Exhibit 12
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 23rd day of April 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, 1,918,333
shares of the Company's Series J Convertible Preferred Stock,
par value $0.004 per share (the "Shares" or "Series J
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 J 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 J
Preferred Stock and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares
authorized for issuance to 500,000,000 shares, of which
425,000,000 shares are Common Stock and 25,000,000 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 $2,877,500 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 J Preferred if they
deem such action necessary or appropriate to obtain sufficient
funding for the Company, the Series J 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 J 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 J Preferred
shall be used for the general corporate purposes of the
Company and will not be held in a segregated account;
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(j) That there is no minimum amount for the Company's offering of
the Series J Preferred and that there can be no assurance that
the offering of the Series J 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.
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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 J
Preferred Stock and (ii) the amendment of the Company's
Certificate of Incorporation to increase the number of shares
authorized for issuance to 500,000,000 shares, of which
425,000,000 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 ________
If yes, list the affiliated member firm or person:___
_____________________________________________________
_____________________________________________________
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
_____ 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.
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SIGNATURE PAGE
Dated: April 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
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
___________________________________________
Name: Xxxx Xxxxx
Title: Principal
Blue Star I, LLC
By:____________________________
Name: Xxxxxx H, Xxx
Title: Sole Member
--------------------------------------------------------------------------------
* Multiple signature required
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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
__________, 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)
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ACCEPTANCE BY THE COMPANY
Velocity Express Corporation hereby accepts the foregoing subscription
to the extent of 1,918,333 Shares and shall issue such Shares upon shareholder
approval of (i) the issuance of the Series J Preferred Stock and (ii) the
amendment of the Company's Certificate of Incorporation to increase the number
of shares authorized for issuance to 500,000,000 shares, of which 425,000,000
shares are Common Stock and 75,000,000 shares are Preferred Stock, at a meeting
of the Company's shareholders.
Velocity Express Corporation
By ________________________________
Xxxxxx X. Xxxxxxxxxx
General Counsel and Secretary
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