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▇▇ ▇▇▇ ▇▇▇▇▇▇ Ventures, L.P.
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▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
October 23, 2003
Velocity Express Corporation
Four Paramount Plaza ▇▇▇▇
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Gentlemen:
1. Commitment. This letter (the "Letter Agreement") will
confirm the commitment of TH ▇▇▇ ▇▇▇▇▇▇ Ventures, L.P. ("THLI"), TH ▇▇▇ ▇▇▇▇▇▇
Parallel Ventures, L.P. ("THLIP"), THLi Coinvestment Partners LLC ("THLI
Coinvest") and Blue Star I, LLC (together with THLI, THLIP and THLI Coinvest,
the "Investors" or "us"), and their respective affiliates to provide or cause
others to provide up to $15,500,000 of equity financing (the "Financing") to
Velocity Express Corporation (the "Company"), in addition to the $ 3,000,000
already funded on October 20, 2003, and subject to the terms and conditions set
forth herein. The Financing will be provided in exchange for the Company's
Series I Convertible Preferred Stock, par value $.004 per share (the "Series I
Preferred") and will be on the same terms and conditions as the Series I
Preferred that the Company has or will issue to any other investors, provided
that the initial purchase price paid for the Series I Preferred by the Investors
shall, in all cases, be $ 1.50 per Series I Preferred share. Our commitment will
be reduced, dollar-for-dollar, for any equity financing received by the Company
after the date hereof from other investors (such amount, the "Commitment
Amount").
2. Conditions. Our commitment to fund any obligation
hereunder is subject to (i) all governmental and third party consents or
approvals that are required to be obtained in connection with the transactions
contemplated hereby shall have been received (ii) the execution of legal
documentation mutually acceptable to the Company and the Investors (iii) and the
unanimous approval of the board of directors of the Company of the Financing and
any transactions contemplated in connection therewith. The Financing will occur
at a time and place mutually acceptable to the Company and the Investors, but in
any event within three days of the date, on or after November 14, 2003, that the
Company declares the Series I Preferred Stock offering to be closed. In no event
shall the Investors be obligated to fund an amount in excess of the Commitment
Amount.
3. Termination. This commitment will be effective upon
the Company's acceptance of the terms and conditions of this letter agreement
and will expire, unless otherwise waived by the Investors, upon the earlier of
(i) December 15, 2003, (ii) the date on which the Company has received
$15,500,000 of equity financing in transactions consummated after the
date hereof, and (iii) the commencement of bankruptcy, insolvency or similar
proceedings (whether voluntary or involuntary) by the Company.
4. Governing Law. This Letter Agreement shall be
governed by and construed in accordance with the internal laws of the state of
New York (excluding the provisions of such laws regarding conflicts of law).
5. Assignment; Amendment and Waiver. Neither this Letter
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by the Investors or the Company without the prior written consent of
the other; provided, that the Investors shall be entitled to assign its
interests and obligations hereunder to any one or more of its affiliates without
obtaining any such consent of the Company. Any provision of this Letter
Agreement may be amended only with the prior written consent of the Investors
and the Company. Any provision of this Letter Agreement for the benefit of a
party hereto may be waived by such party (either generally or in particular and
either retroactively or prospectively), only by a written instrument signed by
the party waiving compliance.
6. Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and delivered personally,
sent by documented overnight delivery service or, to the extent receipt is
confirmed, telecopy, telefax or other electronic transmission service to the
Investors or the Company, as applicable, at the addresses or numbers set forth
above.
7. Complete Agreement. This Letter Agreement and the
other documents and writings referred to herein or delivered pursuant hereto
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
both written and oral, between the parties with respect to the subject matter
hereof and thereof.
8. No Third Party Beneficiaries. This Letter Agreement
is not intended and shall not be deemed to confer any benefit upon any person or
entity other than the parties hereto.
9. Headings. The headings contained in this Letter
Agreement are for reference only and shall not affect in any way the meaning or
interpretation of this Letter Agreement.
10. Confidentiality. Neither the Company nor the
Investors nor any of their respective representatives or affiliates shall
disclose to any third party the terms or existence of this agreement without the
written consent of the other, except as otherwise required by law.
Very truly yours,
[SIGNATURES PAGES TO FOLLOW]
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TH ▇▇▇ ▇▇▇▇▇▇ VENTURES, L.P.
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, L.P.,
its general partner
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, LLC,
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
TH ▇▇▇ ▇▇▇▇▇▇ PARALLEL VENTURES, L.P.
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, L.P.,
its general partner
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, LLC,
its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
THLi COINVESTMENT PARTNERS, LLC
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, L.P., its
general partner
By: TH ▇▇▇ ▇▇▇▇▇▇ Fund Advisors, LLC, its
general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
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BLUESTAR I, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇
Title: Managing Member
Agreed and Accepted:
VELOCITY EXPRESS CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Name:
Title:
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