Exhibit 10.1

 

VOTING AGREEMENT

 

This Voting Agreement (this “Agreement”) dated February 10, 2005 is entered into
among Velocity Express Corporation, a Delaware corporation (the “Company”), and
Special Situations Fund III, L.P., Special Situations Cayman Fund, L. P.,
Special Situations Private Equity Fund, L.P., Scorpion Capital Partners, L.P.,
Scorpion Acquisition, LLC, Pequot Scout Fund, L.P., Pequot Navigator Onshore
Fund, L.P., Pequot Navigator Offshore Fund, Inc., Premium Series PCC Limited –
Cell 33, TH Lee Putnam Ventures, L.P., TH Lee Putnam Parallel Ventures, L.P.,
THLi Coinvestment Partners, LLC, Blue Star I, LLC, Jack Duffy, Dolph DiBiaso,
Vincent Wasik, Palm Beach Overseas Investors, Limited, Andrew Boszhardt, BNS
Long Short Fund, William S. Lapp, Steven Cristaldi, Alexander Paluch, Ray A.
Mirza, BPEF 2 Pegasus Limited, East River II, L.P. and TerraNova Capital (each
individually a “Stockholder” and collectively, the “Stockholders”).

 

In consideration of the mutual promises made herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1. Certain Definitions.

 

As used in this Agreement, the following terms shall have the following
meanings:

 

“Common Stock” means the common stock, $0.004 par value per share, of the
Company.

 

“Effective Date” means the date of this Agreement.

 

“Excess Shares” means, with respect to any Stockholder at any time, the shares
of Preferred Stock constituting the difference obtained by subtracting (i) the
Voting Shares held by such Stockholder from (ii) the total Preferred Shares held
by such Stockholder. The number of Excess Shares held by each Stockholder (other
than TerraNova Capital) as of the date hereof, assuming that the Preferred
Shares were issued on the same day the Stockholder entered into the Purchase
Agreement, is set forth on Schedule 1 appended hereto.

 

“Nasdaq” means The Nasdaq Stock Market or any successor thereto.

 

“Purchase Agreement” means that certain Purchase Agreement, dated as of December
21, 2004, by and among the Company and certain of the Stockholders.

 

“Preferred Shares” means shares of Series M Convertible Preferred Stock, $0.004
par value per share, of the Company. The number of Preferred Shares held by each
Stockholder (other than TerraNova Capital) as of the date hereof, assuming that
the Preferred Shares were issued on the same day the Stockholder entered into
the Purchase Agreement, is set forth on Schedule 1 appended hereto.

 

“Voting Shares” means, with respect to any Stockholder at any time, the
Preferred Shares constituting the product (rounded off to the nearest whole
number, with fractional

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amounts equal to 0.50 rounded up) obtained by multiplying (i) the total
Preferred Shares held by such Stockholder, including Preferred Shares received
as dividend on other Preferred Shares, by (ii) 0.30708. The number of Voting
Shares held by each Stockholder (other than TerraNova Capital) as of the date
hereof, assuming that the Preferred Shares were issued on the same day the
Stockholder entered into the Purchase Agreement, is set forth on Schedule 1
appended hereto. The parties hereto acknowledge and agree that any and all of
the Stockholders may agree to deem any number of Voting Shares held by any
Stockholder party to such agreement to be Excess Shares and an equal number of
Excess Shares held by any Stockholder party to such agreement to be Voting
Shares; provided, that, the total number of Voting Shares held by such
Stockholders after such agreement does not exceed the total number of Voting
Shares held by such Stockholders prior to such agreement. No such agreement
shall be effective unless and until the Company has received written notice
(executed by all Stockholders party to such agreement) thereof.

 

2. Voting. Each Stockholder covenants and agrees that, from and after the
Effective Date and until the termination of this Agreement in accordance with
the terms hereof (the “Term”), at any meeting of stockholders of the Company,
however called, and in any action by written consent of stockholders of the
Company, such Stockholder will not vote, or cause to be voted (by means of
proxy, voting trust, voting agreement or otherwise), Preferred Shares, other
than the Voting Shares held by such Stockholder, on any matter on which the
holders of Preferred Shares vote together with the holders of the Common Stock
(and any other class or series of capital stock of the Company) as a single
class. When voting the Voting Shares on any matter on which the holders of
Preferred Shares vote together with the holders of the Common Stock (and any
other class or series of capital stock of the Company) as a single class, each
Stockholder covenants and agrees that, during the Term, the voting rights under
the Voting Shares shall be calculated without regard to the adjustment of
conversion price pursuant to Section 4C of the Certificate of Designation of the
Preferred Shares. Notwithstanding the foregoing, nothing in this Agreement shall
restrict any Stockholder from voting or causing to be voted at any meeting of
stockholders of the Company or in any action by written consent of stockholders
of the Company (i) any Preferred Shares (including, without limitation, any
Excess Shares) on any matter upon which the holders of Preferred Shares are
voting as a separate class, solely to the extent such holders of Preferred
Shares are voting as a separate class and (ii) any shares of Common Stock,
whether acquired upon conversion of Preferred Shares or otherwise.

 

3. Term. This Agreement shall become effective on the Effective Date. This
Agreement shall terminate as to any Stockholder (i) upon receipt by the Company
of written notification from Nasdaq that the ownership and voting of the
Preferred Shares (including, without limitation, the Excess Shares) by the
Stockholders does not conflict with Nasdaq Marketplace Rule 4351 or any
successor thereto, (ii) upon the conversion of all Preferred Shares owned by
such Stockholder into Common Stock pursuant to the terms of the Preferred Shares
or (iii) upon such Stockholder no longer owning any Preferred Shares.

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4. Legend. Each certificate representing Preferred Shares held by a Stockholder
shall bear a legend substantially in the following form:

 

“The securities represented by this certificate are subject to a voting
agreement with Velocity Express Corporation, a copy of which is available for
inspection at the office of the Secretary of Velocity Express Corporation.”

 

Promptly following the execution of this Agreement, each Stockholder will return
to the Company any and all certificates representing shares held by such
Stockholder so that the Company may place thereon the legend required by this
Section 4. The legend required by this Section 4 shall be removed from
certificates representing Preferred Shares held by a Stockholder at the request
of such Stockholder, upon the termination of this Agreement and the delivery to
the Company of such certificates.

 

5. No Revocation. This Agreement shall be deemed to be coupled with an interest
and may not be revoked, except with the written consent of the Company.

 

6. Successors and Assigns. This Agreement shall inure to the benefit of the
successors and assigns of the Company and be binding upon the Stockholders and
each of their respective heirs, executors, administrators, successors and
assigns. Any sale or other transfer of any Preferred Shares shall be null and
void, unless and until the transferee agrees in a writing, delivered to the
Company, to be bound by the terms of this Agreement, which writing shall also
contain notice to the Company of such transfer and of the notice information for
such transferee.

 

7. No Other Issuances Outside this Agreement. The Company and the Stockholders
agree that no issuance of Preferred Shares shall be made unless and until the
recipient of the Preferred Shares are bound by the terms of this Agreement or
agrees in a writing, delivered to the Company, to be bound by the terms of this
Agreement.

 

8. Specific Performance. The parties hereto agree that irreparable damage would
occur in the event any provision of this Agreement were not performed in
accordance with the terms hereof. In the event of any breach of this Agreement,
in addition to any and all other remedies available at law, the parties hereto
shall be entitled to specific performance of this Agreement and to such other
injunctive or equitable remedy as may be granted by a court of competent
jurisdiction.

 

9. Notices. All notices and other communications provided for or permitted under
this Agreement shall be made as set forth in Section 9.4 of the Purchase
Agreement.

 

10. Amendment. Any term of this Agreement may be amended and the observance of
any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with the written
consent of the Company and the holders of at least 80% of the Preferred Shares
then subject to this Agreement. Any amendment of waiver effected in accordance
with this Section 10 shall be binding upon each holder of Preferred Shares, each
future holder of all such Preferred Shares and the Company.

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11. Applicable Law. This Agreement shall be governed by and construed in
accordance with, the laws of the State of Delaware without regard to principles
of conflicts of laws.

 

12. Severability. Any provision of this Agreement that is prohibited or
unenforecable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof but shall be interpreted as if it were written so as
to be enforceable to the maximum extent permitted by applicable law, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the parties hereto hereby waive any provision of
law which renders any provisions hereof prohibited or unenforceable in any
respect.

 

13. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may also be executed via
facsimile, which shall be deemed an original.

 

14. Entire Agreement. This Agreement represents the complete agreement of the
parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings relating to the subject matter hereof.

 

15. Conflicts. If there is any conflict between the terms of this Agreement and
the Purchase Agreement (or any agreement entered into pursuant to the Purchase
Agreement), the terms of this Agreement shall control.

 

16. Titles and Subtitles. The titles and subtitles used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

COMPANY: VELOCITY EXPRESS CORPORATION By:  

 

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Name:     Title:     STOCKHOLDERS: SPECIAL SITUATIONS FUND III, L.P. By:  

 

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Name:     Title:     SPECIAL SITUATIONS CAYMAN FUND, L.P. By:  

 

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Name:     Title:     SPECIAL SITUATIONS PRIVATE EQUITY FUND, L.P. By:  

 

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Name:     Title:    

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SCORPION CAPITAL PARTNERS, L.P. By:  

 

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Name:     Title:     SCORPION ACQUISITION, LLC By:  

 

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Name:     Title:    

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PEQUOT SCOUT FUND, L.P. By Pequot Capital Management, Inc. as Investment Manager
By:  

 

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Name:     Title:     PEQUOT NAVIGATOR ONSHORE FUND, L.P. By Pequot Capital
Management, Inc. as Investment Manager By:  

 

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Name:     Title:     PEQUOT NAVIGATOR OFFSHORE FUND, L.P. By Pequot Capital
Management, Inc. as Investment Manager By:  

 

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Name:     Title:    

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PREMIUM SERIES PCC LIMITED – CELL 33 By:  

 

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Name:     Title:    

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TH LEE PUTNAM VENTURES, L.P.   TH LEE PUTNAM PARALLEL VENTURES, L.P.

By: TH Lee Putnam Fund Advisors, L.P.,

            its General Partner

 

By: TH Lee Putnam Fund Advisors, L.P.,

            its General Partner

By: TH Lee Putnam Fund Advisors, LLC

            its General Partner

 

By: TH Lee Putnam Fund Advisors, LLC

            its General Partner

By:  

 

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  By:  

 

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Name:       Name:     Title:       Title:    

 

THLi COINVESTMENT PARTNERS, LLC   BLUE STAR I, LLC

By: TH Lee Putnam Fund Advisors, L.P.,

            its General Partner

       

By: TH Lee Putnam Fund Advisors, LLC

            its General Partner

        By:  

 

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  By:  

 

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Name:       Name:   Thomas H. Lee Title:       Title:   Managing Member

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Jack Duffy

 

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Individually

Dolph DiBiaso

 

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Individually

Vincent Wasik

 

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Individually

Palm Beach Overseas Investors, Limited

 

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By:

Its: Andrew Boszhardt

 

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Individually

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BNS Long Short Fund

 

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By:

Its: William S. Lapp

 

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Individually

Steven Cristaldi

 

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Individually

Alexander Paluch

 

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Individually

Ray A. Mirza

 

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Individually

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BPEF 2 PEGASUS LIMITED

 

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By:

Its: EAST RIVER II, L.P.

 

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By:

Its: TERRANOVA CAPITAL

 

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By:

Its:

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SCHEDULE 1

 

Preferred Shares, Voting Shares and Excess Shares

 

Stockholder

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   Initial Investment

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   Total Preferred
Shares

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   Total Voting
Shares

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   Total Excess
Shares

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Special Situations Fund III, L.P.

   $ 2,250,000    30,529,172    9,374,898    21,154,274

Special Situations Cayman Fund, L.P.

   $ 750,000    10,176,390    3,124,966    7,051,424

Special Situations Private Equity Fund, L.P.

   $ 3,000,000    40,705,563    12,499,864    28,205,699

Scorpion Capital Partners, L.P.

   $ 5,000,000    67,842,605    20,833,107    47,009,498

Scorpion Acquisition, LLC

   $ 800,000    10,854,816    3,333,297    7,521,519

Pequot Scout Fund, L.P.

   $ 2,907,600    39,451,831    12,114,868    27,336,963

Pequot Navigator Onshore Fund, L.P.

   $ 1,724,700    23,401,628    7,186,172    16,215,456

Pequot Navigator Offshore Fund, Inc.

   $ 1,266,700    17,187,245    5,277,859    11,909,386

Premium Series PCC Limited – Cell 33

   $ 101,000    1,370,420    420,829    949,591

TH Lee Putnam Ventures, L.P.

   $ 1,103,307    14,970,244    4,597,063    10,373,181

TH Lee Putnam Parallel Ventures, L.P.

   $ 807,089    10,951,044    3,362,834    7,588,170

THLi Coinvestment Partners, LLC

   $ 64,606    876,607    269,188    607,419

Blue Star I, LLC

   $ 24,998    339,185    104,157    235,028

Jack Duffy

   $ 250,000    3,392,130    1,041,655    2,350,475

Dolph DiBiaso

   $ 250,000    3,392,130    1,041,655    2,350,475

Vincent Wasik

   $ 500,000    6,784,260    2,083,311    4,700,949

Palm Beach Overseas Investors, Limited

   $ 200,000    2,713,704    833,324    1,880,380

Andrew Boszhardt

   $ 500,000    6,784,260    2,083,311    4,700,949

BNS Long Short Fund

   $ 400,000    5,427,408    1,666,648    3,760,760

William S. Lapp

   $ 300,000    4,070,556    1,249,986    2,820,570

Steven Cristaldi

   $ 20,000    271,370    83,332    188,038

Alexander Paluch

   $ 40,000    542,740    166,665    376,075

Ray A. Mirza

   $ 20,000    271,370    83,332    188,038

BPEF 2 Pegasus Limited

   $ 380,000    5,156,037    1,583,316    3,572,721

East River II, L.P.

   $ 250,000    3,392,130    1,041,655    2,350,475

TOTALS

   $ 22,910,000    310,854,805    95,457,294    215,397,511