Exhibit 10.41
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 21st day of December 2004, 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, 7,000,000 shares of the Company's
Series L Convertible Preferred Stock, par value $0.004 per share (the
"Shares" or "Series L 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 L 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 L Preferred Stock and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares
authorized for issuance to allow for the issuance of the Series L
Preferred Stock and shares of Common Stock into which it can be
converted, at a meeting of the Company's shareholders or by written
consent. Concurrent with the delivery of this Agreement, the
undersigned has delivered cash, converted debt obligations or other
satisfactory consideration to the Company in the amount of $7,000,000
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 L Preferred if they deem such action
necessary or appropriate to obtain sufficient funding for the Company,
the Series L Preferred Purchase Price shall be $1.00 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 L 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 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 L 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 L Preferred and that there can be no assurance that the
offering of the Series L 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 agrees to read and execute a Registration Rights
Agreement in the form identical to that appended as Appendix C to the
undersigned's investment in the the Company's Series K Convertible
Preferred Stock. 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 L Preferred Stock and (ii) the amendment of the
Company's Certificate of Incorporation to increase the number of
shares authorized for issuance to allow for the issuance of the Series
L Preferred Stock and shares of Common Stock into which it can be
converted, at a meeting of the Company's shareholders or by written
consent has been obtained.
The undersigned acknowledges that it has had full disclosure regarding
the terms of investment in the Company's Series M Convertible
Preferred Stock and related Convertible Note, including the
requirement that the undersigned convert all shares of Series L
Preferred Stock to common stock upon shareholder approval of the
Series M transaction.
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)
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
SIGNATURE PAGE
Dated: December 20, 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
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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
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Name: Xxxx Xxxxx
Title: Principal
THLi Coinvestment Partners, LLC
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Name: Xxxx Xxxxx
Title: Principal
Blue Star I, LLC
By:
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Name: Xxxxxx H, Xxx
Title: Sole Member
CERTIFICATE OF SIGNATORY
(To be completed if Shares are being subscribed by an entity.)
I, , am the ,
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(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 ,
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200 , by and between Velocity Express Corporation and the Entity to purchase
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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 .
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(Signature)
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(Title)
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(Please Print Name)
ACCEPTANCE BY THE COMPANY
Velocity Express Corporation hereby accepts the foregoing subscription to
the extent of 7,000,000 Shares and shall issue such Shares upon shareholder
approval of (i) the issuance of the Series L Preferred Stock and (ii) the
amendment of the Company's Certificate of Incorporation to increase the number
of shares authorized for issuance to allow for the issuance of the Series L
Preferred Stock and shares of Common Stock into which it can be converted, at a
meeting of the Company's shareholders.
Velocity Express Corporation
By
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Xxxxxx X. Xxxxxxxxxx
General Counsel and Secretary
