EXHIBIT 8
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 20th day of October 2003, 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"), each with a
principal place of business in New York.
1. (a) The Company agrees to sell to the undersigned, and the
undersigned agrees to purchase from the Company, 2,000,000 shares of
the Company's Series I Convertible Preferred Stock, par value $0.004
per share (the "Shares" or "Series I 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 I
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 I
Preferred Stock and (ii) the amendment of the Company's Certificate
of Incorporation to increase the number of shares authorized for
issuance to 400,000,000 shares, of which 325,000,000 shares are
Common Stock and 75,000,000 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
or a check or wire transfer to the Company in the amount of $
3,000,000 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 I Preferred if they deem such
action necessary or appropriate to obtain sufficient funding for the
Company, the Series I Preferred shall be sold at the following price
per Share (the "Purchase Price"):
- if this Purchase Agreement is executed and the payment of the
Purchase Price is tendered to the Company on or before October 24,
2003, the Purchase Price shall be $1.50 per Share;
- if this Purchase Agreement is executed and the payment of the
Purchase Price is tendered to the Company after October 24, 2003,
but on or before October 31, 2003, the Purchase Price shall be $1.80
per Share;
- if this Purchase Agreement is executed and the payment of the
Purchase Price is tendered to the Company after October 31, 2003,
but on or before November 14, 2003, the Purchase Price shall be
$2.20 per Share; and
- if this Purchase Agreement is executed and the payment of the
Purchase Price is tendered to the Company after November 14, 2003,
but on or before November 28, 2003, the Purchase Price shall be
$3.30 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 I 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 and is aware of the fact
that the Company may use a portion of the funds generated from the
sale of the Series I Preferred to replace certain letters of credit
totally $7.1 million currently maintained by the Company and
guaranteed by TH Xxx Xxxxxx Ventures;
(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
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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 I Preferred shall be used for the general
corporate purposes of the Company and will not be held in a
segregated account;
(j) That the Company did not solicit the undersigned in connection with
its rights offering described in the Company's Registration
Statement filed on October 1, 2003, (File Number 333-109362) and
which was later withdrawn;
(k) That there is no minimum amount for the Company's offering of the
Series I Preferred and that there can be no assurance that the
offering of the Series I Preferred will result in a total proceeds
to the Company of any set amount; and
(l) 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
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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.
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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 I Preferred Stock and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares
authorized for issuance to 400,000,000 shares, of which 325,000,000
shares are Common Stock and 75,000,000 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
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If yes, list the affiliated member firm or person:
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Your relationship to such member firm or person:
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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
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Joint Tenants with Right of Survivorship*
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Partnership*
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Tenants in Common*
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Corporation
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Trust
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Other
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describe)
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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.
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* Multiple signatures required
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SIGNATURE PAGE
Accepted as of October 20, 2003
------------------------------------
Velocity Express Corporation
By:
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
------------------------------------
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
------------------------------------
Name: Xxxx Xxxxx
Title: Principal
THLi Coinvestment Partners, LLC
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Name: Xxxx Xxxxx
Title: Principal
Blue Star I, LLC
By:
---------------------------------
Name: Xxxxxx H, Xxx
Title: Sole Member
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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 , 2003,
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 , 2003.
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(Signature)
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(Title)
----------------------------------------
(Please Print Name)
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ACCEPTANCE BY THE COMPANY
Velocity Express Corporation hereby accepts the foregoing subscription to
the extent of 2,000,000 Shares and shall issue such Shares upon shareholder
approval of (i) the issuance of the Series I Preferred Stock and (ii) the
amendment of the Company's Certificate of Incorporation to increase the number
of shares authorized for issuance to 400,000,000 shares, of which 325,000,000
shares are Common Stock and 75,000,000 shares are Preferred Stock, at a meeting
of the Company's shareholders to be held no later than [January 31, 2004] or by
written consent executed no later than [January 31, 2004].
Velocity Express Corporation
By
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Xxxxxx X. Xxxxxxxxxx
General Counsel and Secretary
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