The Shareholder shall remain
liable for any  litigation or other  contingent  liabilities  (including but not
limited to any tax liabilities not accrued for on the Financial Statements,  any
interest  or  penalties  due  with  respect  to any  tax  liabilities,  and  any
liabilities  arising  from  the  Company's  failure  to  qualify  as  a  foreign
corporation   in  any  state)  listed  on  the   Schedules  to  this   Agreement
notwithstanding such disclosure.

         Section 2.4.......Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Lowenstein Sandler PC,
65 Livingston Avenue,  Roseland,  New Jersey, at 10:00 A.M. on August 5, 1998 or
by facsimile on such date with original  documents to follow;  provided that, if
the conditions set forth in Article VII have not been either satisfied or waived
by such date,  then the Closing  shall occur  within five  Business  Days of the
satisfaction  or waiver of such conditions or at such other time and place as is
mutually  agreed by the  parties  hereto.  The time and date of the  Closing  is
herein called the "Closing Date".

                                   ARTICLE III

              Representations and Warranties Regarding the Company

         The  Shareholder  represents  and  warrants  to  Purchaser  and  CDL as
follows:

         Section  3.1.......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 North  Carolina,  with full power and  authority,
corporate and other,  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 3.1, which constitute all of the  jurisdictions in which the Company is
currently  conducting  its  business  (except  for three  states as to which the
Shareholder is currently in the process of qualifying the Company to do business
and which the Shareholder undertakes to complete expeditiously). The Company has
previously  provided to Purchaser  and CDL true and  complete  copies of (i) its
Certificate of Incorporation  and all amendments  thereto,  and (ii) its by-laws
and all amendments thereto. Other than as indicated on Schedule 3.1 the business
of the Company is conducted  solely through the Company and the Company does not
own, directly or indirectly,  any subsidiaries.  The Shareholder has no interest
in any business  engaged in air or ground  messenger,  courier or small  package
delivery services (the "Business") other than the Company.

         Section  3.2.......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 3.3.......Non-contravention. 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  Certificate 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,  or (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.

         Section 3.4.......No Consents.  Except as set forth in Schedule 3.4, 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  3.5.......Capitalization.  The  Company's  authorized  capital
stock consists  solely of 100,000  authorized  shares of Company Common Stock of
which 100 shares of Company Common Stock 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   3.6.......Personal   Property.   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
except  as set  forth in  Schedule  3.6.  To the  Shareholder's  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 3.7.......Leased Real Property. Except as set forth in Schedule
3.7, 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.  To  the  Shareholder's  knowledge,  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)
with no  structural or other  defects that could  interfere  with the conduct of
normal operation of such facilities.  The Company has delivered to Purchaser and
CDL true and complete copies of any leases for the Leased Real Property.  To the
Shareholder's  knowledge with respect to buildings not owned by the Shareholder,
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.

         Section  3.8.......Financial  Statements.  The Company  has  previously
furnished  to  Purchaser  and CDL (i) a true and  complete  copy of the  audited
balance  sheets of the Company,  taken as a whole,  as of March 31, 1998 and the
related statements of income, cash flows and changes in stockholders' equity for
the three (3) years then ended, certified by the independent  accountants of the
Company,  and (ii) a true and complete copy of an unaudited balance sheet of the
Company as of June 30, 1998 and the related statements of income, cash flows and
changes  in  stockholders'  equity  for  the  three  month  period  then  ended,
(collectively,  the "Financial Statements").  The Financial Statements have been
prepared in  conformity  with GAAP,  applied on a  consistent  basis and present
fairly the  financial  condition  and results of operations of the Company as of
and for the periods included therein.

         Section 3.9.......Absence of Certain Developments.  Except as set forth
in Schedule 3.9, since March 31, 1998,  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 3.9, since
March 31, 1998,  the 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)
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  Certificate  of  Incorporation  or  by-laws or taken any action in
contemplation of an amendment to such Certificate 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  Shareholder,
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,  or (xiii) entered into any agreement to do any
of the foregoing.

         Section  3.10......Governmental  Authorizations;   Licenses;  Etc.  The
business of the  Company  has been  operated  in  compliance  with all  material
applicable laws, rules,  regulations,  codes,  ordinances,  orders, policies and
guidelines of all Governmental Authorities,  including but not limited to, those
related to: fire, safety,  labeling of products,  pricing, sales or distribution
of products, antitrust, trade regulation, trade practices, sanitation, land use,
employment  or  employment  practices,  energy and similar  laws (but  excluding
parking and minor traffic violations). To the knowledge of the Shareholder,  the
Company  has  all  permits,   licenses,   approvals,   certificates   and  other
authorizations,  and has made all notifications,  registrations,  certifications
and filings with all  Governmental  Authorities,  necessary or advisable for the
operation of its business as currently  conducted.  There is no action,  case or
proceeding  pending or, to the best knowledge of the Company,  threatened by any
Governmental  Authority with respect to (i) any alleged violation by the Company
or its Affiliates of any law, rule, regulation,  code, ordinance,  order, policy
or guideline of any Governmental  Authority,  or (ii) any alleged failure by the
Company or its Affiliates to have any permit, license,  approval,  certification
or  other  authorization  required  in  connection  with  the  operation  of its
business.  No notice of any  violation  of such  laws has been  received  by the
Company or any of its Affiliates.

         Section  3.11......Litigation.  Except as set forth in  Schedule  3.11,
there are no lawsuits, actions,  proceedings,  claims,  arbitrations,  orders or
investigations  by or before any Governmental  Authority pending or, to the best
knowledge  of the  Company,  threatened  against the  Company or its  Affiliates
relating to such Company, its business or any product or service alleged to have
been sold by such  Company or seeking  to enjoin the  transactions  contemplated
hereby  and,  except  as set  forth  in  Schedule  3.11,  there  are no facts or
circumstances  known to the Company  that could result in a claim for damages or
equitable  relief which, if decided  adversely,  could reasonably be expected to
result in a Material Adverse Change, individually or in the aggregate.

         Section 3.12......Undisclosed  Liabilities.  Other than those reflected
in the Financial  Statements,  there are no material (defined below) 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
to the Shareholder'  knowledge,  there exists no facts or  circumstances  (other
than general economic conditions) that could reasonably be expected to result in
any  such  liability.  "Material"  liabilities  means  liabilities  that  in the
aggregate exceed $10,000.

         Section 3.13......Taxes.  All federal, state, county, local and foreign
tax  returns  and  reports of the  Company  required  to be filed have been duly
filed. All federal, state, county, local, foreign and any other taxes (including
all income,  withholding and employment taxes),  assessments (including interest
and  penalties),  fees  and  other  governmental  charges  with  respect  to the
employees,  properties,  assets,  income or  franchises of the Company have been
paid or duly provided for, or are being  contested in good faith by  appropriate
proceedings  as disclosed on Schedule 3.13 and adequate  reserves  therefor have
been  established   pursuant  to  GAAP,  and  are  reflected  on  the  Financial
Statements. There are no tax liens on any of the assets of the Company.

         Section  3.14......Insurance.  Schedule  3.14  sets  forth  a true  and
correct list of all insurance  policies or binders  maintained by the Company on
the date  hereof  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 policies and binders are, and at all times prior to the Closing will be, in
full force and  effect.  The Company has not  permitted  or suffered  any gap in
insurance coverage during the past six years.

         Section  3.15......Environmental   Matters.  Except  as  set  forth  on
Schedule  3.15,  to the  knowledge of the  Shareholder,  (i) the business of the
Company is being and has been  conducted in  compliance  with all  Environmental
Laws,  (ii)  the  real  property  owned,  leased  or  operated  by  the  Company
(including,  without limitation, soil, groundwater or surface water on, under or
adjacent to the properties and buildings thereon) (the "Affected Property") does
not contain any Regulated  Substance  other than as permitted  under  applicable
Environmental  Laws,  (iii) the  Company  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 of the Company,
(iv) the Company has not  received  any notice from any  Governmental  Authority
that the Company or any of its Affiliates 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  Company,  (v) no reports have been
filed, or have been required to be filed, by the Company  concerning the release
of any Regulated  Substance or the violation of any  Environmental  Law on or at
the properties used in the business of the Company,  (vi) no Regulated Substance
has been disposed of,  transferred,  released or  transported  from the Affected
Property, other than as permitted under applicable Environmental Law pursuant to
appropriate  regulations,  permits or  authorizations,  (vii) 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  of the  Company,  true and  complete  copies  of  which  have not been
delivered  to Purchaser  and CDL prior to the date  hereof,  (viii) there are no
underground  storage  tanks  on,  in or  under  any  Affected  Property  and  no
underground  storage  tanks  have  been  closed  or  removed  from any  Affected
Property, (ix) the Company has not presently incurred, and the Affected Property
is not presently subject to, any liabilities  (fixed or contingent)  relating to
any  suit,  settlement,   judgment  or  claim  asserted  or  arising  under  any
Environmental  Law,  (x) all  Environmental  Laws in  existence  at the time the
Affected  Property was acquired were complied with, and (xi) there are no civil,
criminal  or  administrative   actions,   suits,  demands,   claims,   hearings,
investigations or other proceedings pending or threatened against the Company or
any of its  Affiliates  with respect to the business of the Company  relating to
any violations, or alleged violations, of any Environmental Law, and neither the
Company nor any of its  Affiliates  has 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  any  of its  Affiliates  has  been  notified  by any  Governmental
Authority or any other Person that the Company has, or may have,  any  liability
pursuant to any Environmental Law.

         Section 3.16......Employee Matters.

         (a) Schedule 3.16 contains a true and complete list as of June 30, 1998
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  3.16,  (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 Purchaser 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  3.17......Employee  Benefit  Plans.  Schedule  3.17  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 3.17, 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 3.18......Proprietary Rights.

         (a)  All  of  the  Company's  patents,  patent  registrations,   patent
applications,   trademarks,   service   marks,   trademark   and  service   mark
registrations and applications therefor,  copyrights,  copyright  registrations,
copyrights applications,  trade names, corporate names, technology,  inventions,
computer software, data and documentation  (including electronic media), product
drawings, trade secrets, know-how, customer lists, processes, other intellectual
property and proprietary  information or rights; and permits,  licenses or other
agreements to or from third parties  regarding the foregoing  (the  "Proprietary
Rights") are listed in Schedule 3.18. Except as disclosed therein,  the Company,
either jointly or individually, owns and possesses all right, title and interest
in the  Proprietary  Rights.  The Company has taken all  necessary  or desirable
action to protect the Proprietary  Rights and 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  Right has been made,  is
currently pending or, to the best knowledge of the Company,  is threatened.  The
Company has not received any notice 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 business of the Company
as now conducted.

         Section 3.19......Accounts Receivable.  Schedule 3.19 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") as of June 30, 1998 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),  have been  billed and are  collectible
within 90 days of the date created.  The Shareholder  shall update this Schedule
as of the Closing Date, subject to the foregoing representations.

         Section 3.20......Contracts.

         (a)  Schedule  3.20  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 or commitments  for the sale by the Company
         of  products  or  services,  or  the  purchase  by the  Company  of raw
         materials,  products or services, other than those that are for amounts
         not to exceed $10,000;

                  (ii) all  agreements  or  commitments  for the purchase by the
         Company of machinery,  equipment or other personal  property other than
         those that are for amounts not to exceed $10,000;

                  (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  Shareholder,  any Affiliate of the  Shareholder or any
         other officer, director or employee of the Company;

                  (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 $5,000;

                  (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 $25,000
         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  Contracts  either as a result of  transactions  contemplated
hereby or otherwise, except as disclosed in Schedule 3.20.

                  (c) Except as disclosed in Schedule  3.20,  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 material 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 material Contracts.

                  (d)  True  and  complete  copies  of  all  written  Contracts,
including any  amendments  thereto,  have been delivered to Purchaser 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  3.21......Customers and Suppliers.  Schedule 3.21 sets forth a
list of (a) the fifteen (15) largest  customers of the Company in terms of gross
sales  during  the year  ended  March  31,  1998  and (b) the ten  (10)  largest
suppliers of the Company in terms of  purchases  during the year ended March 31,
1998.  Except as set forth on Schedule 3.21, (a) no customer  listed on Schedule
3.21 has  notified or otherwise  indicated to the Company that it will stop,  or
decrease  the rate of,  its  purchases  of  services  from the  Company,  and no
customer has, during the current fiscal year, ceased or materially decreased its
purchases of any such services from the Company;  and (b) no supplier  listed on
Schedule  3.21 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 3.21 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  3.22......Books and Records.  The stock records of the Company
fairly and  accurately  reflect the record  ownership of all of the  outstanding
shares of its capital stock. Since April 1, 1995, 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
contains  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 3.23......Net Worth of the  Company.  As of June 30,  1998,
the Company had a tangible  net worth of not less than $740,000.

         Section  3.24......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,  except for Centura  Investment  Bank pursuant to a letter
agreement  dated October 8, 1997. The fees of Centura  Investment Bank fees will
be paid solely by the Shareholder.

         Section 3.25......Full  Disclosure.  No representation or warranty made
by the Shareholder 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 IV

            Representations and Warranties Regarding the Shareholder


         The  Shareholder  represents  and  warrants  to  Purchaser  and  CDL as
follows:

         Section  4.1.......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 4.2.......Non-contravention. Neither the execution and delivery
of this  Agreement nor the  performance by the  Shareholder of their  respective
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 Shareholder is a party or by
which  any  Shareholder  is  bound  or to  which  any of his  or her  assets  or
properties  are  subject,  (iii)  result in the  creation or  imposition  of any
Encumbrances  on any of the assets or properties of the Company,  or (iv) 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 Company.

         Section   4.3.......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  4.4.......Ownership  of the Company's Shares.  The Shareholder
owns 100 shares of the Company's Common Stock  beneficially and of record,  free
and clear of any Encumbrances which represents all of the issued and outstanding
capital  stock  of  the  Company.   There  are  no  voting  trust  arrangements,
shareholder  agreements or other agreements (i) granting any option,  warrant or
right of first  refusal with respect to the Company  Common Stock to any Person,
(ii)  restricting  the right of the Shareholder to sell the Company Common Stock
to Purchaser and CDL, (iii)  restricting any other right of any Shareholder with
respect to the Company Common Stock or (iv) creating any penalties,  liabilities
or disabilities from a sale of the Company Common Stock. The Shareholder has the
absolute and unrestricted right, power and capacity to sell, assign and transfer
the  Company   Common  Stock  to  Purchaser  and  CDL  free  and  clear  of  any
Encumbrances.   Upon  delivery  to  Purchaser   and  CDL  of  the   certificates
representing   the  Company   Common  Stock  at  Closing  in  exchange  for  the
consideration to be paid by Purchaser and CDL at the Closing,  Purchaser and CDL
will acquire good, valid and marketable title to the Company Common Stock,  free
and clear of any Encumbrances.

         Section  4.5.......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  Purchaser in  connection  with this  Agreement  or any of the  transactions
contemplated hereby.

         Section 4.6.......Full  Disclosure.  No representation or warranty made
by  any  Shareholder  in  this  Agreement,  any  Schedule,  any  Exhibit  or any
certificate  delivered,  or to be delivered,  by or on behalf of any Shareholder
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 V

               Representations and Warranties Regarding Purchaser
                                     and CDL

         Purchaser and CDL, jointly and severally,  represent and warrant to the
Shareholder as follows:

         Section   5.1.......Organization.   Purchaser  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Florida and has full power and authority,  corporate and other,  to own or lease
its property and assets and to carry on its business as presently conducted. CDL
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power and  authority,  corporate  and
other,  to own or lease its  property and assets and to carry on its business as
presently conducted.

         Section  5.2.......Authorization.  Each of  Purchaser  and CDL has full
power and authority,  corporate and other, to execute and deliver this Agreement
and to perform its respective obligations hereunder, all of which have been duly
authorized  by all  requisite  corporate  action.  This  Agreement has been duly
authorized,  executed  and  delivered by Purchaser  and CDL,  respectively,  and
constitutes a valid and binding agreement such party,  enforceable  against such
party  in  accordance  with  its  terms,  subject  to  bankruptcy,   insolvency,
fraudulent  transfer,  reorganization,  moratorium  and similar  laws of general
applicability  relating to or affecting  creditors' rights and to general equity
principals.

         Section  5.3.......Non-contravention.  Neither  Purchaser  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   5.4.......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
Purchaser and CDL.

         Section  5.5.......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  Purchaser  or  CDL  in  connection  with  this  Agreement  or any of the
transactions contemplated hereby.

         Section 5.6.......SEC  Documents.  CDL has delivered to the Stockholder
(who represents that he, or such  Stockholder's  purchaser  representative,  has
read and  reviewed)  CDL's Form 10-K for the year ended  December 31, 1997,  its
Form 10-Q for the  quarter  ended March 31,  1998,  its Form 8-K for an event in
July 1998 and its proxy  statement for its annual  meeting held on June 17, 1998
(the "SEC Documents") and no other documents have been filed since the filing of
the Company's Form 10-Q. The SEC Documents adequately and correctly describe the
business  of CDL as at their  respective  dates,  and the  Shareholder  may rely
thereon.  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.  There  is no  fact  or  circumstance  that
Purchaser and CDL have not disclosed to the  Shareholder  that  Purchaser or CDL
presently  believe has resulted in a Material Adverse Change or could reasonably
be expected to have a Material Adverse Effect on the ability of Purchaser or CDL
to perform their obligations under this Agreement.

                                   ARTICLE VI

                            Covenants and Agreements

         Section 6.1.......Access and Information. No investigation by Purchaser
and CDL  heretofore  or  hereafter  made shall  modify or  otherwise  affect any
representations  and warranties of the Company or the  Shareholder,  which shall
survive any such investigation,  or the conditions to the respective obligations
of Purchaser and CDL to consummate the transactions contemplated hereby.

         Section 6.2.......Transfer and Other Taxes.

                  (a)......The Shareholder  represents that there are no stamp,
stock  transfer,  sales,  purchase,  use or  similar  tax  under the laws of any
Governmental  Authority of North  Carolina  arising out of or resulting from the
purchase of the Company Shares.

                  (b)......Each  party  hereto  shall (i)  prepare  and file all
income and other tax  returns  reporting  income or other  taxes due through the
Closing  Date,  (ii) be  responsible  for the  conduct  of all tax  examinations
relating to its, his of her respective tax returns referred to in (i) above, and
(iii) pay all taxes  owing with  respect to his or her  respective  tax  returns
referred to in (i) above.  The Shareholder  shall also be responsible for filing
any income tax  returns  and paying any income  taxes (to the extent  such taxes
have not been  reserved in the  Financial  Statements  of the  Company)  for the
Company  for a fiscal  year or  reporting  period  which  ends on or before  the
Closing Date.  Purchaser will provide the Shareholder and their accountants with
reasonable  access to books and records  necessary for the  preparation  of such
returns.

         Section 6.3.......Non-Competition and Confidentiality Agreement.

                  (a)......The  Shareholder  agrees that he will not, and he
will cause his respective Affiliates not to, directly or indirectly, take any of
the following actions:

                  .........(i)      engage in or compete with the provision of
products  or  services  offered  by CDL or  any of its  subsidiaries,  including
without limitation Purchaser,  anywhere in the State of North Carolina or within
250 miles of its borders (the "Territory");

                  .........(ii)     engage,  contract for or solicit,  with
respect to the  provision  of products or services  offered by CDL or any of its
subsidiaries,  (x) any  customers of CDL or any of its  subsidiaries,  including
without  limitation  Purchaser,  or (y) any  customers of the Company in the two
year (2) period preceding the Closing;

                  .........(iii)    employ,  engage,  contract  for or solicit
the services in any capacity of any Person who is employed by or an  independent
contractor  of the  Company  either  on the date  hereof  or on the date of such
solicitation; or

                  .........(iv)     use for his or her own  benefit  or,  except
as  required  by law,  divulge or convey to any third  party,  any  Confidential
Information (as hereinafter defined) relating to the Company.

                  (b)......Each of the foregoing covenants,  except the covenant
set forth in Section 6.4(a)(ii),  shall continue for a period of three (3) years
from the Closing Date; provided, however, that if Shareholder is employed by CDL
or any of its subsidiaries,  including without  limitation  Purchaser,  he shall
continue to be bound by such  covenants  for a period of two (2) years after the
date on which his  employment  ceases for any reason or no reason.  The covenant
set forth in Section  6.4(a)(ii) shall continue for a period equal to the longer
of five (5) years  from the  Closing  Date;  or two (2) years  after the date on
which such  Shareholder's  employment  ceases  for any reason or no reason.  The
Shareholder  agrees that the time periods set forth in the  preceding  sentences
shall be  computed by  excluding  from such  periods any time during  which such
Shareholder is in violation of any provision of this Section 6.3.

                  (c)......Notwithstanding  the  foregoing,  the  covenants  set
forth in this Section 6.3 shall not be deemed to prohibit the  Shareholder  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.

                  (d)......The  Shareholder  acknowledges  that the restrictions
contained  in this  Section  6.3 are  reasonable  and  necessary  to protect the
legitimate interests of Purchaser and CDL and that any breach by the Shareholder
of any provision hereof will result in irreparable  injury to Purchaser and CDL.
The Shareholder acknowledges that, in addition to all remedies available at law,
Purchaser 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 Purchaser nor CDL shall
be required to post any bond or other security in connection with any proceeding
to enforce this Section 6.4.

                  (e)......All  of the  covenants  set forth in this Section 6.3
shall be construed as an agreement  independent  of any other  provision of this
Agreement,  and the  existence  of any  claim  of the  Shareholder  against  the
Purchaser  or CDL shall not  constitute  a defense  to the  enforcement  of such
covenants.

                  (f)......For  purposes  of  this  Section  6.3,  "Confidential
Information"  consists of all information,  knowledge or data relating to either
of the Company  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 such Company 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 neither the Shareholder  nor his Affiliates,  directly or indirectly,
cause such information to enter the public domain.

         Section   6.4.......Guarantees.   The   Purchaser   will   relieve  the
Shareholder and his spouse of personal guarantee or co-maker obligations for any
bank  indebtedness  or finance  leasing  obligations  of the  Company  listed on
Schedule 6.4 within 90 days of the date hereof.

         Section  6.5.......Operations  of the Company in Cary,  North Carolina.
The Leased Real Property in Cary, North Carolina is owned by the Shareholder and
his wife.  The  Shareholder  and the Purchaser  will negotiate a lease within 60
days have  Closing  permitting  the  Company to  continue  to use such  facility
containing the following  material  terms: 5 year lease term,  $14.50 per square
foot triple net and 6,000 square feet. The  Shareholder  also owns property used
by the Company in Charlotte,  North Carolina.  The Shareholder and the Purchaser
will negotiate a mutually  acceptable  lease for such premises within 60 days of
closing at no higher than a fair market rental.

         Section 6.6.......Audited  Financial Statements of the Company; SEC and
Other Governmental Disclosure and Reporting Requirements.  All fees and expenses
incurred  in  connection  with any  audits of the  financial  statements  of the
Company,  including without  limitation the audited financial  statements of the
Company  for  the  twelve  months  ended  March  31,  1998,  shall  be the  sole
responsibility of the Shareholder.

         Section 6.7.......Certain Reporting Requirements.  Unless and until all
of the  shares  which are or could be issued  under the Notes  (the  "Underlying
Shares")  are sold or eligible  for sale under Rule 144(k) of the SEC,  CDL will
remain current in filing all reports with the SEC necessary to allow transfer of
the Underlying Shares if otherwise eligible for sale under Rule 144.

         Section  6.8.......Conduct  of  Business.  Until  July  31,  1999,  the
Purchaser will not make any material changes in the operation of the Seller from
the manner it is currently being operated without the consent of the Shareholder
(which  consent  shall not be  unreasonably  withheld or delayed) if such change
would have a material adverse effect on the KBD EBIT, as defined on the One Year
Note;  provided  however  that the  foregoing  shall  not  impair  CDL's and the
Purchaser's right to manage its subsidiary except as expressly stated herein.


         Section  6.9.......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 Shareholder,  Purchaser
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 Shareholder
shall use their  respective  reasonable best efforts to assist Purchaser and CDL
in connection  with the  fulfillment of any SEC  disclosure,  reporting or other
governmental  compliance  obligation  of Purchaser  and CDL,  including  without
limitation  providing Purchaser and CDL with any financial and other information
requested by Purchaser  and CDL. In the event that at any time after Closing any
further action is necessary to carry out the purposes of this Agreement, each of
the Company, the Shareholder, Purchaser and CDL agree shall take all such action
as may be required without any further consideration therefor.

         Section  6.10......Reservation  of Underlying  Shares.  The  authorized
capital stock of CDL is 30,000,000  shares of common stock and 2,000,000  shares
of  preferred  stock.  Until  such time as the Notes  are no longer  subject  to
conversion  into shares of common  stock of CDL,  as provided by the Notes,  CDL
agrees to take such action as is necessary to ensure that an adequate  number of
shares of CDL are authorized, unissued and reserved for issuance upon conversion
of the Notes  (including,  if necessary,  increasing  the  authorized  number of
shares of common stock).  CDL represents and warrants that as of the date hereof
sufficient  shares of  authorized  CDL common stock exist and have been reserved
for issuance upon conversion of the entire  principal amount of the Notes at the
initial conversion price.

                                   ARTICLE VII

                               Closing Deliveries

         Section 7.1.......Mutual  Condition. 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 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.

         Section  7.2.......Deliveries  by the Company and the Shareholder.  The
obligations of Purchaser 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) (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  Shareholder  and the  consummation by the
Company and the Shareholder of the transactions  contemplated  hereby shall have
been  obtained  and shall be in full force and effect;  (ii) the Company and the
Shareholder 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 such Company is party or for the continuation of any
agreement  to which  such  Company  is a party;  and (iii)  all  authorizations,
consents,  waivers,  approvals or other actions necessary to permit Purchaser to
own the Company  Shares shall have been  obtained and shall be in full force and
effect.  By Closing,  the  Shareholder  shall be deemed to have  represented and
warranted that such conditions have been fulfilled.

         (b)  Prior  to or at  the  Closing,  (i)  the  Shareholder  shall  have
delivered to the Company,  as  applicable,  for  cancellation  the  certificates
representing the Company Common Stock, (ii) the Company shall have canceled such
certificates,  and  (iii)  the  Company  shall  have  issued  to  Purchaser  new
certificates  representing  the Company  Common Stock  registered in the name of
Purchaser or as otherwise directed by it.

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

                  (i) 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  Purchaser  and CDL may
         reasonably request;

                  (ii) a certified copy of (1) the Certificate 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;

                  (iii) The Shareholder shall enter into an employment agreement
         (the "Employment  Agreement") with Purchaser,  which agreement shall be
         in substantially the same form as attached Exhibit D;

                  (iv)     documents  evidencing the Cary, North Carolina Lease
         and any required  landlord consents
         to the Company's other real estate leases;

                  (v) an opinion  of Howard,  Stallings,  Story,  Wyche,  From &
         Hutson,  P.A.,  counsel to the Company and the  Shareholder,  dated the
         Closing Date, and substantially in the form attached as Exhibit E; and

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

         (d) Prior to or at the Closing, (i) the Company shall have received the
written  resignation  of all  directors  and  officers  of each of the  Company,
effective as of the Closing,  (ii) the Company, or the Shareholder,  as the sole
stockholders of the Company,  shall have taken all action  necessary to elect as
successor  directors  and  officers  effective as of the Closing such persons as
shall be directed by Purchaser  and CDL, and (iii)  Purchaser and CDL shall have
received  evidence  satisfactory  to it in  its  sole  discretion  of all of the
foregoing.

         Section  7.3.......Deliveries by CDL and Purchaser.  The obligations of
the  Shareholder 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) Prior to or at the Closing,  Purchaser and CDL shall have delivered
to the Shareholder  such closing  documents as shall be reasonably  requested by
the  Shareholder  in form and  substance  reasonably  acceptable to its counsel,
including the following:

                  (i) a certificate  of the Secretary or Assistant  Secretary of
         each of Purchaser 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  Shareholder  may
         reasonably request;

                  (ii) a  certified  copy of the  resolutions  of the  Board  of
         Directors  of  Purchaser   authorizing  the  execution,   delivery  and
         consummation of this Agreement and the transactions contemplated hereby
         and thereby;

                  (iii)    the Shareholder shall have executed the Employment
         Agreement;

                  (iv)     an opinion of Lowenstein  Sandler PC,  counsel to
         Purchaser  and CDL,  dated  the  Closing  Date,  and  substantially
         in the form attached as Exhibit F;

                  (v)      payment of the Cash Portion Purchase Price, as set
         forth in Section 2.2;

                  (vi)     delivery of the One Year Note and the Five Year Note;
         and

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


                      ARTICLE VIII - Intentionally Omitted



                                   ARTICLE IX

           Survival of Representations and Warranties; Indemnification

         Section 9.1.......Survival of Representations and Warranties. Except as
set  forth  below,  the  representations  and  warranties  provided  for in this
Agreement  shall  survive the Closing for three (3) 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  3.13 and 3.15 shall
survive  the Closing and remain in full force and effect for the greater of five
(5) years or the applicable statute of limitations  periods. The survival period
of  each  representation  or  warranty  as  provided  in  this  Section  9.1  is
hereinafter referred to as the "Survival Period."

         Section 9.2.......Indemnification.

         (a) The Shareholder shall indemnify and hold harmless  Purchaser,  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 the  Shareholder  or the
Company in this Agreement for the applicable Survival Period, or (ii) the breach
by  Shareholder  or the Company of any  covenant or agreement to be performed by
him or it  hereunder  or (iii)  any tax or  other  material  liabilities  of the
Company for periods  prior to the Closing Date which were not accrued for on the
June 30, 1998 balance sheet delivered pursuant to Section 3.8.

         (b)  CDL  and   Purchaser   shall   indemnify  and  hold  harmless  the
Shareholder,  his Affiliates, and any Person claiming by or through him, against
and in respect of any and all Damages arising out of, resulting from or incurred
in  connection  with (i) any material  inaccuracy in any  representation  or the
breach  of any  warranty  made by  Purchaser  or CDL in this  Agreement  for the
applicable  Survival Period,  or (ii) the material breach by Purchaser or CDL of
any  covenant or agreement to be performed by it hereunder or (iii) any material
liability  of the  Shareholder  under  a  personal  guarantee  of the  Company's
business obligations.

         (c) Any Person providing  indemnification pursuant to the provisions of
this Section 9.2 is hereinafter  referred to as an "Indemnifying  Party" and any
Person entitled to be indemnified pursuant to the provisions of this Section 9.2
is hereinafter referred to as an "Indemnified Party."

         Section 9.3.......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 (in which case the Indemnified  Party may defend against such
injunctive or equitable relief without  affecting its claim for  indemnification
hereunder),  or (ii) the Indemnified Party shall have reasonably  concluded that
the Indemnified Party has one or more defenses not available to the Indemnifying
Party  (in  which  case the  Indemnified  Party  shall  nonetheless  permit  the
Indemnifying  Party  to  have  meaningful   participation  in  the  litigation).
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  9.4.......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.  In the  event  that  the
Indemnified Party is required to institute legal proceedings in order to recover
Damages   hereunder,   the  cost  of  such   proceedings   (including  costs  of
investigation and reasonable  attorneys' fees and disbursements)  shall be added
to the amount of Damages payable to the Indemnified Party.

         Section 9.5.......Right of Set-Off.  Subject to Section 9.6, Purchaser,
the Company and CDL shall have the right to  set-off,  against any amount  which
may be owed by the Company,  Purchaser and/or CDL to the Shareholder  (including
but not limited to amounts  due under the Notes) any amount  owed to  Purchaser,
and/or the Company by the  Shareholder  pursuant to this Agreement or otherwise.
This Section 9.5 shall not be construed  so as to afford  Purchaser  and CDL any
rights of set-off  with  respect to the One Year Note except as provided in such
Note.

         Section   9.6.......Limits  on  Indemnification.   Notwithstanding  the
foregoing,  no claim for  indemnification or setoff shall be made hereunder with
respect to the first $50,000 of losses suffered by either CDL,  Purchaser or the
Company on the one hand, or the  Shareholder,  on the other. No right of set-off
may be  exercised  or  allowed  with  respect  to a Note  once the Note has been
converted into Common Stock.


                                    ARTICLE X

                                  Miscellaneous

         Section 10.1......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 the Purchaser or CDL:                 380 Allwood Road
                                            Clifton, New Jersey 07021
                                            Telephone: (973) 471-1005
                                            Facsimile: (973) 471-5519
                           Attention: Mark Carlesimo, General Counsel

With a copy to:   Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, New Jersey 07068
                                            Telephone: (973) 992-8700
                                            Facsimile: (973) 992-5820
                                      Attention: Alan Wovsaniker, Esq.

If to the Shareholder:                      Mr. David Chesney
                                            1605 Dunblane Court
                                            Cary, North Carolina 37511
                                            Telephone: 919-362-9826

With a copy to:   Howard, Stallings, Story, Wyche, From & Huston, P.A.
                                            P.O. Box 12347
                                            4000 West Chase Boulevard
                                            Suite 400
                                            Raleigh, North Carolina 27605
                                            Telephone:  (919) 821-7700
                                            Facsimile:   (919) 821-7703
                                            Attention:  E. Cader Howard, Esq.

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

         Section 10.2.     Expenses.  Regardless  of whether the  transactions 
provided for in this Agreement are consummated,  each party hereto shall pay its
own  expenses  incident  to this  Agreement  and the  transactions  contemplated
herein.

         Section 10.3.  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 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  10.4.  Assignment;  Successors  and  Assigns;  No Third  Party
Rights. Except as otherwise provided herein (or in the Note), this Agreement may
not be assigned by operation of law or otherwise,  and any attempted  assignment
shall be null and void.  Purchaser  and CDL may assign  all of their  respective
rights under this  Agreement to any Affiliate;  provided such Affiliate  assumes
all of the  obligations of the  respective  obligations of the Purchaser and CDL
hereunder  and CDL and  Purchaser  remain  liable  on all of  their  obligations
hereunder.  This Agreement shall be binding upon and inure to the benefit of the
parties  hereto  and  their  respective  heirs,  successors,  assigns  and legal
representatives.  This Agreement shall be for the sole benefit of the parties to
this  Agreement  and  their  respective  heirs,  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  heirs,  successors,  assigns
and  legal  representatives,  any  legal or  equitable  right,  remedy  or claim
hereunder.

         Section 10.5.     Counterparts.  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.

         Section 10.6.     Titles and  Headings;  Schedules.  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 10.7. 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 10.8.     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  10.9.  Public  Announcement.  Except  with  respect to filings
required  by the  SEC to be  made  Purchaser  and  CDL  and as may be  otherwise
required by law, the Company and the Shareholder, on the one hand, and Purchaser
and CDL,  on the other  hand,  shall not 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 10.10. 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 10.11. 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  10.12.  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.

                                       KBD SERVICES, INC.

                                       By:_/s/ David L. Chesney
                                       Name:David L. Chesney
                                       Title:   President


                                       /s/ David L. Chesney
                                       David L. Chesney

                                       SILVER STAR EXPRESS, INC.

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

                                       CONSOLIDATED DELIVERY & LOGISTICS, Inc.
 
                                       By:  /s/ Albert W. Van Ness, Jr.
                                       Name:  Albert W. Van Ness, Jr.
                                       Title:  Chairman



<PAGE>


                                                  -iii-
                                            TABLE OF CONTENTS

                                     Article I - Certain Definitions

Section 1.1.        Certain Definitions.....................................1
Section 1.2.        Interpretation..........................................4

                      Article II - Purchase and Sale of Stock; Additional
                                           Covenants

Section 2.1.        Purchase and Sale of Stock..............................4
Section 2.2.        Purchase Price..........................................4
Section 2.3.        Balance Sheet Adjustment; Retained Liabilities..........5
Section 2.4.        Closing.................................................5

                    Article III - Representations and Warranties Regarding the
                                         Company

Section 3.1.        Organization and Qualification of the Company...........6
Section 3.2.        Authorization...........................................6
Section 3.3.        Non-contravention.......................................6
Section 3.4.        No Consents.............................................6
Section 3.5.        Capitalization..........................................7
Section 3.6.        Personal Property.......................................7
Section 3.7.        Leased Real Property....................................7
Section 3.8.        Financial Statements.......................... .........7
Section 3.9.        Absence of Certain Developments.........................7
Section 3.10.       Governmental Authorizations; Licenses; Etc..............8
Section 3.11.       Litigation..............................................9
Section 3.12.       Undisclosed Liabilities.................................9
Section 3.13.       Taxes...................................................9
Section 3.14.       Insurance...............................................9
Section 3.15.       Environmental Matters...................................9
Section 3.16.       Employee Matters.......................................10
Section 3.17.       Employee Benefit Plans.................................11
Section 3.18.       Proprietary Rights.....................................11
Section 3.19.       Accounts Receivable ...................................12
Section 3.20.       Contracts..............................................12
Section 3.21.       Customers and Suppliers................................13
Section 3.22.       Books and Records......................................13
Section 3.23        Net Worth of the Company...............................14
Section 3.24.       Brokers................................................14
Section 3.25.       Full Disclosure........................................14



<PAGE>


                  Article IV - Representations and Warranties Regarding the
                                          Shareholder

Section 4.1.        Authorization..........................................14
Section 4.2.        Non-contravention......................................14
Section 4.3.        No Consents............................................15
Section 4.4.        Ownership of the Company's Shares.............   ......15
Section 4.5.        Brokers................................................15
Section 4.6.        Full Disclosure........................................15

                  Article V - Representations and Warranties Regarding Purchaser
                                      and CDL

Section 5.1.        Organization...........................................15
Section 5.2.        Authorization.................................... .....16
Section 5.3.        Non-contravention......................................16
Section 5.4.        No Consents............................................16
Section 5.5.        Brokers................................................16
Section 5.6         SEC Documents..................................... ....16

                                  Article VI - Covenants and Agreements

Section 6.1.        Access and Information.................................16
Section 6.2.        Transfer and Other Taxes...............................17
Section 6.3.        Non-Competition and Confidentiality Agreement.  .......17
Section 6.4.        Guarantees.............................................18
Section 6.5.        Operations of the Company in Cary, North Carolina......18
Section 6.6.        Audited Financial Statements; SEC Disclosure...........19
Section 6.7.        Certain Reporting Requirements.........................19
Section 6.8.        Conduct of Business....................................19
Section 6.9.        Best Efforts; Further Assurances.......................19
Section 6.10.       Reservation of Underlying Shares.......................19

                                     Article VII - Closing Deliveries

Section 7.1.        Mutual Condition.......................................20
Section 7.2.        Deliveries by the Company and the Shareholder..........20
Section 7.3.        Deliveries by CDL and Purchaser........................21

                                   Article VIII - Intentionally Omitted

                 Article IX - Survival of Representations and Warranties;
                                        Indemnification

Section 9.1.        Survival of Representations and Warranties.............22
Section 9.2.        Indemnification........................................22
Section 9.3.        Procedures for Third Party Claims......................23
Section 9.4.        Procedures for Inter-Party Claims.................. ...23
Section 9.5.        Right of Set-Off.......................................24
Section 9.6.        Limits on Indemnification..............................24

                                        Article X - Miscellaneous

Section 10.1.       Notices................................................24
Section 10.2.       Expenses...............................................25
Section 10.3.       Governing Law; Consent to Jurisdiction.................25
Section 10.4.       Assignment; Successors and Assigns; No Third Party
                       Rights..............................................26
Section 10.5.       Counterparts...........................................26
Section 10.6.       Titles and Headings; Schedules.........................26
Section 10.7.       Entire Agreement.......................................26
Section 10.8.       Amendment and Modification........................ ....26
Section 10.9.       Public Announcement....................................26
Section 10.10.     Waiver..................................................26
Section 10.11.     Severability............................................27
Section 10.12.     No Strict Construction..................................27

                                                Schedules

Schedule 3.1        Foreign Qualifications of the Company
Schedule 3.4        Consents
Schedule 3.6        Encumbrances
Schedule 3.7        Leased Real Property
Schedule 3.9        Certain Developments
Schedule 3.11       Litigation
Schedule 3.13       Tax Contests
Schedule 3.14       Insurance
Schedule 3.15       Environmental Matters
Schedule 3.16       Employee Matters
Schedule 3.17       Employee Benefit Plans
Schedule 3.18       Proprietary Rights
Schedule 3.19       Accounts Receivable
Schedule 3.20       Contracts
Schedule 3.21       Customers and Suppliers
Schedule 6.4        Personal Guarantees

                                                 Exhibits

Exhibit A           Form of Five Year Note
Exhibit B           Form of One Year Note
Exhibit C           Form of Employment Agreement
Exhibit D           Form of Opinion of Counsel to the Company and the
                      Shareholder
Exhibit E           Form of Opinion of Counsel to Purchaser and CDL



<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.

                  TRANSFER IS ALSO RESTRICTED BY SECTION 6.04.

                                    7% SUBORDINATED CONVERTIBLE NOTE DUE 2003
                                     OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:    David L. Chesney
                                                           August 5, 1998

Address:              P.O. Box 1334                               No. N-1
                      Cary, NC  27512

Principal Amount:     $1,460,000                     Clifton,  New Jersey

Due:                  August 5, 2003

                  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"),  or his  registered
assign(s),  the principal sum above stated on August 5, 2003 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 October 1, 1998.

                  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 its conversion rights.


                                   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 any bank,  trust company,  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 of the
foregoing by 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 any other bank for working
capital, acquisition financing, capital improvements or the like).

                                    (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
                  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 (as
defined  herein) to cash,  securities  or other  property  otherwise  payable or
deliverable to the Holder of this Note.

                  In furtherance of this  Subordination  the Holder(s)  agree 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 its option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

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

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment of principal or interest on this Note or any other
                  Note issued by the Company to the Holder 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; or

                                    (e) the  holder  of any  Senior  Debt  shall
                  accelerate  payment of such Senior Debt  following an event of
                  default under such Senior Debt.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to its
rights and remedies under this Note, and any other  instruments,  the Holder may
at its option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  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 its rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.


                                  ARTICLE THREE

                         CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert 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 Six Dollars
and 00/100  ($6.00).  The right to convert may be exercised by the Holder at any
time after the date hereof up to and including, July 1, 2003, except as provided
herein.  The  number  of  shares of Common  Stock  into  which  this Note may be
converted shall be determined by taking (a) the sum of (1) the principal  amount
of this Note,  namely  $1,460,000,  and (2) any interest due and unpaid from the
date of  issue  to the  date  of  purchase,  and  dividing  said  sum 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
(a) the entire  amount due on the Note at the exercise  date less  $200,000 from
the date hereof  through July 1, 2003 and (b) the entire  amount due on the Note
at the exercise date if the exercise date is after July 1, 2003.  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 right to convert may be exercised  notwithstanding any limitation
on  the   Holder's   ability   to   receive   payments   pursuant   to   Article
One-Subordination.

                  The  Company  also shall  have the right to convert  this Note
into fully paid and non-assessable  shares of Common Stock at any time after the
Trigger Date at the Conversion  Price per share,  in accordance with the formula
provided above. The Company may convert all or any part of the amount due on the
Note.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first  business  day after the date on which the  average of the  closing  sales
prices as reported by the National  Association of Securities  Dealers over a 30
consecutive  trading  day  period  (which 30 day  period  begins  after the date
hereof)  equals or exceeds the Conversion  Price.  "Trading day" is defined as a
day on which trades may be made on the Nasdaq National Market.

                  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 this Note  shall not be  registered
                  in  the  name  of  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  after the Company
sends Holder its notice of exercise of the conversion privilege.

                  (b) Certificates  for the underlying  shares acquired 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).

                  (c)      If the Note is  converted in part prior to July 1,
2003, the Company shall so note in its records.

                  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  persons  to whom the  Note is  registered,  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 whole
or partial 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
registered  Holder(s)  thereof 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
initial  indebtedness  represented  hereby that number of shares of common stock
which he would have held had the entire 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  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  it
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,  except as set
forth in Article Five hereof.

                  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 it 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 its 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.

                  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."

                  Except as set forth in the Stock Purchase Agreement dated this
date (including the "SEC Documents" referred to therein),  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 that set
forth in the Stock Purchase Agreement, including the SEC Documents.


                                  ARTICLE FIVE

                               REGISTRATION RIGHTS

                  The Company  agrees to file a  registration  statement on Form
S-3 with  the  Securities  and  Exchange  Commission  ("Commission")  under  the
Securities  Act  covering the shares of Common Stock into which this Note may be
converted (i.e.,  the Underlying  Shares) within ninety (90) days after the date
hereof; and use its best efforts to cause such registration  statement to become
effective  as soon as  possible  thereafter  and to remain  effective  until the
Underlying  Shares  are  disposed  of by the  Shareholder  or,  if the  Note  is
satisfied without conversion of any part of it into Underlying Shares, until the
date of such  satisfaction.  The Company agrees to provide an opinion of counsel
to  each  broker  or  underwriter  effecting  a sale  of the  Underlying  Shares
confirming that the sale of such  Underlying  Shares may be made pursuant to the
registration statement.  The Company also agrees to comply, at its expense, with
any prospectus  delivery  requirements  applicable to the sale of the Underlying
Shares  pursuant  to  the  registration  statement.  The  Company  shall  not be
obligated to cause to become effective more than one registration statement with
respect to the Underlying Shares.

                  At any time and from time to time,  the Holder agrees  without
further  consideration,  to take such  actions and to execute  and deliver  such
documents as may be  reasonably  requested by the Company in order to effectuate
the purposes of this  Article  Five  including,  without  limitation,  supplying
information  with  respect to the Holder that may be  necessary  or required for
inclusion in the registration  statement.  In the event that such information or
other material  requested by the Company is not provided to the Company within a
reasonable  period of time following  delivery of written notice requesting such
information,  then the  Company's  obligations  under this Article Five shall be
suspended as to such Holder.

                  The Company will take such other actions reasonably  requested
by the  Holder  and  any  underwriter  it  engages  to  affect  the  sale of the
Underlying  Shares so as to comply with state  securities laws applicable to the
sale of the Underlying Shares pursuant to the registration statement.

                  The Company will pay all expenses  incurred in complying  with
Article Five hereof, including,  without limitation, all registration and filing
fees (including all expenses incident to filing with the National Association of
Securities Dealers,  Inc.),  reasonable fees and disbursements of counsel to the
Company,  securities  law and  blue sky fees and  expenses  (except  where  such
payment  is  prohibited  by  law or  applicable  regulation).  All  underwriting
discounts  and selling  commissions  applicable  to the sales of the  Underlying
Shares and any state or federal transfer taxes payable with respect to the sales
of the  Underlying  Shares and all fees and  disbursements  of  counsel  for the
Holder,  if any, in each case arising in  connection  with  registration  of the
Underlying Shares under Article Five hereof, shall be payable by the Holder.

                  If the  conversion  of the Note is made  pursuant  to a notice
that  stipulates  that it is to be effected in connection  with an  underwritten
offering of the  Underlying  Shares  registered  pursuant to this  Article,  the
conversion  notice (or Exercise  Agreement) may be conditioned  upon the closing
with the underwriter for the sale of the Underlying  Securities pursuant to such
offering to the extent  permitted by the SEC and applicable  securities laws, in
which case the Holder shall not be deemed to have  converted any portion of such
Note until  immediately  prior to the closing of the sale of  securities  upon a
firm commitment to buy.

                  The Company agrees to indemnify the  Shareholder  and hold him
harmless  from any loss,  claim or  liability  of any nature  arising out of any
allegation or finding of an untrue  statement of material fact  contained in the
registration  statement  (including  for  the  purpose  of  this  agreement  any
prospectus and all documents incorporated by reference), or of the omission of a
material fact required to be stated in the  registration  statement or necessary
to make the  statements  therein,  in the  light in which  they were  made,  not
misleading.  This indemnity  shall not apply to any loss,  claim or liability to
the  extent  arising  from  the  information  furnished  to the  Company  by the
Shareholder for use in the registration statement, or any misrepresentation made
by the  Shareholder  for which the Company  would not  otherwise  be required to
indemnify  the  Shareholder  under this  paragraph.  The  Shareholder  agrees to
indemnify the Company for any loss, claim or liability of any nature arising out
of any  allegation or finding of an untrue  statement of material fact contained
in  the  registration  statement  which  was  provided  to  the  Company  by the
Shareholder in writing.

                                   ARTICLE SIX

                                  MISCELLANEOUS

                  6.01  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.

                  6.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by federal express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Holder, at the address set forth on the first page hereof, or,

If to the Company:

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

                  6.03  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.

                  6.04  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
its successors and assigns.  Except as expressly permitted herein, this Note may
not be transferred or assigned prior to July 2, 2003. This is the Five Year Note
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder and others, the terms of which are incorporated herein, including the
rights of offset of the Company and its Silver Star Express subsidiary.

                  6.05  Governing  Law.  This Note has been  executed in and
shall be governed by the laws of the State of New Jersey.

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

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

                               CONSOLIDATED DELIVERY & LOGISTICS, INC.



                               By: /s/ Albert W. Van Ness, Jr.
                                  Albert W. Van Ness, Jr., Chairman



<PAGE>
Exhibit 10.3

                  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.

                  TRANSFER IS ALSO RESTRICTED BY SECTION 6.04.

                  7% CONTINGENT SUBORDINATED CONVERTIBLE NOTE DUE 1999
                     OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:    David L. Chesney
                                                                August 5, 1998

Address:              P.O. Box 1334                                   No. CN-1
                      Cary, NC  27512

Principal Amount:     Up to $500,000                      Clifton,  New Jersey

Due:                  November 1, 1999

                  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"),  or his  registered
assign(s),  the  principal  sum  above  stated  on  November  1, 1999 and to pay
interest on the finally-determined  principal amount hereof at the rate of seven
(7%)  percent per annum from the date  hereof.  All amounts  due  hereunder  are
subject to reduction  pursuant to Section 2.3(c) of the Stock Purchase Agreement
described in Section 6.04, which  provisions are  incorporated  herein as if set
forth in full,  and  Article  Three  below.  Interest  shall be  computed on the
principal  amount  hereof,  as it may be reduced from time to time,  and payable
upon maturity.

                  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  "Testing  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 its conversion rights.


                                   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 any bank,  trust company,  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 of the
foregoing by 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 debtor or financing from time to time
arranged by First  Union  Commercial  Corporation  or any other bank for working
capital, acquisition financing, capital improvements or the like).

                                    (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
                  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 (as
defined  herein) to cash,  securities  or other  property  otherwise  payable or
deliverable to the Holder of this Note.

                  In furtherance of this  Subordination  the Holder(s)  agree 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 its option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

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

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or interest on this Note or on any
                  other  Note  issued  by the  Company  to the  Holder  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; or

                                    (e) the  holder  of any  Senior  Debt  shall
                  accelerate  payment of such Senior Debt  following an event of
                  default under such Senior Debt.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to its
rights and remedies under this Note, and any other  instruments,  the Holder may
at its option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder to be due and payable  together with interest accrued thereon,
whereupon the same shall  forthwith  mature and become due and payable,  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  accrue on the amounts due  hereunder  at a rate of nine percent
(9%) per annum.

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


                                  ARTICLE THREE

                                  FORGIVENESS/
                         CONVERSION PRIVILEGE/OBLIGATION

                  A. Forgiveness or Reduction.  On or before the date forty-five
(45)  days  after  the end of the  one-year  period  ending  July 31,  1999 (the
"Measurement Period"), CDL shall determine: (A) the net earnings before interest
and taxes,  computed in accordance with generally accepted accounting principles
consistently applied ("EBIT") of KBD Services,  Inc., its subsidiary ("KBD") for
the Measurement  Period. If (x) the EBIT of KBD for the Measurement Period ("KBD
EBIT") does not exceed $200,000,  then this Contingent Convertible Note shall be
forgiven,  the principal amount automatically  reduced to zero as of the date of
issuance of this Note, and this Note shall be discharged in full and canceled.

                  If the KBD EBIT exceeds  $200,000 but does not equal or exceed
$700,000 (the "Benchmark") for the Measurement Period, then the principal amount
of this Note shall be reduced by an amount  equal to $700,000  less the KBD EBIT
for the Measurement  Period. By way of example,  if the KBD EBIT is $500,000 for
the Measurement  Period, then the principal amount of this Note shall be reduced
by $200,000, to a $300,000 principal amount.

                  CDL shall cause the books and records of KBD to be  maintained
as a separate profit center during the Measurement Period, so that the reduction
amount,  if any, can be  determined.  All  determinations  by CDL's  independent
public accountants hereunder shall be final and binding absent manifest error.

                  B. Conversion. The Company hereby grants to the Holder of this
Contingent  Convertible  Note the right to convert 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,  subject to the following
paragraphs. The "Conversion Price" is defined as Six Dollars and 00/100 ($6.00).

                  The right to  convert  may be  exercised  by the Holder at any
time after September 16, 1999 (the "Testing Date") up to and including,  October
20, 1999,  except as provided herein.  The number of shares of Common Stock into
which this Note may be converted  shall be  determined  by taking (a) the sum of
(1) the principal amount of this Note, as adjusted, and (2) any interest due and
unpaid from the date of issue to the date of  conversion,  and dividing said sum
by (b) the  Conversion  Price.  The right to convert may only be exercised  with
respect  to the  entire  amount  due on the Note (as it may  have  been  reduced
pursuant to Article  III(A) above) 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
right to convert may be exercised notwithstanding any limitation on the Holder's
ability to receive payments pursuant to Article One-Subordination.

                  The  Company  also shall  have the right to convert  this Note
into fully paid and non-assessable  shares of Common Stock at any time after the
later of the Trigger  Date and the Testing  Date,  at the  Conversion  Price per
share, in accordance with the formula  provided above. The Company also may only
convert with respect to the entire amount set forth above.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first  business  day after the date on which the  average of the  closing  sales
prices as reported by the National  Association of Securities  Dealers over a 30
consecutive  trading  day  period  (which 30 day  period  begins  after the date
hereof)  equals or exceeds the Conversion  Price.  "Trading day" is defined as a
day on which trades may be made on the Nasdaq National  Market.  All capitalized
terms used but not defined herein shall have the meanings set forth in the Stock
Purchase Agreement.

                  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 this Note  shall not be  registered
                  in  the  name  of  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  after the Company
sends Holder its notice of exercise of the conversion privilege.

                  (b) Certificates  for the underlying  shares acquired 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  persons  to whom the  Note is  registered,  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 whole
or partial 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
registered  Holder(s)  thereof 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
initial  indebtedness  represented  hereby that number of shares of common stock
which he would have held had the entire 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  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  it
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,  except as set
forth in Article Five hereof.

                  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 it 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 its 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.

                  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."

                  Except as set forth in the Stock Purchase Agreement dated this
date (including the "SEC Documents" referred to therein),  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 that set
forth in the Stock Purchase Agreement, including the SEC Documents.


                                  ARTICLE FIVE

                               REGISTRATION RIGHTS

                  The Company  agrees to file a  registration  statement on Form
S-3 with  the  Securities  and  Exchange  Commission  ("Commission")  under  the
Securities  Act  covering the shares of Common Stock into which this Note may be
converted (i.e.,  the Underlying  Shares) within ninety (90) days after the date
hereof; and use its best efforts to cause such registration  statement to become
effective  as soon as  possible  thereafter  and to remain  effective  until the
Underlying  Shares  are  disposed  of by the  Shareholder  or,  if the  Note  is
satisfied without conversion of any part of it into Underlying Shares, until the
date of such  satisfaction.  The Company agrees to provide an opinion of counsel
to  each  broker  or  underwriter  effecting  a sale  of the  Underlying  Shares
confirming that the sale of such  Underlying  Shares may be made pursuant to the
registration statement.  The Company also agrees to comply, at its expense, with
any prospectus  delivery  requirements  applicable to the sale of the Underlying
Shares  pursuant  to  the  registration  statement.  The  Company  shall  not be
obligated to cause to become effective more than one registration statement with
respect to the Underlying Shares.

                  At any time and from time to time,  the Holder agrees  without
further  consideration,  to take such  actions and to execute  and deliver  such
documents as may be  reasonably  requested by the Company in order to effectuate
the purposes of this  Article  Five  including,  without  limitation,  supplying
information  with  respect to the Holder that may be  necessary  or required for
inclusion in the registration  statement.  In the event that such information or
other material  requested by the Company is not provided to the Company within a
reasonable  period of time following  delivery of written notice requesting such
information,  then the  Company's  obligations  under this Article Five shall be
suspended as to such Holder.

                  The Company will take such other actions reasonably  requested
by the  Holder  and  any  underwriter  it  engages  to  affect  the  sale of the
Underlying  Shares so as to comply with state  securities laws applicable to the
sale of the Underlying Shares pursuant to the registration statement.

                  The Company will pay all expenses  incurred in complying  with
Article Five hereof, including,  without limitation, all registration and filing
fees (including all expenses incident to filing with the National Association of
Securities Dealers,  Inc.),  reasonable fees and disbursements of counsel to the
Company,  securities  law and  blue sky fees and  expenses  (except  where  such
payment  is  prohibited  by  law or  applicable  regulation).  All  underwriting
discounts  and selling  commissions  applicable  to the sales of the  Underlying
Shares and any state or federal transfer taxes payable with respect to the sales
of the  Underlying  Shares and all fees and  disbursements  of  counsel  for the
Holder,  if any, in each case arising in  connection  with  registration  of the
Underlying Shares under Article Five hereof, shall be payable by the Holder.

                  If the  conversion  of the Note is made  pursuant  to a notice
that  stipulates  that it is to be effected in connection  with an  underwritten
offering of the  Underlying  Shares  registered  pursuant to this  Article,  the
conversion  notice (or Exercise  Agreement) may be conditioned  upon the closing
with the underwriter for the sale of the Underlying  Securities pursuant to such
offering to the extent  permitted by the SEC and applicable  securities laws, in
which case the Holder shall not be deemed to have  converted  any portion of the
Note until  immediately  prior to the closing of the sale of  securities  upon a
firm commitment to buy.

                  The Company agrees to indemnify the  Shareholder  and hold him
harmless  from any loss,  claim or  liability  of any nature  arising out of any
allegation or finding of an untrue  statement of material fact  contained in the
registration  statement  (including  for  the  purpose  of  this  agreement  any
prospectus and all documents incorporated by reference), or of the omission of a
material fact required to be stated in the  registration  statement or necessary
to make the  statements  therein,  in the  light in which  they were  made,  not
misleading.  This indemnity  shall not apply to any loss,  claim or liability to
the  extent  arising  from  the  information  furnished  to the  Company  by the
Shareholder for use in the registration statement, or any misrepresentation made
by the  Shareholder  for which the Company  would not  otherwise  be required to
indemnify  the  Shareholder  under this  paragraph.  The  Shareholder  agrees to
indemnify the Company for any loss, claim or liability of any nature arising out
of any  allegation or finding of an untrue  statement of material fact contained
in  the  registration  statement  which  was  provided  to  the  Company  by the
Shareholder in writing.

                                   ARTICLE SIX

                                  MISCELLANEOUS

                  6.01  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.

                  6.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by federal express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Holder, at the address set forth on the first page hereof, or,

If to the Company:

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

                  6.03  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.

                  6.04  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
its successors and assigns.  Except as expressly permitted herein, this Note may
not be transferred  or assigned prior to October 21, 1999.  This is the One Year
Note issued  pursuant to a Stock  Purchase  Agreement  dated this date among the
Company,  the Holder and  others,  the terms of which are  incorporated  herein,
including  the  rights of offset of the  Company  and its  Silver  Star  Express
subsidiary.

                  6.05  Governing  Law.  This Note has been  executed in and
shall be governed by the laws of the State of New Jersey.

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

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

                              CONSOLIDATED DELIVERY & LOGISTICS, INC.



                              By: /s/ Albert W. Van Ness, Jr.
                                  Albert W. Van Ness, Jr., Chairman
<PAGE>
Exhibit 99.1

FOR IMMEDIATE RELEASE,
CONTACT:
                                                                Desmond Towey
Mark Carlesimo, General Counsel                         Bernadette McLaughlin
Consolidated Delivery & Logistics, Inc.            Desmond Towey & Associates
TEL  (973) 471-1005                                       TEL  (212) 888-7600
FAX (973) 471-5519                                         FAX (212) 888-7686

                 CONSOLIDATED DELIVERY & LOGISTICS, INC ACQUIRES
                               KBD SERVICES, INC.

 * Southeast Based Courier Becomes Second Major Acquisition in the Last 30 Days*

Clifton, NJ (August 10, 1998) - Consolidated Delivery & Logistics, Inc. (NASDAQ:
CDLI) announced that it has acquired KBD Services, Inc. of Raleigh/Durham, North
Carolina.  KBD  Services,  Inc.  is a  ground-based  provider  of time  critical
delivery and scheduled  courier  services in the rapid growth North Carolina and
South Carolina markets with revenues in 1997 of approximately $6.6 million.

Albert W. Van Ness,  Jr.,  Chairman of CD&L said,  "We are extremely  pleased to
have KBD join the CD&L  family.  Mr.  David  Chesney,  who along  with his wife,
Sherry,  founded KBD (which is named after their three sons) 19 years ago,  will
continue to lead this southeast ground courier entity under its new CD&L banner.
Dave and Sherry's son Ken will also remain along with the  approximate  480 part
and full time employees. The KBD group are extremely hardworking, dedicated, and
experienced courier professionals and have created an exceptional transportation
service  to an  important  group of  businesses  throughout  KBD's  geographical
presence.  The Chesney family  operates about 240 vehicles and has facilities in
Cary,  Charlotte,  Fayetteville  and  Greensboro,  North  Carolina  as  well  as
Columbia, South Carolina and Augusta, Georgia."

In closing, Mr. Van Ness reiterated, "One of the Company's primary goals in 1998
and forward is to identify  strategically  smart  acquisitions  that will enable
CD&L to realize enhanced synergies in local, regional and national markets where
the company  currently  operates and, as  important,  to establish a presence in
promising new markets.  KBD fits the "new market"  strategic  profile and we are
enthusiastic  that this  acquisition,  combined  with the  previously  announced
acquisition of Boston based Metro Courier,  will add increased  customer courier
service coverage and provide important improvements to the earnings potential of
CD&L."

Consolidated Delivery & Logistics,  Inc. headquartered in Clifton, New Jersey is
a full service,  same day ground and air delivery and logistics  company with 60
offices in 23 states and the District of Columbia.  The Company has nearly 3,000
employees  and utilizes over 1,000  independent  contractors  in providing  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,
revenue  growth  and  acquisitions.  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
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 be able to profitably integrate KBD and Metro into the CD&L service
system or other risks specified in the Company's SEC filings.
[{"type": "8-K", "sequence": "1", "description": "ASSET ACQUISITION AUGUST 5, 1998", "secsgml_size_bytes": 179576}]
{"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": "98693432"}, "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

                                 August 5, 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 August 5, 1998, Consolidated Delivery & Logistics,  Inc. ("CDL") entered into
and  consummated  an  agreement  (the  "Stock  Purchase   Agreement")  with  its
subsidiary,  Silver Star Express,  Inc.  ("Silver Star") and KBD Services,  Inc.
("KBD")  and David L.  Chesney,  KBD's sole  shareholder,  whereby  Silver  Star
purchased  all of the  outstanding  shares  of the  capital  stock  of KBD.

The  purchase  price was  approximately  $4 million,  with $2 million in cash, a
$1.46 million 7%  subordinated  convertible  note (the "Note") and a $500,000 7%
contingent  subordinated  convertible note (the "Contingent  Note"). The Note is
due August 5, 2003 with interest payable  quarterly  commencing  October 1, 1998
and is  convertible  in its  entirety  at the  option of the  holder at any time
through  July 1, 2003 into fully paid  shares of CDL's  stock at the  conversion
price of $6 per share.  CDL may  convert  all or any part of the Note into fully
paid  shares  of CDL's  stock at a  conversion  price of $6 per  share  when the
average  closing sales price equals or exceeds $6 over a thirty day period.  The
Contingent  Note is subject to a dollar for dollar  reduction  or  discharge  if
KBD's  earnings  before  interest  and taxes is less than  $700,000 for the year
ending  July  31,  1999  and is due  with  interest  on the  finally  determined
principal  amount  on  November  1,  1999.  The  holder or CDL may  convert  the
Contingent  Note in its  entirety  into  fully paid  shares of CDL's  stock at a
conversion  price of $6 after  September 16, 1999 through  October 20, 1999. The
Note and the  Contingent  Note are  subordinate  to all  indebtedness  due or to
become due to CDL's senior  lender,  First Union  Commercial  Corporation or its
affiliates.

The description above of the Stock Purchase Agreement,  Note and Contingent Note
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 KBD 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
KBD 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 August 5, 1998 by and between
                Consolidated Delivery & Logistics, Inc., KBD Services, Inc.,
                Silver Star Express, Inc. and David L. Chesney.

10.2            7% Subordinated Convertible Note Due 2003 of Consolidated
                Delivery & Logistics, Inc.

10.3            7% Contingent Subordinated Convertible Note Due 1999 of
                Consolidated Delivery & Logistics, Inc.

99.1            Press Release issued August 10, 1998 regarding acquisition of
                KBD Services, Inc.
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: August 18, 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

This STOCK PURCHASE AGREEMENT,  dated August 5, 1998, by and among KBD Services,
Inc., a North Carolina  corporation ("KBD" or the "Company"),  David L. Chesney,
an  individual  with an address at 760 Reedy Creek Road,  Cary,  North  Carolina
27512, (the "Shareholder"),  Consolidated Delivery & Logistics, Inc., a Delaware
corporation  ("CDL") and Silver Star Express,  Inc., a Florida  corporation  and
wholly owned subsidiary of CDL ("Purchaser").

                              W I T N E S S E T H:

WHEREAS,  the  Shareholder  is the  record and  beneficial  holder of all of the
issued and outstanding capital stock of the Company; and

WHEREAS,  the  Shareholder  desires  to sell  and  transfer  to  Purchaser,  and
Purchaser  desires to  purchase  from the  Shareholder,  all of the  outstanding
shares  of  capital  stock of the  Company,  all as more  specifically  provided
herein;

NOW,  THEREFORE,  in consideration of the mutual covenants contained herein, and
intending to be legally bound, the parties hereto agree as follows:
                                    ARTICLE I

                               Certain Definitions

Section 1.1.......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 3.19.

         "Affected Property" has the meaning ascribed to such term in
Section 3.15.

         "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 3.9.

         "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.

         "Closing" has the meaning ascribed to such term in Section 2.4.

         "Closing Date" has the meaning ascribed to such term in Section 2.4.

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

         "Company Common Stock" has the meaning ascribed to such term in
Section 2.1.

         "Contracts" has the meaning ascribed to such term in Section 3.20.

         "Damages" has the meaning ascribed to such term in Section 9.2.

         "Employee Benefit Plan" has the meaning ascribed to such term in
Section 3.17.

         "Encumbrances" has the meaning ascribed to such term in Section 3.3.

         "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.

         "Financial Statements" has the meaning ascribed to such term in
Section 3.8.

         "Five Year Note" has the meaning ascribed to such term in Section 2.2.

         "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 9.2.

         "Indemnifying Party" has the meaning ascribed to such term in
Section 9.2

         "Leased Real Property" has the meaning ascribed to such term in
Section 3.7.

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

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

         "One Year Note" has the meaning ascribed to such term in Section 2.2.

         "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" has the meaning ascribed to such term in Section
3.18.

         "Purchase Price" has the meaning ascribed to such term in Section 2.2.

         "Regulated  Substances"  means pollutants,  contaminants,  hazardous or
toxic  substances,  compounds  or  related  materials  or  chemicals,  hazardous
materials,  hazardous waste, flammable explosives, radon, radioactive materials,
asbestos,   urea  formaldehyde  foam  insulation,   polychlorinated   biphenyls,
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.

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

         "Survival Period" has the meaning ascribed to such term in Section 9.1.

         "Tangible Net Worth" means Total Assets,  less (without  limitation and
without duplication of deductions) the sum of (A) Total Liabilities of a Person,
(B) any reserves established by a Person for anticipated losses or expenses, (C)
the amount, if any, of all intangible items including any leasehold rights,  the
amount  of  any  investment  in any  Affiliates  or  other  entity  including  a
subsidiary,  good will (including any amounts, however designated on the balance
sheet,  representing  the cost of  acquisition  of business and  investments  in
excess of underlying tangible assets), trademarks,  trademark rights, trade name
rights, copyrights, patents, patent rights, licenses, unamortized debt discount,
marketing  expenses and customer  and/or  mailing  lists and (D) all amounts due
from employees, stockholders, Affiliates and subsidiaries.

         "Third Party Claim" has the meaning ascribed to such term in
Section 9.3.

         "Total  Assets"  means,  at any date, the amount shown in the books and
records of a Person,  determined in accordance with GAAP, of all property,  both
real and personal, of a Person.

         "Total  Liabilities"  means, at any date, the amount of all liabilities
which,  in  accordance  with  GAAP,  should be  included  in  determining  total
liabilities  as shown on a liability side of a balance sheet of a Person at such
date.

         Section  1.2.......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;  and (iii) words  importing  the  singular  shall also
include  the  plural,  and vice  versa.  References  to the  "knowledge"  of the
Stockholder or the Company means matters which the  Shareholder  knows or should
know in the performance of his duties for the Company.

                                   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 Section 2.4), the Shareholder shall sell,  assign,  transfer,  convey
and deliver to Purchaser (i) an aggregate of 100 shares of the common stock, par
value $1.00 per share, of the Company (the "Company  Common  Stock"),  which the
Shareholder  represents  constitutes all of the issued and outstanding shares of
the Company's  capital stock,  and Purchaser shall purchase such shares from the
Shareholder.

         Section 2.2.  Purchase Price.

                  (a)      The  aggregate  purchase price (the "Purchase Price")
to be paid by Purchaser for the Company Common Stock shall be an amount equal to
$4,028,777  subject to reduction as provided below and in the One Year Note (the
"Purchase Price").

                  (b)     The Base Purchase Price shall be payable in four parts
 as follows:

                         (i)      $2,033,777,  shall be payable in cash at the
Closing (the "Cash  Portion") by wire  transfer to an account or accounts of the
Shareholder  specified in writing by the Shareholder or by one or more certified
or bank cashier's checks payable to the order of the Shareholder;

                        (ii)  $35,000  shall  be  payable  in  cash  by  wire
transfer or check within ten (10) business days after the  Shareholder  provides
the Purchaser  with proof that all  liabilities  of the Company for interest and
penalties due to any taxing authority arising from or relating to periods ending
on or prior to the Closing Date have been satisfied in full;

                       (iii)    $1,460,000,  shall be paid by delivery of a
convertible  note of CDL with a five (5) year term  payable  to the  Shareholder
substantially in the form of Exhibit A hereto (the "Five Year Note"); and

                        (iv)     $500,000,  shall be paid by delivery of a
contingent  convertible  note of CDL,  with  approximately  a one (1) year  term
payable to the  Shareholder  substantially  in the form of Exhibit B hereto (the
"One Year Note", together with the Five Year Note, the "Notes").

                  (c)      The   One  Year  Note  is  subject  to  reduction  or
discharge if the  Company's  earnings  before  interest  and taxes,  computed in
accordance  with GAAP, for the one year period ended July 31, 1999, is less than
$700,000.  Reduction  is on a dollar for dollar basis for the amount of the EBIT
Shortfall. The reduction is more fully described in the One Year Note.

         Section  2.3.......Retained  Liabilities.  The Shareholder shall remain
liable for any  litigation or other  contingent  liabilities  (including but not
limited to any tax liabilities not accrued for on the Financial Statements,  any
interest  or  penalties  due  with  respect  to any  tax  liabilities,  and  any
liabilities  arising  from  the  Company's  failure  to  qualify  as  a  foreign
corporation   in  any  state)  listed  on  the   Schedules  to  this   Agreement
notwithstanding such disclosure.

         Section 2.4.......Closing. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Lowenstein Sandler PC,
65 Livingston Avenue,  Roseland,  New Jersey, at 10:00 A.M. on August 5, 1998 or
by facsimile on such date with original  documents to follow;  provided that, if
the conditions set forth in Article VII have not been either satisfied or waived
by such date,  then the Closing  shall occur  within five  Business  Days of the
satisfaction  or waiver of such conditions or at such other time and place as is
mutually  agreed by the  parties  hereto.  The time and date of the  Closing  is
herein called the "Closing Date".

                                   ARTICLE III

              Representations and Warranties Regarding the Company

         The  Shareholder  represents  and  warrants  to  Purchaser  and  CDL as
follows:

         Section  3.1.......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 North  Carolina,  with full power and  authority,
corporate and other,  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 3.1, which constitute all of the  jurisdictions in which the Company is
currently  conducting  its  business  (except  for three  states as to which the
Shareholder is currently in the process of qualifying the Company to do business
and which the Shareholder undertakes to complete expeditiously). The Company has
previously  provided to Purchaser  and CDL true and  complete  copies of (i) its
Certificate of Incorporation  and all amendments  thereto,  and (ii) its by-laws
and all amendments thereto. Other than as indicated on Schedule 3.1 the business
of the Company is conducted  solely through the Company and the Company does not
own, directly or indirectly,  any subsidiaries.  The Shareholder has no interest
in any business  engaged in air or ground  messenger,  courier or small  package
delivery services (the "Business") other than the Company.

         Section  3.2.......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 3.3.......Non-contravention. 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  Certificate 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,  or (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.

         Section 3.4.......No Consents.  Except as set forth in Schedule 3.4, 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  3.5.......Capitalization.  The  Company's  authorized  capital
stock consists  solely of 100,000  authorized  shares of Company Common Stock of
which 100 shares of Company Common Stock 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   3.6.......Personal   Property.   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
except  as set  forth in  Schedule  3.6.  To the  Shareholder's  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 3.7.......Leased Real Property. Except as set forth in Schedule
3.7, 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.  To  the  Shareholder's  knowledge,  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)
with no  structural or other  defects that could  interfere  with the conduct of
normal operation of such facilities.  The Company has delivered to Purchaser and
CDL true and complete copies of any leases for the Leased Real Property.  To the
Shareholder's  knowledge with respect to buildings not owned by the Shareholder,
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.

         Section  3.8.......Financial  Statements.  The Company  has  previously
furnished  to  Purchaser  and CDL (i) a true and  complete  copy of the  audited
balance  sheets of the Company,  taken as a whole,  as of March 31, 1998 and the
related statements of income, cash flows and changes in stockholders' equity for
the three (3) years then ended, certified by the independent  accountants of the
Company,  and (ii) a true and complete copy of an unaudited balance sheet of the
Company as of June 30, 1998 and the related statements of income, cash flows and
changes  in  stockholders'  equity  for  the  three  month  period  then  ended,
(collectively,  the "Financial Statements").  The Financial Statements have been
prepared in  conformity  with GAAP,  applied on a  consistent  basis and present
fairly the  financial  condition  and results of operations of the Company as of
and for the periods included therein.

         Section 3.9.......Absence of Certain Developments.  Except as set forth
in Schedule 3.9, since March 31, 1998,  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 3.9, since
March 31, 1998,  the 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)
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  Certificate  of  Incorporation  or  by-laws or taken any action in
contemplation of an amendment to such Certificate 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  Shareholder,
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,  or (xiii) entered into any agreement to do any
of the foregoing.

         Section  3.10......Governmental  Authorizations;   Licenses;  Etc.  The
business of the  Company  has been  operated  in  compliance  with all  material
applicable laws, rules,  regulations,  codes,  ordinances,  orders, policies and
guidelines of all Governmental Authorities,  including but not limited to, those
related to: fire, safety,  labeling of products,  pricing, sales or distribution
of products, antitrust, trade regulation, trade practices, sanitation, land use,
employment  or  employment  practices,  energy and similar  laws (but  excluding
parking and minor traffic violations). To the knowledge of the Shareholder,  the
Company  has  all  permits,   licenses,   approvals,   certificates   and  other
authorizations,  and has made all notifications,  registrations,  certifications
and filings with all  Governmental  Authorities,  necessary or advisable for the
operation of its business as currently  conducted.  There is no action,  case or
proceeding  pending or, to the best knowledge of the Company,  threatened by any
Governmental  Authority with respect to (i) any alleged violation by the Company
or its Affiliates of any law, rule, regulation,  code, ordinance,  order, policy
or guideline of any Governmental  Authority,  or (ii) any alleged failure by the
Company or its Affiliates to have any permit, license,  approval,  certification
or  other  authorization  required  in  connection  with  the  operation  of its
business.  No notice of any  violation  of such  laws has been  received  by the
Company or any of its Affiliates.

         Section  3.11......Litigation.  Except as set forth in  Schedule  3.11,
there are no lawsuits, actions,  proceedings,  claims,  arbitrations,  orders or
investigations  by or before any Governmental  Authority pending or, to the best
knowledge  of the  Company,  threatened  against the  Company or its  Affiliates
relating to such Company, its business or any product or service alleged to have
been sold by such  Company or seeking  to enjoin the  transactions  contemplated
hereby  and,  except  as set  forth  in  Schedule  3.11,  there  are no facts or
circumstances  known to the Company  that could result in a claim for damages or
equitable  relief which, if decided  adversely,  could reasonably be expected to
result in a Material Adverse Change, individually or in the aggregate.

         Section 3.12......Undisclosed  Liabilities.  Other than those reflected
in the Financial  Statements,  there are no material (defined below) 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
to the Shareholder'  knowledge,  there exists no facts or  circumstances  (other
than general economic conditions) that could reasonably be expected to result in
any  such  liability.  "Material"  liabilities  means  liabilities  that  in the
aggregate exceed $10,000.

         Section 3.13......Taxes.  All federal, state, county, local and foreign
tax  returns  and  reports of the  Company  required  to be filed have been duly
filed. All federal, state, county, local, foreign and any other taxes (including
all income,  withholding and employment taxes),  assessments (including interest
and  penalties),  fees  and  other  governmental  charges  with  respect  to the
employees,  properties,  assets,  income or  franchises of the Company have been
paid or duly provided for, or are being  contested in good faith by  appropriate
proceedings  as disclosed on Schedule 3.13 and adequate  reserves  therefor have
been  established   pursuant  to  GAAP,  and  are  reflected  on  the  Financial
Statements. There are no tax liens on any of the assets of the Company.

         Section  3.14......Insurance.  Schedule  3.14  sets  forth  a true  and
correct list of all insurance  policies or binders  maintained by the Company on
the date  hereof  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 policies and binders are, and at all times prior to the Closing will be, in
full force and  effect.  The Company has not  permitted  or suffered  any gap in
insurance coverage during the past six years.

         Section  3.15......Environmental   Matters.  Except  as  set  forth  on
Schedule  3.15,  to the  knowledge of the  Shareholder,  (i) the business of the
Company is being and has been  conducted in  compliance  with all  Environmental
Laws,  (ii)  the  real  property  owned,  leased  or  operated  by  the  Company
(including,  without limitation, soil, groundwater or surface water on, under or
adjacent to the properties and buildings thereon) (the "Affected Property") does
not contain any Regulated  Substance  other than as permitted  under  applicable
Environmental  Laws,  (iii) the  Company  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 of the Company,
(iv) the Company has not  received  any notice from any  Governmental  Authority
that the Company or any of its Affiliates 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  Company,  (v) no reports have been
filed, or have been required to be filed, by the Company  concerning the release
of any Regulated  Substance or the violation of any  Environmental  Law on or at
the properties used in the business of the Company,  (vi) no Regulated Substance
has been disposed of,  transferred,  released or  transported  from the Affected
Property, other than as permitted under applicable Environmental Law pursuant to
appropriate  regulations,  permits or  authorizations,  (vii) 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  of the  Company,  true and  complete  copies  of  which  have not been
delivered  to Purchaser  and CDL prior to the date  hereof,  (viii) there are no
underground  storage  tanks  on,  in or  under  any  Affected  Property  and  no
underground  storage  tanks  have  been  closed  or  removed  from any  Affected
Property, (ix) the Company has not presently incurred, and the Affected Property
is not presently subject to, any liabilities  (fixed or contingent)  relating to
any  suit,  settlement,   judgment  or  claim  asserted  or  arising  under  any
Environmental  Law,  (x) all  Environmental  Laws in  existence  at the time the
Affected  Property was acquired were complied with, and (xi) there are no civil,
criminal  or  administrative   actions,   suits,  demands,   claims,   hearings,
investigations or other proceedings pending or threatened against the Company or
any of its  Affiliates  with respect to the business of the Company  relating to
any violations, or alleged violations, of any Environmental Law, and neither the
Company nor any of its  Affiliates  has 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  any  of its  Affiliates  has  been  notified  by any  Governmental
Authority or any other Person that the Company has, or may have,  any  liability
pursuant to any Environmental Law.

         Section 3.16......Employee Matters.

         (a) Schedule 3.16 contains a true and complete list as of June 30, 1998
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  3.16,  (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 Purchaser 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  3.17......Employee  Benefit  Plans.  Schedule  3.17  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 3.17, 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 3.18......Proprietary Rights.

         (a)  All  of  the  Company's  patents,  patent  registrations,   patent
applications,   trademarks,   service   marks,   trademark   and  service   mark
registrations and applications therefor,  copyrights,  copyright  registrations,
copyrights applications,  trade names, corporate names, technology,  inventions,
computer software, data and documentation  (including electronic media), product
drawings, trade secrets, know-how, customer lists, processes, other intellectual
property and proprietary  information or rights; and permits,  licenses or other
agreements to or from third parties  regarding the foregoing  (the  "Proprietary
Rights") are listed in Schedule 3.18. Except as disclosed therein,  the Company,
either jointly or individually, owns and possesses all right, title and interest
in the  Proprietary  Rights.  The Company has taken all  necessary  or desirable
action to protect the Proprietary  Rights and 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  Right has been made,  is
currently pending or, to the best knowledge of the Company,  is threatened.  The
Company has not received any notice 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 business of the Company
as now conducted.

         Section 3.19......Accounts Receivable.  Schedule 3.19 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") as of June 30, 1998 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),  have been  billed and are  collectible
within 90 days of the date created.  The Shareholder  shall update this Schedule
as of the Closing Date, subject to the foregoing representations.

         Section 3.20......Contracts.

         (a)  Schedule  3.20  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 or commitments  for the sale by the Company
         of  products  or  services,  or  the  purchase  by the  Company  of raw
         materials,  products or services, other than those that are for amounts
         not to exceed $10,000;

                  (ii) all  agreements  or  commitments  for the purchase by the
         Company of machinery,  equipment or other personal  property other than
         those that are for amounts not to exceed $10,000;

                  (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  Shareholder,  any Affiliate of the  Shareholder or any
         other officer, director or employee of the Company;

                  (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 $5,000;

                  (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 $25,000
         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  Contracts  either as a result of  transactions  contemplated
hereby or otherwise, except as disclosed in Schedule 3.20.

                  (c) Except as disclosed in Schedule  3.20,  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 material 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 material Contracts.

                  (d)  True  and  complete  copies  of  all  written  Contracts,
including any  amendments  thereto,  have been delivered to Purchaser 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  3.21......Customers and Suppliers.  Schedule 3.21 sets forth a
list of (a) the fifteen (15) largest  customers of the Company in terms of gross
sales  during  the year  ended  March  31,  1998  and (b) the ten  (10)  largest
suppliers of the Company in terms of  purchases  during the year ended March 31,
1998.  Except as set forth on Schedule 3.21, (a) no customer  listed on Schedule
3.21 has  notified or otherwise  indicated to the Company that it will stop,  or
decrease  the rate of,  its  purchases  of  services  from the  Company,  and no
customer has, during the current fiscal year, ceased or materially decreased its
purchases of any such services from the Company;  and (b) no supplier  listed on
Schedule  3.21 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 3.21 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  3.22......Books and Records.  The stock records of the Company
fairly and  accurately  reflect the record  ownership of all of the  outstanding
shares of its capital stock. Since April 1, 1995, 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
contains  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 3.23......Net Worth of the  Company.  As of June 30,  1998,
the Company had a tangible  net worth of not less than $740,000.

         Section  3.24......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,  except for Centura  Investment  Bank pursuant to a letter
agreement  dated October 8, 1997. The fees of Centura  Investment Bank fees will
be paid solely by the Shareholder.

         Section 3.25......Full  Disclosure.  No representation or warranty made
by the Shareholder 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 IV

            Representations and Warranties Regarding the Shareholder

         The  Shareholder  represents  and  warrants  to  Purchaser  and  CDL as
follows:

         Section  4.1.......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 4.2.......Non-contravention. Neither the execution and delivery
of this  Agreement nor the  performance by the  Shareholder of their  respective
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 Shareholder is a party or by
which  any  Shareholder  is  bound  or to  which  any of his  or her  assets  or
properties  are  subject,  (iii)  result in the  creation or  imposition  of any
Encumbrances  on any of the assets or properties of the Company,  or (iv) 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 Company.

         Section   4.3.......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  4.4.......Ownership  of the Company's Shares.  The Shareholder
owns 100 shares of the Company's Common Stock  beneficially and of record,  free
and clear of any Encumbrances which represents all of the issued and outstanding
capital  stock  of  the  Company.   There  are  no  voting  trust  arrangements,
shareholder  agreements or other agreements (i) granting any option,  warrant or
right of first  refusal with respect to the Company  Common Stock to any Person,
(ii)  restricting  the right of the Shareholder to sell the Company Common Stock
to Purchaser and CDL, (iii)  restricting any other right of any Shareholder with
respect to the Company Common Stock or (iv) creating any penalties,  liabilities
or disabilities from a sale of the Company Common Stock. The Shareholder has the
absolute and unrestricted right, power and capacity to sell, assign and transfer
the  Company   Common  Stock  to  Purchaser  and  CDL  free  and  clear  of  any
Encumbrances.   Upon  delivery  to  Purchaser   and  CDL  of  the   certificates
representing   the  Company   Common  Stock  at  Closing  in  exchange  for  the
consideration to be paid by Purchaser and CDL at the Closing,  Purchaser and CDL
will acquire good, valid and marketable title to the Company Common Stock,  free
and clear of any Encumbrances.

         Section  4.5.......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  Purchaser in  connection  with this  Agreement  or any of the  transactions
contemplated hereby.

         Section 4.6.......Full  Disclosure.  No representation or warranty made
by  any  Shareholder  in  this  Agreement,  any  Schedule,  any  Exhibit  or any
certificate  delivered,  or to be delivered,  by or on behalf of any Shareholder
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 V

               Representations and Warranties Regarding Purchaser
                                     and CDL

         Purchaser and CDL, jointly and severally,  represent and warrant to the
Shareholder as follows:

         Section   5.1.......Organization.   Purchaser  is  a  corporation  duly
organized,  validly existing and in good standing under the laws of the State of
Florida and has full power and authority,  corporate and other,  to own or lease
its property and assets and to carry on its business as presently conducted. CDL
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has full power and  authority,  corporate  and
other,  to own or lease its  property and assets and to carry on its business as
presently conducted.

         Section  5.2.......Authorization.  Each of  Purchaser  and CDL has full
power and authority,  corporate and other, to execute and deliver this Agreement
and to perform its respective obligations hereunder, all of which have been duly
authorized  by all  requisite  corporate  action.  This  Agreement has been duly
authorized,  executed  and  delivered by Purchaser  and CDL,  respectively,  and
constitutes a valid and binding agreement such party,  enforceable  against such
party  in  accordance  with  its  terms,  subject  to  bankruptcy,   insolvency,
fraudulent  transfer,  reorganization,  moratorium  and similar  laws of general
applicability  relating to or affecting  creditors' rights and to general equity
principals.

         Section  5.3.......Non-contravention.  Neither  Purchaser  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   5.4.......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
Purchaser and CDL.

         Section  5.5.......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  Purchaser  or  CDL  in  connection  with  this  Agreement  or any of the
transactions contemplated hereby.

         Section 5.6.......SEC  Documents.  CDL has delivered to the Stockholder
(who represents that he, or such  Stockholder's  purchaser  representative,  has
read and  reviewed)  CDL's Form 10-K for the year ended  December 31, 1997,  its
Form 10-Q for the  quarter  ended March 31,  1998,  its Form 8-K for an event in
July 1998 and its proxy  statement for its annual  meeting held on June 17, 1998
(the "SEC Documents") and no other documents have been filed since the filing of
the Company's Form 10-Q. The SEC Documents adequately and correctly describe the
business  of CDL as at their  respective  dates,  and the  Shareholder  may rely
thereon.  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.  There  is no  fact  or  circumstance  that
Purchaser and CDL have not disclosed to the  Shareholder  that  Purchaser or CDL
presently  believe has resulted in a Material Adverse Change or could reasonably
be expected to have a Material Adverse Effect on the ability of Purchaser or CDL
to perform their obligations under this Agreement.

                                   ARTICLE VI

                            Covenants and Agreements

         Section 6.1.......Access and Information. No investigation by Purchaser
and CDL  heretofore  or  hereafter  made shall  modify or  otherwise  affect any
representations  and warranties of the Company or the  Shareholder,  which shall
survive any such investigation,  or the conditions to the respective obligations
of Purchaser and CDL to consummate the transactions contemplated hereby.

         Section 6.2.......Transfer and Other Taxes.

                  (a)......The Shareholder  represents that there are no stamp,
stock  transfer,  sales,  purchase,  use or  similar  tax  under the laws of any
Governmental  Authority of North  Carolina  arising out of or resulting from the
purchase of the Company Shares.

                  (b)......Each  party  hereto  shall (i)  prepare  and file all
income and other tax  returns  reporting  income or other  taxes due through the
Closing  Date,  (ii) be  responsible  for the  conduct  of all tax  examinations
relating to its, his of her respective tax returns referred to in (i) above, and
(iii) pay all taxes  owing with  respect to his or her  respective  tax  returns
referred to in (i) above.  The Shareholder  shall also be responsible for filing
any income tax  returns  and paying any income  taxes (to the extent  such taxes
have not been  reserved in the  Financial  Statements  of the  Company)  for the
Company  for a fiscal  year or  reporting  period  which  ends on or before  the
Closing Date.  Purchaser will provide the Shareholder and their accountants with
reasonable  access to books and records  necessary for the  preparation  of such
returns.

         Section 6.3.......Non-Competition and Confidentiality Agreement.

                  (a)......The  Shareholder  agrees that he will not, and he
will cause his respective Affiliates not to, directly or indirectly, take any of
the following actions:

                  .........(i)      engage in or compete with the provision of
products  or  services  offered  by CDL or  any of its  subsidiaries,  including
without limitation Purchaser,  anywhere in the State of North Carolina or within
250 miles of its borders (the "Territory");

                  .........(ii)     engage,  contract for or solicit,  with
respect to the  provision  of products or services  offered by CDL or any of its
subsidiaries,  (x) any  customers of CDL or any of its  subsidiaries,  including
without  limitation  Purchaser,  or (y) any  customers of the Company in the two
year (2) period preceding the Closing;

                  .........(iii)    employ,  engage,  contract  for or solicit
the services in any capacity of any Person who is employed by or an  independent
contractor  of the  Company  either  on the date  hereof  or on the date of such
solicitation; or

                  .........(iv)     use for his or her own  benefit  or,  except
as  required  by law,  divulge or convey to any third  party,  any  Confidential
Information (as hereinafter defined) relating to the Company.

                  (b)......Each of the foregoing covenants,  except the covenant
set forth in Section 6.4(a)(ii),  shall continue for a period of three (3) years
from the Closing Date; provided, however, that if Shareholder is employed by CDL
or any of its subsidiaries,  including without  limitation  Purchaser,  he shall
continue to be bound by such  covenants  for a period of two (2) years after the
date on which his  employment  ceases for any reason or no reason.  The covenant
set forth in Section  6.4(a)(ii) shall continue for a period equal to the longer
of five (5) years  from the  Closing  Date;  or two (2) years  after the date on
which such  Shareholder's  employment  ceases  for any reason or no reason.  The
Shareholder  agrees that the time periods set forth in the  preceding  sentences
shall be  computed by  excluding  from such  periods any time during  which such
Shareholder is in violation of any provision of this Section 6.3.

                  (c)......Notwithstanding  the  foregoing,  the  covenants  set
forth in this Section 6.3 shall not be deemed to prohibit the  Shareholder  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.

                  (d)......The  Shareholder  acknowledges  that the restrictions
contained  in this  Section  6.3 are  reasonable  and  necessary  to protect the
legitimate interests of Purchaser and CDL and that any breach by the Shareholder
of any provision hereof will result in irreparable  injury to Purchaser and CDL.
The Shareholder acknowledges that, in addition to all remedies available at law,
Purchaser 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 Purchaser nor CDL shall
be required to post any bond or other security in connection with any proceeding
to enforce this Section 6.4.

                  (e)......All  of the  covenants  set forth in this Section 6.3
shall be construed as an agreement  independent  of any other  provision of this
Agreement,  and the  existence  of any  claim  of the  Shareholder  against  the
Purchaser  or CDL shall not  constitute  a defense  to the  enforcement  of such
covenants.

                  (f)......For  purposes  of  this  Section  6.3,  "Confidential
Information"  consists of all information,  knowledge or data relating to either
of the Company  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 such Company 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 neither the Shareholder  nor his Affiliates,  directly or indirectly,
cause such information to enter the public domain.

         Section   6.4.......Guarantees.   The   Purchaser   will   relieve  the
Shareholder and his spouse of personal guarantee or co-maker obligations for any
bank  indebtedness  or finance  leasing  obligations  of the  Company  listed on
Schedule 6.4 within 90 days of the date hereof.

         Section  6.5.......Operations  of the Company in Cary,  North Carolina.
The Leased Real Property in Cary, North Carolina is owned by the Shareholder and
his wife.  The  Shareholder  and the Purchaser  will negotiate a lease within 60
days have  Closing  permitting  the  Company to  continue  to use such  facility
containing the following  material  terms: 5 year lease term,  $14.50 per square
foot triple net and 6,000 square feet. The  Shareholder  also owns property used
by the Company in Charlotte,  North Carolina.  The Shareholder and the Purchaser
will negotiate a mutually  acceptable  lease for such premises within 60 days of
closing at no higher than a fair market rental.

         Section 6.6.......Audited  Financial Statements of the Company; SEC and
Other Governmental Disclosure and Reporting Requirements.  All fees and expenses
incurred  in  connection  with any  audits of the  financial  statements  of the
Company,  including without  limitation the audited financial  statements of the
Company  for  the  twelve  months  ended  March  31,  1998,  shall  be the  sole
responsibility of the Shareholder.

         Section 6.7.......Certain Reporting Requirements.  Unless and until all
of the  shares  which are or could be issued  under the Notes  (the  "Underlying
Shares")  are sold or eligible  for sale under Rule 144(k) of the SEC,  CDL will
remain current in filing all reports with the SEC necessary to allow transfer of
the Underlying Shares if otherwise eligible for sale under Rule 144.

         Section  6.8.......Conduct  of  Business.  Until  July  31,  1999,  the
Purchaser will not make any material changes in the operation of the Seller from
the manner it is currently being operated without the consent of the Shareholder
(which  consent  shall not be  unreasonably  withheld or delayed) if such change
would have a material adverse effect on the KBD EBIT, as defined on the One Year
Note;  provided  however  that the  foregoing  shall  not  impair  CDL's and the
Purchaser's right to manage its subsidiary except as expressly stated herein.

         Section  6.9.......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 Shareholder,  Purchaser
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 Shareholder
shall use their  respective  reasonable best efforts to assist Purchaser and CDL
in connection  with the  fulfillment of any SEC  disclosure,  reporting or other
governmental  compliance  obligation  of Purchaser  and CDL,  including  without
limitation  providing Purchaser and CDL with any financial and other information
requested by Purchaser  and CDL. In the event that at any time after Closing any
further action is necessary to carry out the purposes of this Agreement, each of
the Company, the Shareholder, Purchaser and CDL agree shall take all such action
as may be required without any further consideration therefor.

         Section  6.10......Reservation  of Underlying  Shares.  The  authorized
capital stock of CDL is 30,000,000  shares of common stock and 2,000,000  shares
of  preferred  stock.  Until  such time as the Notes  are no longer  subject  to
conversion  into shares of common  stock of CDL,  as provided by the Notes,  CDL
agrees to take such action as is necessary to ensure that an adequate  number of
shares of CDL are authorized, unissued and reserved for issuance upon conversion
of the Notes  (including,  if necessary,  increasing  the  authorized  number of
shares of common stock).  CDL represents and warrants that as of the date hereof
sufficient  shares of  authorized  CDL common stock exist and have been reserved
for issuance upon conversion of the entire  principal amount of the Notes at the
initial conversion price.

                                   ARTICLE VII

                               Closing Deliveries

         Section 7.1.......Mutual  Condition. 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 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.

         Section  7.2.......Deliveries  by the Company and the Shareholder.  The
obligations of Purchaser 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) (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  Shareholder  and the  consummation by the
Company and the Shareholder of the transactions  contemplated  hereby shall have
been  obtained  and shall be in full force and effect;  (ii) the Company and the
Shareholder 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 such Company is party or for the continuation of any
agreement  to which  such  Company  is a party;  and (iii)  all  authorizations,
consents,  waivers,  approvals or other actions necessary to permit Purchaser to
own the Company  Shares shall have been  obtained and shall be in full force and
effect.  By Closing,  the  Shareholder  shall be deemed to have  represented and
warranted that such conditions have been fulfilled.

         (b)  Prior  to or at  the  Closing,  (i)  the  Shareholder  shall  have
delivered to the Company,  as  applicable,  for  cancellation  the  certificates
representing the Company Common Stock, (ii) the Company shall have canceled such
certificates,  and  (iii)  the  Company  shall  have  issued  to  Purchaser  new
certificates  representing  the Company  Common Stock  registered in the name of
Purchaser or as otherwise directed by it.

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

                  (i) 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  Purchaser  and CDL may
         reasonably request;

                  (ii) a certified copy of (1) the Certificate 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;

                  (iii) The Shareholder shall enter into an employment agreement
         (the "Employment  Agreement") with Purchaser,  which agreement shall be
         in substantially the same form as attached Exhibit D;

                  (iv)     documents  evidencing the Cary, North Carolina Lease
         and any required  landlord consents
         to the Company's other real estate leases;

                  (v) an opinion  of Howard,  Stallings,  Story,  Wyche,  From &
         Hutson,  P.A.,  counsel to the Company and the  Shareholder,  dated the
         Closing Date, and substantially in the form attached as Exhibit E; and

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

         (d) Prior to or at the Closing, (i) the Company shall have received the
written  resignation  of all  directors  and  officers  of each of the  Company,
effective as of the Closing,  (ii) the Company, or the Shareholder,  as the sole
stockholders of the Company,  shall have taken all action  necessary to elect as
successor  directors  and  officers  effective as of the Closing such persons as
shall be directed by Purchaser  and CDL, and (iii)  Purchaser and CDL shall have
received  evidence  satisfactory  to it in  its  sole  discretion  of all of the
foregoing.

         Section  7.3.......Deliveries by CDL and Purchaser.  The obligations of
the  Shareholder 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) Prior to or at the Closing,  Purchaser and CDL shall have delivered
to the Shareholder  such closing  documents as shall be reasonably  requested by
the  Shareholder  in form and  substance  reasonably  acceptable to its counsel,
including the following:

                  (i) a certificate  of the Secretary or Assistant  Secretary of
         each of Purchaser 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  Shareholder  may
         reasonably request;

                  (ii) a  certified  copy of the  resolutions  of the  Board  of
         Directors  of  Purchaser   authorizing  the  execution,   delivery  and
         consummation of this Agreement and the transactions contemplated hereby
         and thereby;

                  (iii)    the Shareholder shall have executed the Employment
         Agreement;

                  (iv)     an opinion of Lowenstein  Sandler PC,  counsel to
         Purchaser  and CDL,  dated  the  Closing  Date,  and  substantially
         in the form attached as Exhibit F;

                  (v)      payment of the Cash Portion Purchase Price, as set
         forth in Section 2.2;

                  (vi)     delivery of the One Year Note and the Five Year Note;
         and

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

                      ARTICLE VIII - Intentionally Omitted

                                   ARTICLE IX

           Survival of Representations and Warranties; Indemnification

         Section 9.1.......Survival of Representations and Warranties. Except as
set  forth  below,  the  representations  and  warranties  provided  for in this
Agreement  shall  survive the Closing for three (3) 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  3.13 and 3.15 shall
survive  the Closing and remain in full force and effect for the greater of five
(5) years or the applicable statute of limitations  periods. The survival period
of  each  representation  or  warranty  as  provided  in  this  Section  9.1  is
hereinafter referred to as the "Survival Period."

         Section 9.2.......Indemnification.

         (a) The Shareholder shall indemnify and hold harmless  Purchaser,  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 the  Shareholder  or the
Company in this Agreement for the applicable Survival Period, or (ii) the breach
by  Shareholder  or the Company of any  covenant or agreement to be performed by
him or it  hereunder  or (iii)  any tax or  other  material  liabilities  of the
Company for periods  prior to the Closing Date which were not accrued for on the
June 30, 1998 balance sheet delivered pursuant to Section 3.8.

         (b)  CDL  and   Purchaser   shall   indemnify  and  hold  harmless  the
Shareholder,  his Affiliates, and any Person claiming by or through him, against
and in respect of any and all Damages arising out of, resulting from or incurred
in  connection  with (i) any material  inaccuracy in any  representation  or the
breach  of any  warranty  made by  Purchaser  or CDL in this  Agreement  for the
applicable  Survival Period,  or (ii) the material breach by Purchaser or CDL of
any  covenant or agreement to be performed by it hereunder or (iii) any material
liability  of the  Shareholder  under  a  personal  guarantee  of the  Company's
business obligations.

         (c) Any Person providing  indemnification pursuant to the provisions of
this Section 9.2 is hereinafter  referred to as an "Indemnifying  Party" and any
Person entitled to be indemnified pursuant to the provisions of this Section 9.2
is hereinafter referred to as an "Indemnified Party."

         Section 9.3.......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 (in which case the Indemnified  Party may defend against such
injunctive or equitable relief without  affecting its claim for  indemnification
hereunder),  or (ii) the Indemnified Party shall have reasonably  concluded that
the Indemnified Party has one or more defenses not available to the Indemnifying
Party  (in  which  case the  Indemnified  Party  shall  nonetheless  permit  the
Indemnifying  Party  to  have  meaningful   participation  in  the  litigation).
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  9.4.......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.  In the  event  that  the
Indemnified Party is required to institute legal proceedings in order to recover
Damages   hereunder,   the  cost  of  such   proceedings   (including  costs  of
investigation and reasonable  attorneys' fees and disbursements)  shall be added
to the amount of Damages payable to the Indemnified Party.

         Section 9.5.......Right of Set-Off.  Subject to Section 9.6, Purchaser,
the Company and CDL shall have the right to  set-off,  against any amount  which
may be owed by the Company,  Purchaser and/or CDL to the Shareholder  (including
but not limited to amounts  due under the Notes) any amount  owed to  Purchaser,
and/or the Company by the  Shareholder  pursuant to this Agreement or otherwise.
This Section 9.5 shall not be construed  so as to afford  Purchaser  and CDL any
rights of set-off  with  respect to the One Year Note except as provided in such
Note.

         Section   9.6.......Limits  on  Indemnification.   Notwithstanding  the
foregoing,  no claim for  indemnification or setoff shall be made hereunder with
respect to the first $50,000 of losses suffered by either CDL,  Purchaser or the
Company on the one hand, or the  Shareholder,  on the other. No right of set-off
may be  exercised  or  allowed  with  respect  to a Note  once the Note has been
converted into Common Stock.

                                    ARTICLE X

                                  Miscellaneous

         Section 10.1......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 the Purchaser or CDL:                 380 Allwood Road
                                            Clifton, New Jersey 07021
                                            Telephone: (973) 471-1005
                                            Facsimile: (973) 471-5519
                           Attention: Mark Carlesimo, General Counsel

With a copy to:   Lowenstein Sandler PC
                                            65 Livingston Avenue
                                            Roseland, New Jersey 07068
                                            Telephone: (973) 992-8700
                                            Facsimile: (973) 992-5820
                                      Attention: Alan Wovsaniker, Esq.

If to the Shareholder:                      Mr. David Chesney
                                            1605 Dunblane Court
                                            Cary, North Carolina 37511
                                            Telephone: 919-362-9826

With a copy to:   Howard, Stallings, Story, Wyche, From & Huston, P.A.
                                            P.O. Box 12347
                                            4000 West Chase Boulevard
                                            Suite 400
                                            Raleigh, North Carolina 27605
                                            Telephone:  (919) 821-7700
                                            Facsimile:   (919) 821-7703
                                            Attention:  E. Cader Howard, Esq.

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

         Section 10.2.     Expenses.  Regardless  of whether the  transactions 
provided for in this Agreement are consummated,  each party hereto shall pay its
own  expenses  incident  to this  Agreement  and the  transactions  contemplated
herein.

         Section 10.3.  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 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  10.4.  Assignment;  Successors  and  Assigns;  No Third  Party
Rights. Except as otherwise provided herein (or in the Note), this Agreement may
not be assigned by operation of law or otherwise,  and any attempted  assignment
shall be null and void.  Purchaser  and CDL may assign  all of their  respective
rights under this  Agreement to any Affiliate;  provided such Affiliate  assumes
all of the  obligations of the  respective  obligations of the Purchaser and CDL
hereunder  and CDL and  Purchaser  remain  liable  on all of  their  obligations
hereunder.  This Agreement shall be binding upon and inure to the benefit of the
parties  hereto  and  their  respective  heirs,  successors,  assigns  and legal
representatives.  This Agreement shall be for the sole benefit of the parties to
this  Agreement  and  their  respective  heirs,  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  heirs,  successors,  assigns
and  legal  representatives,  any  legal or  equitable  right,  remedy  or claim
hereunder.

         Section 10.5.     Counterparts.  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.

         Section 10.6.     Titles and  Headings;  Schedules.  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 10.7. 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 10.8.     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  10.9.  Public  Announcement.  Except  with  respect to filings
required  by the  SEC to be  made  Purchaser  and  CDL  and as may be  otherwise
required by law, the Company and the Shareholder, on the one hand, and Purchaser
and CDL,  on the other  hand,  shall not 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 10.10. 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 10.11. 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  10.12.  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.

                                       KBD SERVICES, INC.

                                       By:_/s/ David L. Chesney
                                       Name:David L. Chesney
                                       Title:   President

                                       /s/ David L. Chesney
                                       David L. Chesney

                                       SILVER STAR EXPRESS, INC.

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

                                       CONSOLIDATED DELIVERY & LOGISTICS, Inc.
 
                                       By:  /s/ Albert W. Van Ness, Jr.
                                       Name:  Albert W. Van Ness, Jr.
                                       Title:  Chairman
-iii-
                                            TABLE OF CONTENTS

                                     Article I - Certain Definitions

Section 1.1.        Certain Definitions.....................................1
Section 1.2.        Interpretation..........................................4

                      Article II - Purchase and Sale of Stock; Additional
                                           Covenants

Section 2.1.        Purchase and Sale of Stock..............................4
Section 2.2.        Purchase Price..........................................4
Section 2.3.        Balance Sheet Adjustment; Retained Liabilities..........5
Section 2.4.        Closing.................................................5

                    Article III - Representations and Warranties Regarding the
                                         Company

Section 3.1.        Organization and Qualification of the Company...........6
Section 3.2.        Authorization...........................................6
Section 3.3.        Non-contravention.......................................6
Section 3.4.        No Consents.............................................6
Section 3.5.        Capitalization..........................................7
Section 3.6.        Personal Property.......................................7
Section 3.7.        Leased Real Property....................................7
Section 3.8.        Financial Statements.......................... .........7
Section 3.9.        Absence of Certain Developments.........................7
Section 3.10.       Governmental Authorizations; Licenses; Etc..............8
Section 3.11.       Litigation..............................................9
Section 3.12.       Undisclosed Liabilities.................................9
Section 3.13.       Taxes...................................................9
Section 3.14.       Insurance...............................................9
Section 3.15.       Environmental Matters...................................9
Section 3.16.       Employee Matters.......................................10
Section 3.17.       Employee Benefit Plans.................................11
Section 3.18.       Proprietary Rights.....................................11
Section 3.19.       Accounts Receivable ...................................12
Section 3.20.       Contracts..............................................12
Section 3.21.       Customers and Suppliers................................13
Section 3.22.       Books and Records......................................13
Section 3.23        Net Worth of the Company...............................14
Section 3.24.       Brokers................................................14
Section 3.25.       Full Disclosure........................................14
Article IV - Representations and Warranties Regarding the
                                          Shareholder

Section 4.1.        Authorization..........................................14
Section 4.2.        Non-contravention......................................14
Section 4.3.        No Consents............................................15
Section 4.4.        Ownership of the Company's Shares.............   ......15
Section 4.5.        Brokers................................................15
Section 4.6.        Full Disclosure........................................15

                  Article V - Representations and Warranties Regarding Purchaser
                                      and CDL

Section 5.1.        Organization...........................................15
Section 5.2.        Authorization.................................... .....16
Section 5.3.        Non-contravention......................................16
Section 5.4.        No Consents............................................16
Section 5.5.        Brokers................................................16
Section 5.6         SEC Documents..................................... ....16

                                  Article VI - Covenants and Agreements

Section 6.1.        Access and Information.................................16
Section 6.2.        Transfer and Other Taxes...............................17
Section 6.3.        Non-Competition and Confidentiality Agreement.  .......17
Section 6.4.        Guarantees.............................................18
Section 6.5.        Operations of the Company in Cary, North Carolina......18
Section 6.6.        Audited Financial Statements; SEC Disclosure...........19
Section 6.7.        Certain Reporting Requirements.........................19
Section 6.8.        Conduct of Business....................................19
Section 6.9.        Best Efforts; Further Assurances.......................19
Section 6.10.       Reservation of Underlying Shares.......................19

                                     Article VII - Closing Deliveries

Section 7.1.        Mutual Condition.......................................20
Section 7.2.        Deliveries by the Company and the Shareholder..........20
Section 7.3.        Deliveries by CDL and Purchaser........................21

                                   Article VIII - Intentionally Omitted

                 Article IX - Survival of Representations and Warranties;
                                        Indemnification

Section 9.1.        Survival of Representations and Warranties.............22
Section 9.2.        Indemnification........................................22
Section 9.3.        Procedures for Third Party Claims......................23
Section 9.4.        Procedures for Inter-Party Claims.................. ...23
Section 9.5.        Right of Set-Off.......................................24
Section 9.6.        Limits on Indemnification..............................24

                                        Article X - Miscellaneous

Section 10.1.       Notices................................................24
Section 10.2.       Expenses...............................................25
Section 10.3.       Governing Law; Consent to Jurisdiction.................25
Section 10.4.       Assignment; Successors and Assigns; No Third Party
                       Rights..............................................26
Section 10.5.       Counterparts...........................................26
Section 10.6.       Titles and Headings; Schedules.........................26
Section 10.7.       Entire Agreement.......................................26
Section 10.8.       Amendment and Modification........................ ....26
Section 10.9.       Public Announcement....................................26
Section 10.10.     Waiver..................................................26
Section 10.11.     Severability............................................27
Section 10.12.     No Strict Construction..................................27

                                                Schedules

Schedule 3.1        Foreign Qualifications of the Company
Schedule 3.4        Consents
Schedule 3.6        Encumbrances
Schedule 3.7        Leased Real Property
Schedule 3.9        Certain Developments
Schedule 3.11       Litigation
Schedule 3.13       Tax Contests
Schedule 3.14       Insurance
Schedule 3.15       Environmental Matters
Schedule 3.16       Employee Matters
Schedule 3.17       Employee Benefit Plans
Schedule 3.18       Proprietary Rights
Schedule 3.19       Accounts Receivable
Schedule 3.20       Contracts
Schedule 3.21       Customers and Suppliers
Schedule 6.4        Personal Guarantees

                                                 Exhibits

Exhibit A           Form of Five Year Note
Exhibit B           Form of One Year Note
Exhibit C           Form of Employment Agreement
Exhibit D           Form of Opinion of Counsel to the Company and the
                      Shareholder
Exhibit E           Form of Opinion of Counsel to Purchaser and CDL
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.

                  TRANSFER IS ALSO RESTRICTED BY SECTION 6.04.

                                    7% SUBORDINATED CONVERTIBLE NOTE DUE 2003
                                     OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:    David L. Chesney
                                                           August 5, 1998

Address:              P.O. Box 1334                               No. N-1
                      Cary, NC  27512

Principal Amount:     $1,460,000                     Clifton,  New Jersey

Due:                  August 5, 2003

                  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"),  or his  registered
assign(s),  the principal sum above stated on August 5, 2003 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 October 1, 1998.

                  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 its conversion rights.

                                   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 any bank,  trust company,  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 of the
foregoing by 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 any other bank for working
capital, acquisition financing, capital improvements or the like).

                                    (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
                  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 (as
defined  herein) to cash,  securities  or other  property  otherwise  payable or
deliverable to the Holder of this Note.

                  In furtherance of this  Subordination  the Holder(s)  agree 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 its option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

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

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment of principal or interest on this Note or any other
                  Note issued by the Company to the Holder 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; or

                                    (e) the  holder  of any  Senior  Debt  shall
                  accelerate  payment of such Senior Debt  following an event of
                  default under such Senior Debt.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to its
rights and remedies under this Note, and any other  instruments,  the Holder may
at its option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder  to be due and  payable,  whereupon  the same shall  forthwith
mature  and become due and  payable  together  with  interest  accrued  thereon,
without any further notice to and without presentment, demand, protest or notice
of  protest,  all of which are hereby  waived.  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 its rights by suit in equity,  action at law
or other appropriate proceedings,  including, without limitation, action for the
specific  performance  of  any  agreement  contained  herein  or  in  any  other
instrument,  or for an injunction against a violation of any of the terms hereof
or  thereof,  or in aid of the  exercise of any right,  power or remedy  granted
hereby or by law, equity or otherwise.

                                  ARTICLE THREE

                         CONVERSION PRIVILEGE/OBLIGATION

                  The Company  hereby  grants to the Holder of this  Convertible
Note the right to convert 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 Six Dollars
and 00/100  ($6.00).  The right to convert may be exercised by the Holder at any
time after the date hereof up to and including, July 1, 2003, except as provided
herein.  The  number  of  shares of Common  Stock  into  which  this Note may be
converted shall be determined by taking (a) the sum of (1) the principal  amount
of this Note,  namely  $1,460,000,  and (2) any interest due and unpaid from the
date of  issue  to the  date  of  purchase,  and  dividing  said  sum 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
(a) the entire  amount due on the Note at the exercise  date less  $200,000 from
the date hereof  through July 1, 2003 and (b) the entire  amount due on the Note
at the exercise date if the exercise date is after July 1, 2003.  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 right to convert may be exercised  notwithstanding any limitation
on  the   Holder's   ability   to   receive   payments   pursuant   to   Article
One-Subordination.

                  The  Company  also shall  have the right to convert  this Note
into fully paid and non-assessable  shares of Common Stock at any time after the
Trigger Date at the Conversion  Price per share,  in accordance with the formula
provided above. The Company may convert all or any part of the amount due on the
Note.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first  business  day after the date on which the  average of the  closing  sales
prices as reported by the National  Association of Securities  Dealers over a 30
consecutive  trading  day  period  (which 30 day  period  begins  after the date
hereof)  equals or exceeds the Conversion  Price.  "Trading day" is defined as a
day on which trades may be made on the Nasdaq National Market.

                  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 this Note  shall not be  registered
                  in  the  name  of  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  after the Company
sends Holder its notice of exercise of the conversion privilege.

                  (b) Certificates  for the underlying  shares acquired 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).

                  (c)      If the Note is  converted in part prior to July 1,
2003, the Company shall so note in its records.

                  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  persons  to whom the  Note is  registered,  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 whole
or partial 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
registered  Holder(s)  thereof 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
initial  indebtedness  represented  hereby that number of shares of common stock
which he would have held had the entire 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  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  it
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,  except as set
forth in Article Five hereof.

                  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 it 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 its 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.

                  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."

                  Except as set forth in the Stock Purchase Agreement dated this
date (including the "SEC Documents" referred to therein),  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 that set
forth in the Stock Purchase Agreement, including the SEC Documents.

                                  ARTICLE FIVE

                               REGISTRATION RIGHTS

                  The Company  agrees to file a  registration  statement on Form
S-3 with  the  Securities  and  Exchange  Commission  ("Commission")  under  the
Securities  Act  covering the shares of Common Stock into which this Note may be
converted (i.e.,  the Underlying  Shares) within ninety (90) days after the date
hereof; and use its best efforts to cause such registration  statement to become
effective  as soon as  possible  thereafter  and to remain  effective  until the
Underlying  Shares  are  disposed  of by the  Shareholder  or,  if the  Note  is
satisfied without conversion of any part of it into Underlying Shares, until the
date of such  satisfaction.  The Company agrees to provide an opinion of counsel
to  each  broker  or  underwriter  effecting  a sale  of the  Underlying  Shares
confirming that the sale of such  Underlying  Shares may be made pursuant to the
registration statement.  The Company also agrees to comply, at its expense, with
any prospectus  delivery  requirements  applicable to the sale of the Underlying
Shares  pursuant  to  the  registration  statement.  The  Company  shall  not be
obligated to cause to become effective more than one registration statement with
respect to the Underlying Shares.

                  At any time and from time to time,  the Holder agrees  without
further  consideration,  to take such  actions and to execute  and deliver  such
documents as may be  reasonably  requested by the Company in order to effectuate
the purposes of this  Article  Five  including,  without  limitation,  supplying
information  with  respect to the Holder that may be  necessary  or required for
inclusion in the registration  statement.  In the event that such information or
other material  requested by the Company is not provided to the Company within a
reasonable  period of time following  delivery of written notice requesting such
information,  then the  Company's  obligations  under this Article Five shall be
suspended as to such Holder.

                  The Company will take such other actions reasonably  requested
by the  Holder  and  any  underwriter  it  engages  to  affect  the  sale of the
Underlying  Shares so as to comply with state  securities laws applicable to the
sale of the Underlying Shares pursuant to the registration statement.

                  The Company will pay all expenses  incurred in complying  with
Article Five hereof, including,  without limitation, all registration and filing
fees (including all expenses incident to filing with the National Association of
Securities Dealers,  Inc.),  reasonable fees and disbursements of counsel to the
Company,  securities  law and  blue sky fees and  expenses  (except  where  such
payment  is  prohibited  by  law or  applicable  regulation).  All  underwriting
discounts  and selling  commissions  applicable  to the sales of the  Underlying
Shares and any state or federal transfer taxes payable with respect to the sales
of the  Underlying  Shares and all fees and  disbursements  of  counsel  for the
Holder,  if any, in each case arising in  connection  with  registration  of the
Underlying Shares under Article Five hereof, shall be payable by the Holder.

                  If the  conversion  of the Note is made  pursuant  to a notice
that  stipulates  that it is to be effected in connection  with an  underwritten
offering of the  Underlying  Shares  registered  pursuant to this  Article,  the
conversion  notice (or Exercise  Agreement) may be conditioned  upon the closing
with the underwriter for the sale of the Underlying  Securities pursuant to such
offering to the extent  permitted by the SEC and applicable  securities laws, in
which case the Holder shall not be deemed to have  converted any portion of such
Note until  immediately  prior to the closing of the sale of  securities  upon a
firm commitment to buy.

                  The Company agrees to indemnify the  Shareholder  and hold him
harmless  from any loss,  claim or  liability  of any nature  arising out of any
allegation or finding of an untrue  statement of material fact  contained in the
registration  statement  (including  for  the  purpose  of  this  agreement  any
prospectus and all documents incorporated by reference), or of the omission of a
material fact required to be stated in the  registration  statement or necessary
to make the  statements  therein,  in the  light in which  they were  made,  not
misleading.  This indemnity  shall not apply to any loss,  claim or liability to
the  extent  arising  from  the  information  furnished  to the  Company  by the
Shareholder for use in the registration statement, or any misrepresentation made
by the  Shareholder  for which the Company  would not  otherwise  be required to
indemnify  the  Shareholder  under this  paragraph.  The  Shareholder  agrees to
indemnify the Company for any loss, claim or liability of any nature arising out
of any  allegation or finding of an untrue  statement of material fact contained
in  the  registration  statement  which  was  provided  to  the  Company  by the
Shareholder in writing.

                                   ARTICLE SIX

                                  MISCELLANEOUS

                  6.01  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.

                  6.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by federal express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Holder, at the address set forth on the first page hereof, or,

If to the Company:

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

                  6.03  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.

                  6.04  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
its successors and assigns.  Except as expressly permitted herein, this Note may
not be transferred or assigned prior to July 2, 2003. This is the Five Year Note
issued pursuant to a Stock Purchase Agreement dated this date among the Company,
the Holder and others, the terms of which are incorporated herein, including the
rights of offset of the Company and its Silver Star Express subsidiary.

                  6.05  Governing  Law.  This Note has been  executed in and
shall be governed by the laws of the State of New Jersey.

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

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

                               CONSOLIDATED DELIVERY & LOGISTICS, INC.

                               By: /s/ Albert W. Van Ness, Jr.
                                  Albert W. Van Ness, Jr., Chairman
Exhibit 10.3

                  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.

                  TRANSFER IS ALSO RESTRICTED BY SECTION 6.04.

                  7% CONTINGENT SUBORDINATED CONVERTIBLE NOTE DUE 1999
                     OF CONSOLIDATED DELIVERY & LOGISTICS, INC.

Registered Holder:    David L. Chesney
                                                                August 5, 1998

Address:              P.O. Box 1334                                   No. CN-1
                      Cary, NC  27512

Principal Amount:     Up to $500,000                      Clifton,  New Jersey

Due:                  November 1, 1999

                  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"),  or his  registered
assign(s),  the  principal  sum  above  stated  on  November  1, 1999 and to pay
interest on the finally-determined  principal amount hereof at the rate of seven
(7%)  percent per annum from the date  hereof.  All amounts  due  hereunder  are
subject to reduction  pursuant to Section 2.3(c) of the Stock Purchase Agreement
described in Section 6.04, which  provisions are  incorporated  herein as if set
forth in full,  and  Article  Three  below.  Interest  shall be  computed on the
principal  amount  hereof,  as it may be reduced from time to time,  and payable
upon maturity.

                  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  "Testing  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 its conversion rights.

                                   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 any bank,  trust company,  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 of the
foregoing by 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 debtor or financing from time to time
arranged by First  Union  Commercial  Corporation  or any other bank for working
capital, acquisition financing, capital improvements or the like).

                                    (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
                  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 (as
defined  herein) to cash,  securities  or other  property  otherwise  payable or
deliverable to the Holder of this Note.

                  In furtherance of this  Subordination  the Holder(s)  agree 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 its option, may declare all sums of
principal  and  accrued  interest  then  remaining  unpaid  hereon and all other
amounts payable hereunder immediately due and payable.

                  2.01 Events of Default

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

                                    (a)  the  Company  shall  fail  to  pay  any
                  installment  of  principal  or interest on this Note or on any
                  other  Note  issued  by the  Company  to the  Holder  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; or

                                    (e) the  holder  of any  Senior  Debt  shall
                  accelerate  payment of such Senior Debt  following an event of
                  default under such Senior Debt.

                  2.02  Remedies on Default

                  If an Event of Default shall have occurred, in addition to its
rights and remedies under this Note, and any other  instruments,  the Holder may
at its option by written  notice to the  Company  declare  all  indebtedness  to
Holder  hereunder to be due and payable  together with interest accrued thereon,
whereupon the same shall  forthwith  mature and become due and payable,  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  accrue on the amounts due  hereunder  at a rate of nine percent
(9%) per annum.

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

                                  ARTICLE THREE

                                  FORGIVENESS/
                         CONVERSION PRIVILEGE/OBLIGATION

                  A. Forgiveness or Reduction.  On or before the date forty-five
(45)  days  after  the end of the  one-year  period  ending  July 31,  1999 (the
"Measurement Period"), CDL shall determine: (A) the net earnings before interest
and taxes,  computed in accordance with generally accepted accounting principles
consistently applied ("EBIT") of KBD Services,  Inc., its subsidiary ("KBD") for
the Measurement  Period. If (x) the EBIT of KBD for the Measurement Period ("KBD
EBIT") does not exceed $200,000,  then this Contingent Convertible Note shall be
forgiven,  the principal amount automatically  reduced to zero as of the date of
issuance of this Note, and this Note shall be discharged in full and canceled.

                  If the KBD EBIT exceeds  $200,000 but does not equal or exceed
$700,000 (the "Benchmark") for the Measurement Period, then the principal amount
of this Note shall be reduced by an amount  equal to $700,000  less the KBD EBIT
for the Measurement  Period. By way of example,  if the KBD EBIT is $500,000 for
the Measurement  Period, then the principal amount of this Note shall be reduced
by $200,000, to a $300,000 principal amount.

                  CDL shall cause the books and records of KBD to be  maintained
as a separate profit center during the Measurement Period, so that the reduction
amount,  if any, can be  determined.  All  determinations  by CDL's  independent
public accountants hereunder shall be final and binding absent manifest error.

                  B. Conversion. The Company hereby grants to the Holder of this
Contingent  Convertible  Note the right to convert 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,  subject to the following
paragraphs. The "Conversion Price" is defined as Six Dollars and 00/100 ($6.00).

                  The right to  convert  may be  exercised  by the Holder at any
time after September 16, 1999 (the "Testing Date") up to and including,  October
20, 1999,  except as provided herein.  The number of shares of Common Stock into
which this Note may be converted  shall be  determined  by taking (a) the sum of
(1) the principal amount of this Note, as adjusted, and (2) any interest due and
unpaid from the date of issue to the date of  conversion,  and dividing said sum
by (b) the  Conversion  Price.  The right to convert may only be exercised  with
respect  to the  entire  amount  due on the Note (as it may  have  been  reduced
pursuant to Article  III(A) above) 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
right to convert may be exercised notwithstanding any limitation on the Holder's
ability to receive payments pursuant to Article One-Subordination.

                  The  Company  also shall  have the right to convert  this Note
into fully paid and non-assessable  shares of Common Stock at any time after the
later of the Trigger  Date and the Testing  Date,  at the  Conversion  Price per
share, in accordance with the formula  provided above. The Company also may only
convert with respect to the entire amount set forth above.

                  For purposes of this Note,  the "Trigger  Date" shall mean the
first  business  day after the date on which the  average of the  closing  sales
prices as reported by the National  Association of Securities  Dealers over a 30
consecutive  trading  day  period  (which 30 day  period  begins  after the date
hereof)  equals or exceeds the Conversion  Price.  "Trading day" is defined as a
day on which trades may be made on the Nasdaq National  Market.  All capitalized
terms used but not defined herein shall have the meanings set forth in the Stock
Purchase Agreement.

                  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 this Note  shall not be  registered
                  in  the  name  of  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  after the Company
sends Holder its notice of exercise of the conversion privilege.

                  (b) Certificates  for the underlying  shares acquired 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  persons  to whom the  Note is  registered,  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 whole
or partial 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
registered  Holder(s)  thereof 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
initial  indebtedness  represented  hereby that number of shares of common stock
which he would have held had the entire 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  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  it
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,  except as set
forth in Article Five hereof.

                  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 it 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 its 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.

                  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."

                  Except as set forth in the Stock Purchase Agreement dated this
date (including the "SEC Documents" referred to therein),  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 that set
forth in the Stock Purchase Agreement, including the SEC Documents.

                                  ARTICLE FIVE

                               REGISTRATION RIGHTS

                  The Company  agrees to file a  registration  statement on Form
S-3 with  the  Securities  and  Exchange  Commission  ("Commission")  under  the
Securities  Act  covering the shares of Common Stock into which this Note may be
converted (i.e.,  the Underlying  Shares) within ninety (90) days after the date
hereof; and use its best efforts to cause such registration  statement to become
effective  as soon as  possible  thereafter  and to remain  effective  until the
Underlying  Shares  are  disposed  of by the  Shareholder  or,  if the  Note  is
satisfied without conversion of any part of it into Underlying Shares, until the
date of such  satisfaction.  The Company agrees to provide an opinion of counsel
to  each  broker  or  underwriter  effecting  a sale  of the  Underlying  Shares
confirming that the sale of such  Underlying  Shares may be made pursuant to the
registration statement.  The Company also agrees to comply, at its expense, with
any prospectus  delivery  requirements  applicable to the sale of the Underlying
Shares  pursuant  to  the  registration  statement.  The  Company  shall  not be
obligated to cause to become effective more than one registration statement with
respect to the Underlying Shares.

                  At any time and from time to time,  the Holder agrees  without
further  consideration,  to take such  actions and to execute  and deliver  such
documents as may be  reasonably  requested by the Company in order to effectuate
the purposes of this  Article  Five  including,  without  limitation,  supplying
information  with  respect to the Holder that may be  necessary  or required for
inclusion in the registration  statement.  In the event that such information or
other material  requested by the Company is not provided to the Company within a
reasonable  period of time following  delivery of written notice requesting such
information,  then the  Company's  obligations  under this Article Five shall be
suspended as to such Holder.

                  The Company will take such other actions reasonably  requested
by the  Holder  and  any  underwriter  it  engages  to  affect  the  sale of the
Underlying  Shares so as to comply with state  securities laws applicable to the
sale of the Underlying Shares pursuant to the registration statement.

                  The Company will pay all expenses  incurred in complying  with
Article Five hereof, including,  without limitation, all registration and filing
fees (including all expenses incident to filing with the National Association of
Securities Dealers,  Inc.),  reasonable fees and disbursements of counsel to the
Company,  securities  law and  blue sky fees and  expenses  (except  where  such
payment  is  prohibited  by  law or  applicable  regulation).  All  underwriting
discounts  and selling  commissions  applicable  to the sales of the  Underlying
Shares and any state or federal transfer taxes payable with respect to the sales
of the  Underlying  Shares and all fees and  disbursements  of  counsel  for the
Holder,  if any, in each case arising in  connection  with  registration  of the
Underlying Shares under Article Five hereof, shall be payable by the Holder.

                  If the  conversion  of the Note is made  pursuant  to a notice
that  stipulates  that it is to be effected in connection  with an  underwritten
offering of the  Underlying  Shares  registered  pursuant to this  Article,  the
conversion  notice (or Exercise  Agreement) may be conditioned  upon the closing
with the underwriter for the sale of the Underlying  Securities pursuant to such
offering to the extent  permitted by the SEC and applicable  securities laws, in
which case the Holder shall not be deemed to have  converted  any portion of the
Note until  immediately  prior to the closing of the sale of  securities  upon a
firm commitment to buy.

                  The Company agrees to indemnify the  Shareholder  and hold him
harmless  from any loss,  claim or  liability  of any nature  arising out of any
allegation or finding of an untrue  statement of material fact  contained in the
registration  statement  (including  for  the  purpose  of  this  agreement  any
prospectus and all documents incorporated by reference), or of the omission of a
material fact required to be stated in the  registration  statement or necessary
to make the  statements  therein,  in the  light in which  they were  made,  not
misleading.  This indemnity  shall not apply to any loss,  claim or liability to
the  extent  arising  from  the  information  furnished  to the  Company  by the
Shareholder for use in the registration statement, or any misrepresentation made
by the  Shareholder  for which the Company  would not  otherwise  be required to
indemnify  the  Shareholder  under this  paragraph.  The  Shareholder  agrees to
indemnify the Company for any loss, claim or liability of any nature arising out
of any  allegation or finding of an untrue  statement of material fact contained
in  the  registration  statement  which  was  provided  to  the  Company  by the
Shareholder in writing.

                                   ARTICLE SIX

                                  MISCELLANEOUS

                  6.01  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.

                  6.02 Notices.  Any notice  herein  required or permitted to be
given shall be given by federal express or similar  overnight courier or by same
day courier service or by certified mail,  return receipt  requested,  if to the
Holder, at the address set forth on the first page hereof, or,

If to the Company:

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

                  6.03  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.

                  6.04  Assignability.  This  Note  shall  be  binding  upon the
Company,  its successors and assigns,  and shall inure to the benefit of Holder,
its successors and assigns.  Except as expressly permitted herein, this Note may
not be transferred  or assigned prior to October 21, 1999.  This is the One Year
Note issued  pursuant to a Stock  Purchase  Agreement  dated this date among the
Company,  the Holder and  others,  the terms of which are  incorporated  herein,
including  the  rights of offset of the  Company  and its  Silver  Star  Express
subsidiary.

                  6.05  Governing  Law.  This Note has been  executed in and
shall be governed by the laws of the State of New Jersey.

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

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

                              CONSOLIDATED DELIVERY & LOGISTICS, INC.

                              By: /s/ Albert W. Van Ness, Jr.
                                  Albert W. Van Ness, Jr., Chairman
Exhibit 99.1

FOR IMMEDIATE RELEASE,
CONTACT:
                                                                Desmond Towey
Mark Carlesimo, General Counsel                         Bernadette McLaughlin
Consolidated Delivery & Logistics, Inc.            Desmond Towey & Associates
TEL  (973) 471-1005                                       TEL  (212) 888-7600
FAX (973) 471-5519                                         FAX (212) 888-7686

                 CONSOLIDATED DELIVERY & LOGISTICS, INC ACQUIRES
                               KBD SERVICES, INC.

 * Southeast Based Courier Becomes Second Major Acquisition in the Last 30 Days*

Clifton, NJ (August 10, 1998) - Consolidated Delivery & Logistics, Inc. (NASDAQ:
CDLI) announced that it has acquired KBD Services, Inc. of Raleigh/Durham, North
Carolina.  KBD  Services,  Inc.  is a  ground-based  provider  of time  critical
delivery and scheduled  courier  services in the rapid growth North Carolina and
South Carolina markets with revenues in 1997 of approximately $6.6 million.

Albert W. Van Ness,  Jr.,  Chairman of CD&L said,  "We are extremely  pleased to
have KBD join the CD&L  family.  Mr.  David  Chesney,  who along  with his wife,
Sherry,  founded KBD (which is named after their three sons) 19 years ago,  will
continue to lead this southeast ground courier entity under its new CD&L banner.
Dave and Sherry's son Ken will also remain along with the  approximate  480 part
and full time employees. The KBD group are extremely hardworking, dedicated, and
experienced courier professionals and have created an exceptional transportation
service  to an  important  group of  businesses  throughout  KBD's  geographical
presence.  The Chesney family  operates about 240 vehicles and has facilities in
Cary,  Charlotte,  Fayetteville  and  Greensboro,  North  Carolina  as  well  as
Columbia, South Carolina and Augusta, Georgia."

In closing, Mr. Van Ness reiterated, "One of the Company's primary goals in 1998
and forward is to identify  strategically  smart  acquisitions  that will enable
CD&L to realize enhanced synergies in local, regional and national markets where
the company  currently  operates and, as  important,  to establish a presence in
promising new markets.  KBD fits the "new market"  strategic  profile and we are
enthusiastic  that this  acquisition,  combined  with the  previously  announced
acquisition of Boston based Metro Courier,  will add increased  customer courier
service coverage and provide important improvements to the earnings potential of
CD&L."

Consolidated Delivery & Logistics,  Inc. headquartered in Clifton, New Jersey is
a full service,  same day ground and air delivery and logistics  company with 60
offices in 23 states and the District of Columbia.  The Company has nearly 3,000
employees  and utilizes over 1,000  independent  contractors  in providing  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,
revenue  growth  and  acquisitions.  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
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 be able to profitably integrate KBD and Metro into the CD&L service
system or other risks specified in the Company's SEC filings.