Exhibit 15
IMPORTANT: PLEASE READ CAREFULLY BEFORE SIGNING: SIGNIFICANT
REPRESENTATIONS ARE CALLED FOR HEREIN.
VELOCITY EXPRESS CORPORATION
STOCK PURCHASE AGREEMENT
Velocity Express Corporation
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Ladies and Gentlemen:
THIS STOCK PURCHASE AGREEMENT (the "Purchase Agreement"), made effective
this 23 day of August, by and between Velocity Express Corporation, a Delaware
corporation (the "Company"), and TH Xxx Xxxxxx Ventures, L.P., TH Xxx Xxxxxx
Parallel Ventures, L.P., THLi Coinvestment Partners, LLC and Blue Star I, LLC
(collectively referred to herein as "undersigned" or "THLPV").
1. (a) The Company agrees to sell to the undersigned, and the undersigned
agrees to purchase from the Company, 7,266,666 shares of the
Company's Series K Convertible Preferred Stock, par value $0.004 per
share (the "Shares" or "Series K Preferred") for the subscription
price per Share listed in paragraph 1(b) below. The rights and
preferences of the Shares are set forth in the Certificate of
Designation of Preferences and Rights of Series K Convertible
Preferred Stock as set forth in Appendix A attached hereto. The
undersigned acknowledges that this subscription is contingent upon
acceptance in whole or in part by the Company and upon shareholder
approval of (i) the issuance of the Series K Preferred Stock and
(ii) the amendment of the Company's Certificate of Incorporation to
increase the number of shares authorized for issuance to 760,000,000
shares, of which 700,000,000 shares are Common Stock and 60000,000
shares are Preferred Stock, at a meeting of the Company's
shareholders or by written consent. Concurrent with the delivery of
this Agreement, the undersigned has delivered cash, wire transfer or
other satisfactory consideration to the Company in the amount of
$10,900,000 for payment of the full purchase price of the Shares.
(b) Subject to the Board of Directors of the Company varying the
purchase price per share of the Series K Preferred if they deem such
action necessary or appropriate to obtain sufficient funding for the
Company, the Series K Preferred Purchase Price shall be $1.50 per
Share;
(c) The Company and the undersigned agrees that if the shareholder
approval specified in paragraph 1(a) above is not achieved, the
Company will return to the undersigned, without interest or
deduction, any Purchase Price tendered by the undersigned for the
purchase of the Series K Preferred.
2. The undersigned acknowledges and represents as follows:
(a) That the undersigned has had an opportunity to carefully review the
Company, has had the opportunity to conduct due diligence on the
Company, has had the opportunity to review its public filings with
the Securities and Exchange Commission and has reviewed the Risk
Factors, attached hereto as Appendix B, relating to the Company (the
"Company Materials"), and all documents delivered therewith or
reasonably requested by the undersigned;
(b) That the undersigned is able to bear the economic risk of the
investment in the Shares;
(c) That the undersigned has knowledge and experience in financial and
business matters, that the undersigned is capable of evaluating the
merits and risks of the prospective investment in the Shares and
that the undersigned is able to bear such risks.
(d) That the undersigned understands an investment in the Shares is
highly speculative but believes that the investment is suitable for
the undersigned based upon the investment objectives and financial
needs of the undersigned, and has adequate means for providing for
his, her or its current financial needs and personal contingencies
and has no need for liquidity of investment with respect to the
Shares;
(e) That the undersigned has been given access to full and complete
information regarding the Company (including the opportunity to meet
with Company officers and review such documents as the undersigned
may have requested in writing) and has utilized such access to the
satisfaction of the undersigned for the purpose of obtaining
information in addition to, or verifying information included in,
the Company Materials;
(f) That the undersigned recognizes that the Shares, are an investment,
involve a high degree of risk, including, but not limited to, the
risks described in the Company Materials;
(g) That the undersigned realizes that (i) the purchase of Shares is a
long-term investment; (ii) the purchasers of the Shares must bear
the economic risk of investment for an indefinite period of time
because the Shares have not been registered under the Securities Act
of 1933, as amended (the "Act") and, therefore, cannot be sold
unless they are subsequently registered under the Act, or an
exemption from such registration is available; and (iii) the
transferability of the Shares is restricted, and (A) requires the
written consent of the Company, (B) requires conformity with the
restrictions contained in paragraph 3 below, and (C) will be further
restricted by a legend placed on the certificate(s) representing the
Shares stating that the Shares have not been registered under the
Act and referring to the restrictions on transferability of the
Shares, and by stop transfer orders or notations on the Company's
records referring to the restrictions on transferability;
(h) That the undersigned is a bona fide resident of, and is domiciled
in, the state or country listed in the Recital to this Agreement and
that the Shares are being purchased solely for the beneficial
interest of the undersigned and not as nominee, for, or on behalf
of, or for the beneficial interest of, or with the intention to
transfer to, any other person, trust or organization, except as
specifically set forth in paragraph 4 of this Purchase Agreement;
(i) That pending shareholder authorization specified in paragraph 1(a)
above, the Purchase Price received by the Company pursuant to this
Purchase Agreement and other stock purchase agreements for the
subscription of the Series K Preferred shall be used for the general
corporate purposes of the Company and will not be held in a
segregated account;
(j) That there is no minimum amount for the Company's offering of the
Series K Preferred and that there can be no assurance that the
offering of the Series K Preferred will result in a total proceeds
to the Company of any set amount; and
(k) That the undersigned constitutes an accredited investor as defined
in Rule 501(a) under the Securities Act of 1933.
3. The undersigned has been advised that the Shares are not being
registered under the Act or any other securities laws pursuant to
exemptions from the Act and such laws, and that the Company's
reliance upon such exemptions is predicated in part on the
undersigned's representations to the Company as contained herein.
The undersigned represents and warrants that the Shares are being
purchased for his, her or its own account and for investment and
without the intention of reselling or redistributing the same, that
he, she or it has made no agreement with others regarding any of
such Shares and that his, her or its financial condition is such
that it is not likely that it will be necessary to dispose of any of
such Shares in the foreseeable future. The undersigned is aware
that, in the view of the Securities and Exchange Commission, a
purchase of Shares with an intent to resell by reason of any
foreseeable specific contingency or anticipated change in market
value, or any change in the condition of the Company or its
business, or in connection with a contemplated liquidation or
settlement of any loan obtained for the acquisition of the Shares
and for which the Shares were pledged as security, would represent
an intent inconsistent with the representations set forth above. The
undersigned further represents and agrees that if, contrary to his,
her or its foregoing intentions, he, she or it should later desire
to dispose of or transfer any of such Shares in any manner, he, she
or it shall not do so without first obtaining (a) the opinion of
counsel designated by the Company that such proposed disposition or
transfer lawfully may be made without the registration of such
Shares for such purpose pursuant to the Act, as then in effect, and
any other applicable securities laws, or (b) such registrations (it
being expressly understood that the Company shall not have any
obligation to register the Shares for such purpose).
The undersigned agrees that the Company may place a
restrictive legend on the certificate(s) representing the Shares,
containing substantially the following language:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"),
AND WITHOUT REGISTRATION UNDER ANY OTHER SECURITIES LAWS, IN
RELIANCE UPON EXEMPTIONS CONTAINED IN THE ACT AND SUCH LAWS.
NO TRANSFER OF THESE SECURITIES OR ANY INTEREST THEREIN MAY BE
MADE IN THE ABSENCE OF EITHER AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND UNDER THE APPLICABLE STATE
SECURITIES LAWS, OR AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION
UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES LAWS.
FURTHER, THESE SECURITIES ARE SUBJECT TO LIMITATIONS ON
CONVERTIBILITY AS SET FORTH IN THE STOCK PURCHASE AGREEMENT
APPLICABLE TO THE ISSUANCE OF THESE SECURITIES AND THE
CERTIFICATE OF DESIGNATION OF THOSE SECURITIES.
The undersigned agrees and consents that the Company may place
a stop transfer order on the certificate(s) representing the Shares
to assure the undersigned's compliance with this Agreement and the
matters referenced above.
The undersigned agrees to save and hold harmless, defend and
indemnify the Company and its directors, officers and agents from
any claims, liabilities, damages, losses, expenses or penalties
arising out of any misrepresentation of information furnished by the
undersigned to the Company in this Agreement.
The undersigned understands that the Company at a future date may
file a registration or offering statement (the "Registration
Statement") with the Securities and Exchange Commission to
facilitate a public offering of its securities. The undersigned
agrees, for the benefit of the Company, that should an underwritten
public offering be made and should the managing underwriter of such
offering require, the undersigned will not, without the prior
written consent of the Company and such underwriter, during the Lock
Up Period as defined herein: (a) sell, transfer or otherwise dispose
of, or agree to sell, transfer or otherwise dispose of any of the
Shares beneficially held by the undersigned during the Lock Up
Period; (b) sell, transfer or otherwise dispose of, or agree to
sell, transfer or otherwise dispose of any options, rights or
warrants to purchase any of the Shares beneficially held by the
undersigned during the Lock Up Period; or (c) sell or grant, or
agree to sell or grant, options, rights or warrants with respect to
any of the Shares. The foregoing does not prohibit gifts to donees
or transfers by will or the laws of descent to heirs or
beneficiaries provided that such donees, heirs and beneficiaries
shall be bound by the restrictions set forth herein. The term "Lock
Up Period" shall mean the lesser of (x) 240 days or (y) the period
during which Company officers and directors are restricted by the
managing underwriter from effecting any sales or transfers of the
Company's securities. The Lock Up Period shall commence on the
effective date of the Registration Statement.
The undersigned has read and executed the Registration Rights
Agreement in the form appended hereto as Appendix C. The undersigned
agrees that,
notwithstanding any registration rights granted under the
Registration Rights Agreement, the undersigned will not be entitled
to any registration rights, whether by demand, piggyback or
otherwise, until the shareholder approval of (i) the issuance of the
Series K Preferred Stock and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares
authorized for issuance to 760,000,000 shares, of which 700,000,000
shares are Common Stock and 60,000,000 shares are Preferred Stock,
at a meeting of the Company's shareholders or by written consent has
been obtained.
4. NASD Affiliation. The undersigned is affiliated or associated,
directly or indirectly, with a National Association of Securities
Dealers, Inc. ("NASD") member firm or person.
Yes ________ No ________
If yes, list the affiliated member firm or person:____________
______________________________________________________________
______________________________________________________________
Your relationship to such member firm or person:______________
______________________________________________________________
______________________________________________________________
5. Entities. If the undersigned is not an individual but an entity, the
individual signing on behalf of such entity and the entity jointly
and severally agree and certify that:
A. The undersigned was not organized for the specific purpose of
acquiring securities of the Company; and
B. This Agreement has been duly authorized by all necessary action on
the part of the undersigned, has been duly executed by an authorized
officer or representative of the undersigned, and is a legal, valid
and binding obligation of the undersigned enforceable in accordance
with its terms.
6. The undersigned agrees that he/she or it shall not disclose either
the existence, the contents or any of the terms and conditions of
this Purchase Agreement to any other person.
7. Miscellaneous.
A. Manner in which title is to be held: (check one)
_____ Individual Ownership
_____ Joint Tenants with Right of Survivorship*
_____ Partnership*
_____ Tenants in Common*
_____ Corporation
_____ Trust
_____ Other ______________________________________________
____________________________________________________(describe)
B. The undersigned agrees that the undersigned understands the meaning
and legal consequences of the agreements, representations and
warranties contained herein, agrees that such agreements,
representations and warranties shall survive and remain in full
force and effect after the execution hereof and payment for the
Shares, and further agrees to indemnify and hold harmless the
Company, each current and future officer, director, employee, agent
and shareholder from and against any and all loss, damage or
liability due to, or arising out of, a breach of any agreement,
representation or warranty of the undersigned contained herein.
C. This Agreement shall be construed and interpreted in accordance with
Minnesota law without regard to conflict of law provisions.
D. The undersigned agrees to furnish to the Company, upon request, such
additional information as may be deemed necessary to determine the
undersigned's suitability as an investor.
________________________________
* Multiple signatures required
SIGNATURE PAGE
Dated: August 23, 2004
TH Xxx Xxxxxx Ventures, L.P.
(f/k/a TH Xxx.Xxxxxx Internet Partners, L.P.)
By: TH Xxx Xxxxxx Fund Advisors, L.P., its General Partner
By: TH Xxx Xxxxxx Fund Advisors, LLC., its General Partner
/s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Principal
TH Xxx Xxxxxx Parallel Ventures, L.P.
(f/k/a TH Xxx.Xxxxxx Internet Parallel Partners, L.P.)
By: TH Xxx Xxxxxx Fund Advisors, L.P., its General Partner
By: TH Xxx Xxxxxx Fund Advisors, LLC., its General Partner
/s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Principal
THLi Coinvestment Partners, LLC
/s/ Xxxx Xxxxx
-------------------------------------
Name: Xxxx Xxxxx
Title: Principal
Blue Star I, LLC
By: /s/ Xxxxxx X. Xxx
----------------------------------
Name: Xxxxxx X. Xxx
Title: Sole Member
CERTIFICATE OF SIGNATORY
(To be completed if Shares are being subscribed by an entity.)
I, ________________________, am the ______________, ____________________
(the "Entity").
I certify that I am empowered and duly authorized by the Entity to execute
and carry out the terms of the Stock Purchase Agreement, dated __________,
200__, by and between Velocity Express Corporation and the Entity to purchase
and hold the Shares, and certify further that the Stock Purchase Agreement has
been duly and validly executed on behalf of the Entity and constitutes a legal
and binding obligation of the Entity.
IN WITNESS WHEREOF, I have set my hand this _____ day of _____, 200__.
____________________________________
(Signature)
____________________________________
(Title)
____________________________________
(Please Print Name)
ACCEPTANCE BY THE COMPANY
Velocity Express Corporation hereby accepts the foregoing subscription to
the extent of 7,266,666 Shares and shall issue such Shares upon shareholder
approval of (i) the issuance of the Series K Preferred Stock and (ii) the
amendment of the Company's Certificate of Incorporation to increase the number
of shares authorized for issuance to 760,000,000 shares, of which 700,000,000
shares are Common Stock and 60,000,000 shares are Preferred Stock, at a meeting
of the Company's shareholders.
Velocity Express Corporation
By___________________________________
Xxxxxx X. Xxxxxxxxxx
General Counsel and Secretary
