Document:

EXHIBIT 4.1

 Exhibit 4.1 
  
 EXECUTION COPY 
  

  
 CAPITAL ONE MULTI-ASSET EXECUTION TRUST 
  
 as Issuer 
  
 and 
  
 THE BANK OF NEW YORK 
  
 as Indenture Trustee 
  
 CLASS C(2003-3) TERMS DOCUMENT 
  
 dated as of September 23, 2003 
  
 to 
  
 CARD SERIES INDENTURE SUPPLEMENT 

 
 dated as of October 9, 2002 
  
 to 
  
 ASSET POOL 1 SUPPLEMENT 
  
 dated as of October 9, 2002 
  
 to 
  
 INDENTURE 
  
 dated as of October 9, 2002 
  

 TABLE OF CONTENTS 
  

	 	  	 	  	Page

	 	  	 ARTICLE I
 Definitions and Other Provisions of General Application
	  	 
			
	Section 1.01.	  	Definitions	  	1
			
	Section 1.02.	  	Governing Law	  	7
			
	Section 1.03.	  	Counterparts	  	7
			
	Section 1.04.	  	Ratification of Indenture, the Asset Pool 1 Supplement and Indenture Supplement	  	7
			
	 	  	 ARTICLE II
 The Class C(2003-3) Notes
	  	 
			
	Section 2.01.	  	Creation and Designation	  	8
			
	Section 2.02.	  	Adjustments to Required Subordinated Percentages	  	8
			
	Section 2.03.	  	Interest Payment	  	8
			
	Section 2.04.	  	Calculation Agent; Determination of LIBOR	  	8
			
	Section 2.05.	  	Payments of Interest and Principal	  	9
			
	Section 2.06.	  	Targeted Deposit to the Class C Reserve Account	  	9
			
	Section 2.07.	  	Form of Delivery of Class C(2003-3) Notes; Depository; Denominations	  	10
			
	Section 2.08.	  	Delivery and Payment for the Class C(2003-3) Notes	  	10
			
	Section 2.09.	  	Targeted Deposits to the Accumulation Reserve Account	  	10
			
	Section 2.10.	  	Capital One Derivative Agreement	  	10
			
	Section 2.11	  	Tax Treatment	  	11

  

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 THIS CLASS C(2003-3) TERMS DOCUMENT (this “Terms Document”), by and between CAPITAL ONE
MULTI-ASSET EXECUTION TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), having its principal office at E.A. Delle Donne Corporate Center, Montgomery Building, 1011 Centre Road, Wilmington, DE
19805 and THE BANK OF NEW YORK, a New York banking corporation, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of September 23, 2003. 
  
 Pursuant to this Terms Document, the Issuer shall create a new tranche of Class C Notes and shall specify the principal
terms thereof. 
  
 ARTICLE I 
  
 Definitions and Other Provisions of General Application 
  
 Section 1.01. Definitions. For all purposes of this Terms Document,
except as otherwise expressly provided or unless the context otherwise requires: 
  

	 	(1)	the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; 

  

	 	(2)	all other terms used herein which are defined in the Indenture Supplement, the Asset Pool 1 Supplement or the Indenture, either directly or by reference therein, have the meanings
assigned to them therein; 

  

	 	(3)	all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein
expressly provided, the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder means such accounting principles as are generally accepted in the United States of America at the date
of such computation; 

  

	 	(4)	all references in this Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions
of this Terms Document; 

  

	 	(5)	the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular
Article, Section or other subdivision; 

  

	 	(6)	in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or provision contained in the Indenture Supplement, the Asset Pool 1
Supplement, the Indenture or the Transfer and Administration Agreement, the terms and provisions of this Terms Document shall be controlling; 

  

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	 	(7)	each capitalized term defined herein shall relate only to the Class C(2003-3) Notes and no other Tranche of Notes issued by the Issuer; and 

  

	 	(8)	“including” and words of similar import will be deemed to be followed by “without limitation.” 

  
 “Accumulation Period Amount” means $20,833,333.34;
provided, however, if the Accumulation Period Length is determined to be less than twelve (12) months pursuant to Section 3.10(b)(ii) of the Indenture Supplement, the Accumulation Period Amount shall be the amount specified in
the definition of “Accumulation Period Amount” in the Indenture Supplement. 
  
 “Accumulation Reserve Funding Period” shall mean, (a) if the Accumulation Period Length is determined to be one (1) month, there shall be no Accumulation Reserve Funding Period and (b) otherwise, the
period (x) commencing on the earliest to occur of (i) the Monthly Period beginning three (3) calendar months prior to the first Distribution Date for which a budgeted deposit is targeted to be made into the Principal Funding sub-Account of the Class
C(2003-3) Notes pursuant to Section 3.10(b) of the Indenture Supplement, (ii) the Monthly Period following the first Distribution Date following and including the August 2011 Distribution Date for which the Quarterly Excess Spread Percentage
is less than 2%, but in such event the Accumulation Reserve Funding Period shall not be required to commence earlier than 12 months prior to the first Distribution Date for which a budgeted deposit is targeted to be made into the Principal Funding
sub-Account for the Class C(2003-3) Notes pursuant to Section 3.10(b) of the Indenture Supplement, (iii) the Monthly Period following the first Distribution Date following and including the February 2012 Distribution Date for which the
Quarterly Excess Spread Percentage is less than 3%, but in such event the Accumulation Reserve Funding Period shall not be required to commence earlier than 6 months prior to the first Distribution Date for which a budgeted deposit is targeted to be
made into the Principal Funding sub-Account for the Class C(2003-3) Notes pursuant to Section 3.10(b) of the Indenture Supplement, and (iv) the Monthly Period following the first Distribution Date following and including the April 2012
Distribution Date for which the Quarterly Excess Spread Percentage is less than 4%, but in such event the Accumulation Reserve Funding Period shall not be required to commence earlier than 4 months prior to the first Distribution Date for which a
budgeted deposit is targeted to be made into the Principal Funding sub-Account for the Class C(2003-3) Notes pursuant to Section 3.10(b) of the Indenture Supplement and (y) ending on the close of business on the last day of the Monthly Period
preceding the earlier to occur of (i) the Expected Principal Payment Date for the Class C(2003-3) Notes and (ii) the date on which the Class C(2003-3) Notes are paid in full. 
  
 “Aggregate Class C Unencumbered Amount” means an amount equal to (a) the Adjusted Outstanding Dollar
Principal Amount of all Class C Notes in the Card Series minus (b) the sum of the Required Subordinated Amount of Class C Notes for all Class A Notes in the Card Series plus the Unencumbered Required Subordinated Amount of Class C Notes for
all Class B Notes in the Card Series. 
  
 “Asset Pool 1
Supplement” means the Asset Pool 1 Supplement dated as of October 9, 2002, by and between the Issuer and the Indenture Trustee, as amended and supplemented from time to time. 
  

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 “Base Rate” means, with respect to any Monthly Period, the sum of (a) the Card Series
Servicing Fee Percentage and (b) the weighted average (based on the Outstanding Dollar Principal Amount of the related Card Series Notes) of the following: 
  
 (i) in the case of a Tranche of Card Series Dollar Interest-bearing Notes with no Derivative Agreement for interest, the rate of interest
applicable to such Tranche for the period from and including the Monthly Interest Accrual Date for such Tranche of Card Series Dollar Interest-bearing Notes in such Monthly Period to but excluding the Monthly Interest Accrual Date for such Tranche
of Card Series Dollar Interest-bearing Notes in the following Monthly Period; 
  
 (ii) in the case of a Tranche of Card Series Discount Notes, the rate of accretion (converted to an accrual rate) of such Tranche for the period from and including the Monthly Interest Accrual Date for such Tranche of
Card Series Discount Notes in such Monthly Period to but excluding the Monthly Interest Accrual Date for such Tranche of Card Series Discount Notes in the following Monthly Period; 
  
 (iii) in the case of a Tranche of Card Series Notes with a Performing Derivative Agreement for interest, the
rate at which payments by the Issuer to the applicable Derivative Counterparty accrue (prior to the netting of such payments, if applicable) for the period from and including the Monthly Interest Accrual Date for such Tranche of Card Series Notes in
such Monthly Period to but excluding the Monthly Interest Accrual Date for such Tranche of Card Series Notes in the following Monthly Period; provided, however, that in the case of a Tranche of Card Series Notes with a Performing Derivative
Agreement for interest in which the rating on such Tranche of Card Series Notes is not dependant upon the rating of the applicable Derivative Counterparty, the amount determined pursuant to this clause (iii) will be the higher of (1) the rate
determined pursuant to this clause (iii) above and (2) the rate of interest applicable to such Tranche for the period from and including the Monthly Interest Accrual Date for such Tranche of Card Series Notes in such Monthly Period to but excluding
the Monthly Interest Accrual Date for such Tranche of Card Series Notes in the following Monthly Period; and 
  
 (iv) in the case of a tranche of Card Series Notes with a non-Performing Derivative Agreement for interest, the rate specified for that
date in the related Terms Document. 
  
 “Calculation
Agent” is defined in Section 2.04(a). 
  
 “Class C(2003-3) Adverse Event” means the occurrence of any of the following: (a) an Early Redemption Event with respect to the Class C(2003-3) Notes or (b) an Event of Default and acceleration of the Class C(2003-3) Notes.

  
 “Class C(2003-3) Note” means any Note,
substantially in the form set forth in Exhibit A-3 to the Indenture Supplement, designated therein as a Class C(2003-3) Note and duly executed and authenticated in accordance with the Indenture. 
  

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 “Class C(2003-3) Noteholder” means a Person in whose name a Class C(2003-3) Note is
registered in the Note Register. 
  
 “Class C Reserve
Account Percentage” means, (i) zero, if the Quarterly Excess Spread Percentage on such Distribution Date is greater than or equal to 4.50%, (ii) 1.25%, if the Quarterly Excess Spread Percentage on such Distribution Date is less than 4.50%
and greater than or equal to 4.00%, (iii) 2.25%, if the Quarterly Excess Spread Percentage on such Distribution Date is less than 4.00% and greater than or equal to 3.50%, (iv) 3.00%, if the Quarterly Excess Spread Percentage on such Distribution
Date is less than 3.50% and greater than or equal to 3.00%; (v) 4.50%, if the Quarterly Excess Spread Percentage on such Distribution Date is less than 3.00% and greater than or equal to 2.50%, (vi) 5.50%, if the Quarterly Excess Spread Percentage
on such Distribution Date is less than 2.50% and greater than or equal to 2.00%, and (vii) 7.25%, if the Quarterly Excess Spread Percentage on such Distribution Date is less than 2.00%. 
  
 “Class C(2003-3) Termination Date” means the earliest to occur of (a) the Principal Payment Date on which
the Outstanding Dollar Principal Amount of the Class C(2003-3) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to Article VI thereof. 
  
 “Encumbered Required Subordinated Amount of Class D Notes”
means, for the Class C(2003-3) Notes, an amount equal to the product of (a) the aggregate Required Subordinated Amount of Class D Notes for all Class A Notes in the Card Series plus the sum of the Unencumbered Required Subordinated Amount of Class D
Notes for all Class B Notes in the Card Series and (b) the percentage equivalent of a fraction, the numerator of which is the Adjusted Outstanding Dollar Principal Amount of the Class C(2003-3) Notes and the denominator of which is the Adjusted
Outstanding Dollar Principal Amount of all Class C Notes in the Card Series. 
  
 “Excess Spread Percentage” shall mean, with respect to any Distribution Date, the amount, if any, by which the Portfolio Yield for the preceding Monthly Period exceeds the Base Rate for such Monthly
Period. 
  
 “Expected Principal Payment Date”
means September 16, 2013. 
  
 “Initial Dollar Principal
Amount” means $250,000,000. 
  
 “Indenture” means the Indenture dated as of October 9, 2002, by and between the Issuer and the Indenture Trustee, as amended and supplemented from time to time. 
  
 “Indenture Supplement” means the Card Series Indenture Supplement dated as of October 9, 2002, by and
between the Issuer and the Indenture Trustee, as amended and supplemented from time to time. 
  
 “Interest Payment Date” means the fifteenth day of each month commencing in October 2003, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 
  
 “Interest Period” means, with respect to any Interest
Payment Date, the period from and including the previous Interest Payment Date (or in the case of the initial Interest Payment Date, from and including the Issuance Date) through the day preceding such Interest Payment Date. 
  

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 “Issuance Date” means September 23, 2003. 
  
 “Legal Maturity Date” means July 15, 2016. 
  
 “LIBOR” means, for any Interest Period, the London interbank
offered rate for one-month United States dollar deposits determined by the Indenture Trustee on the LIBOR Determination Date for each Interest Period in accordance with the provisions of Section 2.04. 
  
 “LIBOR Determination Date” means September 19, 2003 for the
period from and including the Issuance Date to but excluding October 15, 2003 and the second London Business Day prior to the commencement of the second and each subsequent Interest Period. 
  
 “London Business Day” means any Business Day on which
dealings in deposits in United States Dollars are transacted in the London interbank market. 
  
 “Note Interest Rate” means a rate per annum equal to 2.25% in excess of LIBOR as determined by the Calculation Agent on the related LIBOR Determination Date with respect to each Interest Period.

  
 “Paying Agent” means The Bank of New York.

  
 “Portfolio Yield” means, with respect to any
Monthly Period, the annualized percentage equivalent of a fraction: 
  
 (a) the numerator of which is equal to the sum of: 
  
 (i) the aggregate amount of Finance Charge Amounts allocated to the Card Series with respect to such Monthly Period; plus 
  
 (ii) the aggregate amount of Interest Funding sub-Account Earnings on all Tranches of Card Series Notes for
such Monthly Period; plus 
  
 (iii) any
amounts to be treated as Card Series Finance Charge Amounts pursuant to Sections 3.20(d) and 3.27(a) of the Indenture Supplement; minus 
  
 (iv) the excess, if any, of (1) the sum of the PFA Prefunding Earnings Shortfall plus the PFA Accumulation Earnings Shortfall over (2) the
sum of the aggregate amount to be treated as Card Series Finance Charge Amounts for such Monthly Period pursuant to Sections 3.04(a)(ii) and 3.25(a) of the Indenture Supplement plus any other amounts applied to cover earnings
shortfalls on amounts in the Principal Funding sub-Account for any tranche of Card Series Notes for such Monthly Period; minus 
  
 (v) the Card Series Default Amount for such Monthly Period; and 
  
 (b) the denominator of which is the numerator used in the calculation of the Card Series Floating Allocation Percentage for
such Monthly Period. 
  

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 “Quarterly Excess Spread Percentage” means, (i) with respect to the October 2003
Distribution Date, the Excess Spread Percentage with respect to the immediately preceding Monthly Period, (ii) with respect to the November 2003 Distribution Date, the percentage equivalent of a fraction the numerator of which is the sum of the
Excess Spread Percentages with respect to the immediately preceding two Monthly Periods and the denominator of which is two, and (iii) with respect to the December 2003 Distribution Date and each Distribution Date thereafter, the percentage
equivalent of a fraction the numerator of which is the sum of the Excess Spread Percentages with respect to the immediately preceding three Monthly Periods and the denominator of which is three. 
  
 “Record Date” means, for any Distribution Date, the last
Business Day of the preceding Monthly Period. 
  
 “Reference Banks” means four major banks in the London interbank market selected by the Beneficiary. 
  
 “Required Accumulation Reserve sub-Account Amount” means, with respect to any Monthly Period during the Accumulation Reserve Funding
Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class C(2003-3) Notes as of the close of business on the last day of the preceding Monthly Period or (ii) any other amount designated by the Issuer;
provided, however, that if such designation is of a lesser amount, the Note Rating Agencies shall have provided prior written confirmation that a Ratings Effect will not occur with respect to such change. 
  
 “Required Subordinated Amount of Class D Notes” means, for
the Class C(2003-3) Notes, an amount equal to the sum of (a) the Unencumbered Required Subordinated Amount of Class D Notes for such Class C(2003-3) Notes and (b) the Encumbered Required Subordinated Amount of Class D Notes for such Class C(2003-3)
Notes; provided, however, that for any date of determination, unless (i) the Prefunding Target Amount for any Tranche of Card Series Notes on such date of determination is greater than zero or (ii) any prefunded amounts are on deposit
in a Principal Funding sub-Account on such date of determination for any Tranche of Card Series Notes, the Required Subordinated Amount of Class D Notes for the Class C(2003-3) Notes will not be less than an amount equal to 1.5229% of the Initial
Dollar Principal Amount of the Class C(2003-3) Notes, provided further, however, that for any date of determination on or after the occurrence and during the continuation of a Class C(2003-3) Adverse Event, the Required
Subordinated Amount of Class D Notes for the Class C(2003-3) Notes will be the greatest of (x) the amount determined above for such date of determination, (y) the amount determined above for the date immediately prior to the date on which such Class
C(2003-3) Adverse Event shall have occurred and (z) unless (i) the Prefunding Target Amount for any Tranche of Card Series Notes on such date of determination is greater than zero or (ii) any prefunded amounts are on deposit in a Principal Funding
sub-Account on such date of determination for any Tranche of Card Series Notes, the amount determined pursuant to the preceding proviso. 
  
 “Required Subordinated Percentage of Class D Notes” means, for the Class C(2003-3) Notes, 1.5229%, subject to adjustment in accordance
with Section 2.02. 
  
 “Stated Principal
Amount” means $250,000,000. 
  

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 “Telerate Page 3750” means the display page currently so designated on the Moneyline
Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 
  
 “Unencumbered Amount” means, for the Class C(2003-3) Notes, an amount equal to the product of (a) the percentage equivalent of a
fraction, the numerator of which is the Aggregate Class C Unencumbered Amount and the denominator of which is the Adjusted Outstanding Dollar Principal Amount of all Class C Notes in the Card Series and (b) the Adjusted Outstanding Dollar Principal
Amount of the Class C(2003-3) Notes. 
  
 “Unencumbered
Required Subordinated Amount of Class D Notes” means, for the Class C(2003-3) Notes, an amount equal to the product of (a) the Unencumbered Amount for the Class C(2003-3) Notes and (b) the Required Subordinated Percentage of Class D Notes
for the Class C(2003-3) Notes. 
  
 Section 1.02. Governing
Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 Section 1.03. Counterparts. This Terms Document may be executed in any number of counterparts, each of which so executed will be deemed to be an original, but all such counterparts will together constitute but
one and the same instrument. 
  
 Section 1.04. Ratification of
Indenture, the Asset Pool 1 Supplement and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture, the Asset Pool 1 Supplement and the Indenture Supplement is in all respects ratified and confirmed and the Indenture
as so supplemented by the Asset Pool 1 Supplement as so supplemented by the Indenture Supplement as so supplemented and this Terms Document shall be read, taken and construed as one and the same instrument. 
  
 [END OF ARTICLE I] 
  

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 ARTICLE II 
  
 The Class C(2003-3) Notes 
  
 Section 2.01. Creation and Designation. There is hereby created a tranche of Card Series Class C Notes to be issued pursuant to the Indenture, the
Asset Pool 1 Supplement and the Indenture Supplement to be known as the “Card Series Class C(2003-3) Notes.” 
  
 Section 2.02. Adjustments to Required Subordinated Percentages. (a) On any date, the Issuer may increase the Required Subordinated Percentage of
Class D Notes for the Class C(2003-3) Notes without the consent of any Noteholders or the Note Rating Agencies. 
  
 (b) On any date, the Issuer may reduce the Required Subordinated Percentage of Class D Notes for the Class C(2003-3) Notes, provided that the Issuer has
(i) received written confirmation from each Note Rating Agency that has rated any Outstanding Notes of the Card Series that the change in such percentage will not result in a Ratings Effect with respect to any Outstanding Class C(2003-3) Notes and
(ii) delivered to the Indenture Trustee and the Note Rating Agencies a Master Trust Tax Opinion for each Master Trust and an Issuer Tax Opinion. 
  
 Section 2.03. Interest Payment. 
  
 (a) For each Interest Payment Date, the amount of interest due with respect to the Class C(2003-3) Notes shall be an amount equal to the product of (i)(A)
a fraction, the numerator of which is the actual number of days in the related Interest Period and the denominator of which is 360, times (B) the Note Interest Rate in effect with respect to the related Interest Period, times (ii) the
Outstanding Dollar Principal Amount of the Class C(2003-3) Notes determined as of the Record Date preceding the related Distribution Date. Any interest on the Class C(2003-3) Notes will be calculated on the basis of the actual number of days in the
related Interest Period and a 360-day year. 
  
 (b) Pursuant to
Section 3.03 of the Indenture Supplement, on each Distribution Date, the Indenture Trustee shall deposit into the Class C(2003-3) Interest Funding sub-Account the portion of Card Series Finance Charge Amounts allocable to the Class C(2003-3)
Notes. 
  
 Section 2.04. Calculation Agent; Determination of
LIBOR. 
  
 (a) The Issuer hereby agrees that for so long as
any Class C(2003-3) Notes are Outstanding, there shall at all times be an agent appointed to calculate LIBOR for each Interest Period (the “Calculation Agent”). The Issuer hereby initially appoints the Indenture Trustee as the
Calculation Agent for purposes of determining LIBOR for each Interest Period. The Calculation Agent may be removed by the Issuer at any time. If the Calculation Agent is unable or unwilling to act as such or is removed by the Issuer, or if the
Calculation Agent fails to determine LIBOR for an Interest Period, the Issuer shall promptly appoint a replacement Calculation Agent that does not control or is not controlled by or under common control with the Issuer or its Affiliates. The
Calculation Agent may not resign its duties, and the Issuer may not remove the Calculation Agent, without a successor having been duly appointed. 
  
 (b) On each LIBOR Determination Date, the Calculation Agent shall determine LIBOR on the basis of the rate for deposits in United States dollars for a
one-month period which 
  

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 appears on Telerate Page 3750 as of 11:00 a.m., London time, on such date. If such rate does not appear on Telerate Page
3750, the rate for that LIBOR Determination Date shall be determined on the basis of the rates at which deposits in United States dollars are offered by the Reference Banks at approximately 11:00 a.m., London time, on that day to prime banks in the
London interbank market for a one-month period. The Calculation Agent shall request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that LIBOR
Determination Date shall be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that LIBOR Determination Date will be the arithmetic mean of the rates quoted by four major banks in New York
City, selected by the Beneficiary, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks for a one-month period. 
  
 (c) The Note Interest Rate applicable to the then current and the immediately preceding Interest Periods may be obtained by
telephoning the Indenture Trustee at its corporate trust office at (212) 815-3247 or such other telephone number as shall be designated by the Indenture Trustee for such purpose by prior written notice by the Indenture Trustee to each Noteholder
from time to time. 
  
 (d) On each LIBOR Determination Date, the
Calculation Agent shall send to the Indenture Trustee, the Issuer and the Beneficiary, by facsimile transmission, notification of LIBOR for the following Interest Period. 
  
 Section 2.05. Payments of Interest and Principal. 
  
 (a) Any installment of interest or principal, if any, payable on any Class C(2003-3) Note which is punctually paid or duly
provided for by the Issuer and the Indenture Trustee on the applicable Interest Payment Date or Principal Payment Date shall be paid by the Paying Agent to the Person in whose name such Class C(2003-3) Note (or one or more Predecessor Notes) is
registered on the Record Date, by wire transfer of immediately available funds to such Person’s account as has been designated by written instructions received by the Paying Agent from such Person not later than the close of business on the
third Business Day preceding the date of payment or, if no such account has been so designated, by check mailed first-class, postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that with
respect to Notes registered on the Record Date in the name of the nominee of Cede & Co., payment shall be made by wire transfer in immediately available funds to the account designated by such nominee. 
  
 (b) The right of the Class C(2003-3) Noteholders to receive payments from the
Issuer will terminate on the first Business Day following the Class C(2003-3) Termination Date. 
  
 Section 2.06. Targeted Deposit to the Class C Reserve Account. The deposit targeted to be made to the Class C Reserve sub-Account for the Class
C(2003-3) Notes for any Distribution Date will be an amount equal to (i) to the product of (A) Class C Reserve Account Percentage for the related Monthly Period times (B) the sum of the Initial Outstanding Dollar Principal Amounts of each tranche of
Outstanding Card Series Notes as of the last day of the preceding Monthly Period times (C) a fraction, the numerator of which is the Nominal Liquidation Amount of the Class C(2003-3) Notes as of the close of business on the last day of the
preceding Monthly Period and the denominator of which is the Nominal Liquidation Amount of all Class C Notes in the Card Series as of the close of business on the last day of the preceding Monthly Period, 
  

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 minus (ii) any amount previously on deposit in the Class C(2003-3) Reserve sub-Account prior to such targeted
deposit; provided however, that if an Early Redemption Event or Event of Default occurs with respect to the Class C(2003-3) Notes, the deposit targeted will be the Adjusted Outstanding Dollar Principal Amount of the Class C(2003-3)
notes minus the amount then on deposit in such sub-Account. 
  
 Section 2.07. Form of Delivery of Class C(2003-3) Notes; Depository; Denominations. 
  
 (a) The Class C(2003-3) Notes shall be delivered in the form of a global Registered Note as provided in Sections 202 and 301(i) of the
Indenture, respectively. 
  
 (b) The Depository for the Class
C(2003-3) Notes shall be The Depository Trust Company, and the Class C(2003-3) Notes shall initially be registered in the name of Cede & Co., its nominee. 
  

(c) The Class C(2003-3) Notes will be issued in minimum denominations of $1,000 and integral multiples of that amount. 
  
 Section 2.08. Delivery and Payment for the Class C(2003-3) Notes. The
Issuer shall execute and deliver the Class C(2003-3) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall deliver the Class C(2003-3) Notes when authenticated, each in accordance with Section 303 of the
Indenture. 
  
 Section 2.09. Targeted Deposits to the
Accumulation Reserve Account. 
  
 The deposit targeted to be
made to the Accumulation Reserve Account for any Monthly Period during the Accumulation Reserve Funding Period will be an amount equal to the Required Accumulation Reserve sub-Account Amount. 
  
 Section 2.10. Capital One Derivative Agreement. 
  
 (a) On any Distribution Date, any amount owed by the Issuer pursuant to the
ISDA Master Agreement, dated as of October 9, 2002, as supplemented by the Schedule thereto, dated as of October 9, 2002, and the Confirmation thereto relating to the Class C(2003-3) Notes, dated as of September 23, 2003 (collectively, the
“Capital One Derivative Agreement”), each between Capital One Bank and the Issuer, shall be paid to Capital One Bank from Card Series Finance Charge Amounts (available after giving effect to Sections 3.01(a) through
(l) of the Indenture Supplement) for such Distribution Date in an amount not to exceed the lesser of (i) the product of (x) the amount of Card Series Finance Charge Amounts available for application pursuant to Section 3.01(m) of the
Indenture Supplement times (y) a fraction, the numerator of which is the Nominal Liquidation Amount of the Class C(2003-3) Notes as of the close of business on the last day of the preceding Monthly Period and the denominator of which is the
Nominal Liquidation Amount of all tranches of Card Series Notes as of the close of business on the last day of the preceding Monthly Period and (ii) the amount of such payment owed by the Issuer to Capital One Bank on such Distribution Date.

  

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 (b) On any Distribution Date, any amount owed to the Issuer pursuant to the Capital One Derivative
Agreement shall be, when received by the Issuer, treated as Card Series Finance Charge Amounts for the purposes of Section 3.01(n) of the Indenture Supplement. 
  
 (c) The Capital One Derivative Agreement shall not be considered a “Derivative Agreement” (as such term is
defined in the Indenture) for the purposes of Indenture, the Asset Pool Supplement or the Indenture Supplement. 
  
 Section 2.11. Tax Treatment. Notwithstanding any other express or implied agreement to the contrary, each of the Issuer and the Class C(2003-3)
Noteholders are hereby deemed to agree that they and any recipient of the Prospectus Supplement dated September 16, 2003 and the Prospectus dated July 28, 2003, each relating to the Class C(2003-3) Notes (or their employees, representatives, or
other agents), may disclose to any and all persons, without limitation of any kind, the Tax Treatment and Tax Structure of any transaction relating to the Issuer or the Class C(2003-3) Notes and all materials of any kind (including opinions or other
tax analyses) that are provided to any of them relating to such Tax Treatment and Tax Structure. For purposes of this Section 2.11, “Tax Treatment” refers to the purported or claimed treatment of the Issuer and the Class
C(2003-3) Notes under the Internal Revenue Code, and “Tax Structure” refers to any fact that may be relevant to understanding such Tax Treatment. It is hereby confirmed that each of the foregoing have been deemed to so agree since
the commencement of discussions regarding the Class C(2003-3) Notes. 
  
 [END OF ARTICLE II] 
  

 11 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be duly executed, all as of the
day and year first above written. 
  

	 CAPITAL ONE MULTI-ASSET EXECUTION TRUST,
 by DEUTSCHE BANK TRUST COMPANY
 DELAWARE, not in its individual capacity, but solely as
 Owner Trustee on behalf of the
Trust

		
	By:	 	 /s/    MICHELE VOON
        

	 	 	 Name:
 Title:
	 	 Michele Voon
 Attorney-in-fact

	
	 THE BANK OF NEW YORK, as Indenture Trustee
 and not in its individual capacity

		
	 By:
	 	 /s/    ALLISON R.
CLAN        

	 	 	 Name:
 Title:
	 	 Allison R. Clan
 Assistant Treasurer

  
  
 [Signature Page to the Class C(2003-3) Terms Document]<PAGE>

                                                                     EXHIBIT 4.1

                          VELOCITY EXPRESS CORPORATION
             CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS OF
                      SERIES I CONVERTIBLE PREFERRED STOCK

<PAGE>

        Section 1. Designation and Amount. The number of authorized shares of
Series I Convertible Preferred Stock, par value $0.004 per share (the "Series I
Preferred Stock"), shall be 8,409,091.

        Section 2. Dividends. In the event that the Corporation declares or pays
any dividends upon the Common Stock (whether payable in cash, securities or
other property) other than dividends payable solely in shares of Common Stock,
the Corporation shall also declare and pay to the holders of Series I Preferred
Stock at the same time that it declares and pays such dividends to the holders
of the Common Stock, the dividends which would have been declared and paid with
respect to the Common Stock issuable upon conversion of shares of the Series I
Preferred Stock which are convertible into shares of Common Stock had all such
shares of the outstanding Series I Preferred Stock been converted immediately
prior to the record date for such dividend, or if no record date is fixed, the
date as of which the record holders of Common Stock entitled to such dividends
are to be determined.

        Section 3. Liquidation Preference. Upon liquidation, dissolution and
winding up of the Corporation (whether voluntary or involuntary) (a "Liquidation
Event"), the Corporation shall pay to the holders of the Series I Preferred
Stock (unless otherwise provided for in the resolution or resolutions creating
such stock) the aggregate Liquidation Value attributable to such shares (each, a
"Share") plus any unpaid dividends thereon. If upon any such Liquidation Event,
the Corporation's assets to be distributed among the holders of the Junior
Securities, Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series F Preferred Stock, Series G Preferred Stock, Series H
Preferred Stock and Series I Preferred Stock are insufficient to permit payment
to such holders of the aggregate amount which they are entitled to be paid under
this Section 3 or Article IV, Section 3 of the Corporation's Amended and
Restated Certificate of Incorporation, as amended from time to time (the
"Charter"), as applicable, then the entire assets available to be distributed to
the Corporation's stockholders shall be distributed in accordance with the
priorities set forth in Article IV, Section 3 of the Charter, with the Series I
Preferred Stock ranking parri passu with the Series D, F, G and H Preferred
Stock and prior to the Series B and C Preferred Stock. Not less than sixty (60)
days prior to the payment date of the Liquidation Value, the Corporation shall
mail written notice of any such Liquidation Event to each record holder of
Series I Preferred Stock, setting forth in reasonable detail the amount of
proceeds to be paid with respect to each Share and each share of Common Stock in
connection with such Liquidation Event. A change of control of the Corporation
shall not be deemed a Liquidation Event for purposes of this Section 3.

        Section 4. Voting Rights.

        4A.     Voting Rights. Subject to the terms of this Section 4, the
holders of the Series I Preferred Stock shall be entitled to notice of all
stockholders meetings in accordance with the Corporation's Bylaws, and except as
otherwise required by applicable law, the holders of the

<PAGE>

Series I Preferred Stock shall be entitled to vote on all matters submitted to
the stockholders for a vote together with the holders of the Common Stock, and
all other classes of capital stock entitled to vote with the Common Stock,
voting together as a single class with each share of and Series I Preferred
Stock entitled to one vote for each share of Common Stock issuable upon
conversion of the such Series I Preferred Stock as of the record date for such
vote or, if no record date is specified, as of the date of such vote.
Notwithstanding the above, the Series I Preferred Stock shall have no voting
rights to the extent that its holder, together with the holder's Affiliates,
have voting power in excess of 40% of all of the Corporation's outstanding
capital stock.

        4B.     Covenants.

        The Corporation shall not take any of the actions set forth below
without first obtaining the affirmative vote of the holders of at least
two-thirds of the then outstanding shares of Series I Preferred Stock for so
long as at least 20% of the Series I Preferred Stock originally issued pursuant
to the Rights Offering remains outstanding:

                (a) alter or change the preferences, rights or powers of the
        Series I Preferred Stock;

                (b) increase or decrease the authorized number of shares of the
        Series I Preferred Stock;

        Section 5. Conversion. Subject to the terms of this Section 5, at any
time and from time to time, any holder of Series I Preferred Stock may convert
all or any portion of the Series I Preferred Stock (including any fraction of a
Share) held by such holder into a number of shares of Conversion Stock computed
by multiplying the number of Shares to be converted by $2.20 and dividing the
result by the Conversion Price then in effect; provided, however, that, except
for Organic Changes (as defined below) to which the following limitation does
not apply, the Series I Preferred Stock shall not be convertible into Conversion
Stock to the extent that such conversion would result in the holder of the
Series I Preferred, together with such holder's Affiliates, holding 40% or more
of all of the outstanding capital stock of the Corporation on an as converted
basis.

        5A.     Conversion Procedure.

                (i)     Except as otherwise provided herein, each conversion of
        Preferred Stock shall be deemed to have been effected as of the close of
        business on the date on which the certificate or certificates
        representing the Series I Preferred Stock to be converted have been
        surrendered for conversion at the principal office of the Corporation.
        At the time any such conversion has been effected, the rights of the
        holder of the Shares converted as a holder of Series I Preferred Stock
        shall cease and the Person or Persons in whose name or names any
        certificate or certificates for shares of Conversion Stock are to be
        issued upon such conversion shall be deemed to have become the holder or
        holders of record of the shares of Conversion Stock represented thereby.

                (ii)    Notwithstanding any other provision hereof, if a
        conversion of Preferred Stock is to be made in connection with a
        transaction affecting the Corporation, the

                                        2

<PAGE>

        conversion of any shares of Series I Preferred Stock may, at the
        election of the holder thereof, be conditioned upon the consummation of
        such transaction, in which case such conversion shall not be deemed to
        be effective until such transaction has been consummated.

                (iii)   As soon as possible after a conversion has been effected
        (but in any event within three (3) Business Days in the case of
        subparagraph (A) below), the Corporation shall deliver to the converting
        holder:

                        (A)     a certificate or certificates representing the
                number of shares of Conversion Stock issuable by reason of such
                conversion in such name or names and such denomination or
                denominations as the converting holder has specified;

                        (B)     payment of any amount payable under subparagraph
                (viii) below with respect to such conversion; and

                        (C)     a certificate representing any Shares, which
                were represented, by the certificate or certificates delivered
                to the Corporation in connection with such conversion but which
                were not converted.

                (iv)    The issuance of certificates representing shares of
        Conversion Stock upon conversion of Preferred Stock shall be made
        without charge to the holders of such Preferred Stock for any issuance
        tax in respect thereof or other cost incurred by the Corporation in
        connection with such conversion and the related issuance of shares of
        Conversion Stock. Upon conversion of each share of Series I Preferred
        Stock, the Corporation shall take all such actions as are necessary in
        order to insure that the Conversion Stock issuable with respect to such
        conversion shall be validly issued, fully paid and nonassessable, free
        and clear of all taxes, liens, charges and encumbrances with respect to
        the issuance thereof.

                (v)     The Corporation shall not close its books against the
        transfer of Preferred Stock or of Conversion Stock issued or issuable
        upon conversion of Series I Preferred Stock in any manner, which
        interferes with the timely conversion of Series I Preferred Stock. The
        Corporation shall assist and cooperate with any holder of Shares
        required to make any governmental filings or obtain any governmental
        approval prior to or in connection with any conversion of Shares
        hereunder (including, without limitation, making any filings required to
        be made by the Corporation).

                (vi)    The Corporation shall at all times reserve and keep
        available out of its authorized but unissued shares of Conversion Stock,
        solely for the purpose of issuance upon the conversion of the Series I
        Preferred Stock, such number of shares of Conversion Stock issuable upon
        the conversion of all outstanding Preferred Stock. All shares of
        Conversion Stock that are so issuable shall, when issued, be duly and
        validly issued, fully paid and nonassessable and free from all taxes,
        liens and charges. The Corporation shall take all such actions as may be
        necessary to assure that all such shares of Conversion Stock may be so
        issued without violation of any applicable law or governmental
        regulation or any requirements of any domestic securities exchange upon
        which shares of

                                        3

<PAGE>

        Conversion Stock may be listed (except for official notice of issuance
        which shall be immediately delivered by the Corporation upon each such
        issuance). The Corporation shall not take any action that would cause
        the number of authorized but unissued shares of Conversion Stock to be
        less than the number of such shares required to be reserved hereunder
        for issuance upon conversion of the Preferred Stock.

                (vii)   If any fractional interest in a share of Conversion
        Stock would, except for the provisions of this subparagraph, be
        delivered upon any conversion of Preferred Stock, the Corporation, in
        lieu of delivering the fractional share therefore, shall pay an amount
        to the holder thereof equal to the Market Price of such fractional
        interest as of the date of conversion.

                (viii)  If the shares of Conversion Stock issuable by reason of
        conversion of Preferred Stock are convertible into or exchangeable for
        any other stock or securities of the Corporation, the Corporation shall,
        at the converting holder's option, upon surrender of the Shares to be
        converted by such holder as provided herein together with any notice,
        statement or payment required to effect such conversion or exchange of
        Conversion Stock, deliver to such holder or as otherwise specified by
        such holder a certificate or certificates representing the stock or
        securities into which the shares of Conversion Stock issuable by reason
        of such conversion are so convertible or exchangeable, registered in
        such name or names and in such denomination or denominations as such
        holder has specified.

        5B.     Conversion Price.

                (i)     In order to prevent dilution of the conversion rights
        granted under this Section 5, the Conversion Price of the Series I
        Preferred Stock shall be subject to adjustment from time to time
        pursuant to this Section 5B.

                (ii)    If and whenever after the original date of issuance of
        the first share of Series I Preferred Stock, the Corporation issues or
        sells, or in accordance with Section 5C is deemed to have issued or
        sold, any shares of its Common Stock for a consideration per share less
        than the Market Price of the Common Stock determined as of the date of
        such issue or sale, then immediately upon such issue or sale, the
        Conversion Price shall be reduced to the Conversion Price determined by
        multiplying the Conversion Price in effect immediately prior to such
        issue or sale by a fraction, the numerator of which shall be the sum of
        (1) the number of shares of Common Stock Deemed Outstanding immediately
        prior to such issue or sale multiplied by the Market Price of the Common
        Stock determined as of the date of such issuance or sale, plus (2) the
        consideration, if any, received by the Corporation upon such issue or
        sale, and the denominator of which shall be the product derived by
        multiplying the Market Price of the Common Stock by the number of shares
        of Common Stock Deemed Outstanding immediately after such issue or sale.

                (iii)   Notwithstanding the foregoing, there shall be no
        adjustment to the Conversion Price hereunder with respect to any
        issuances that are exempt from

                                        4

<PAGE>

        adjustment with respect to any shares of Preferred Stock of any series
        pursuant to Section 5B (iii) of the Charter.

        5C.     Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under paragraph 5B, the following
shall be applicable:

                (i)     Issuance of Rights or Options. If the Corporation in any
        manner grants or sells any Options and the price per share for which
        Common Stock is issuable upon the exercise of such Options, or upon
        conversion or exchange of any Convertible Securities issuable upon
        exercise of such Options, is less than the Market Price of the Common
        Stock determined as of such time, then the total maximum number of
        shares of Common Stock issuable upon the exercise of such Options or
        upon conversion or exchange of the total maximum amount of such
        Convertible Securities issuable upon the exercise of such Options shall
        be deemed to be outstanding and to have been issued and sold by the
        Corporation at the time of the granting or sale of such Options for such
        price per share. For purposes of this paragraph, the "price per share
        for which Common Stock is issuable" shall be determined by dividing (A)
        the total amount, if any, received or receivable by the Corporation as
        consideration for the granting or sale of such Options, plus the minimum
        aggregate amount of additional consideration payable to the Corporation
        upon exercise of all such Options, plus in the case of such Options
        which relate to Convertible Securities, the minimum aggregate amount of
        additional consideration, if any, payable to the Corporation upon the
        issuance or sale of such Convertible Securities and the conversion or
        exchange thereof, by (B) the total maximum number of shares of Common
        Stock issuable upon the exercise of such Options or upon the conversion
        or exchange of all such Convertible Securities issuable upon the
        exercise of such Options. No further adjustment of the Conversion Price
        shall be made when Convertible Securities are actually issued upon the
        exercise of such Options or when Common Stock is actually issued upon
        the exercise of such Options or the conversion or exchange of such
        Convertible Securities.

                (ii)    Issuance of Convertible Securities. If the Corporation
        in any manner issues or sells any Convertible Securities and the price
        per share for which Common Stock is issuable upon conversion or exchange
        thereof is less than the Market Price of the Common Stock determined as
        of such time, then the maximum number of shares of Common Stock issuable
        upon conversion or exchange of such Convertible Securities shall be
        deemed to be outstanding and to have been issued and sold by the
        Corporation at the time of the issuance or sale of such Convertible
        Securities for such price per share. For the purposes of this paragraph,
        the "price per share for which Common Stock is issuable" shall be
        determined by dividing (A) the total amount received or receivable by
        the Corporation as consideration for the issue or sale of such
        Convertible Securities, plus the minimum aggregate amount of additional
        consideration, if any, payable to the Corporation upon the conversion or
        exchange thereof, by (B) the total maximum number of shares of Common
        Stock issuable upon the conversion or exchange of all such Convertible
        Securities. No further adjustment of the Conversion Price shall be made
        when Common Stock is actually issued upon the conversion or exchange of
        such Convertible Securities, and if any such issue or sale of such
        Convertible Securities is made upon exercise of any Options for which
        adjustments of the Conversion Price had

                                        5

<PAGE>

        been or are to be made pursuant to other provisions of this Section 5,
        no further adjustment of the Conversion Price shall be made by reason of
        such issue or sale.

                (iii)   Change in Option Price or Conversion Rate. If the
        purchase price provided for in any Options, the additional
        consideration, if any, payable upon the conversion or exchange of any
        Convertible Securities or the rate at which any Convertible Securities
        are convertible into or exchangeable for Common Stock changes at any
        time, the Conversion Price in effect at the time of such change shall be
        immediately adjusted to the Conversion Price which would have been in
        effect at such time had such Options or Convertible Securities still
        outstanding provided for such changed purchase price, additional
        consideration or conversion rate, as the case may be, at the time
        initially granted, issued or sold. For purposes of Section 5C, if the
        terms of any Option or Convertible Security which was outstanding as of
        the date of issuance of the Series I Preferred Stock are changed in the
        manner described in the immediately preceding sentence, then such Option
        or Convertible Security and the Common Stock deemed issuable upon
        exercise, conversion or exchange thereof shall be deemed to have been
        issued and sold as of the date of such change; provided, that (A) no
        such change shall at any time cause the Conversion Price hereunder to be
        increased, and (B) no adjustment to the Conversion Price pursuant to
        this clause (iii) shall be made as a result of any adjustment to the
        exercise and/or conversion price with respect to the Bayview Warrant,
        the Common Warrants, the Series D Preferred Stock and Series F Preferred
        Stock only, the Series B Preferred Stock, the Series C Preferred Stock,
        the Series C Warrants, the Preferred Warrants and the exercise of the
        Bridge Warrants, pursuant to and in accordance with the antidilution
        protection provisions of such securities as in effect on the date
        hereof.

                (iv)    Treatment of Expired Options and Unexercised Convertible
        Securities. Upon the expiration of any Option or the termination of any
        right to convert or exchange any Convertible Security without the
        exercise of any such Option or right, the Conversion Price then in
        effect hereunder shall be adjusted immediately to the Conversion Price
        which would have been in effect at the time of such expiration or
        termination had such Option or Convertible Security, to the extent
        outstanding immediately prior to such expiration or termination, never
        been issued. For purposes of Section 5C, the expiration or termination
        of any Option or Convertible Security which was outstanding as of the
        date of issuance of the Preferred Stock with Conversion Price subject to
        adjustment shall not cause the Conversion Price hereunder to be adjusted
        unless, and only to the extent that, a change in the terms of such
        Option or Convertible Security caused it to be deemed to have been
        issued after the date of issuance of the Preferred Stock with Conversion
        Price subject to adjustment.

                (v)     Calculation of Consideration Received. If any Common
        Stock, Option or Convertible Security is issued or sold or deemed to
        have been issued or sold for cash, the consideration received therefore
        shall be deemed to be the amount received by the Corporation therefore.
        If any Common Stock, Option or Convertible Security is issued or sold
        for a consideration other than cash, the amount of the consideration
        other than cash received by the Corporation shall be the fair value of
        such consideration, except where such consideration consists of
        securities, in which case the amount of consideration

                                        6

<PAGE>

        received by the Corporation shall be the Market Price thereof as of the
        date of receipt. The fair value of any consideration other than cash and
        securities shall be determined jointly by the Corporation and the
        holders of at least two-thirds of the Series I Preferred Stock. If such
        parties are unable to reach agreement within a reasonable period of
        time, the fair value of such consideration shall be determined by an
        independent appraiser experienced in valuing such type of consideration
        jointly selected by the Corporation and the holders of at least
        two-thirds of the Series I Preferred Stock, voting as an individual
        class. The determination of such appraiser shall be final and binding
        upon the parties, and the fees and expenses of such appraiser shall be
        borne by the Corporation.

                (vi)    Integrated Transactions. In case any Option is issued in
        connection with the issue or sale of other securities of the
        Corporation, together comprising one integrated transaction in which no
        specific consideration is allocated to such Option by the parties
        thereto, the Option shall be deemed to have been issued for a
        consideration of $.01.

                (vii)   Treasury Shares. The number of shares of Common Stock
        outstanding at any given time shall not include shares owned or held by
        or for the account of the Corporation or any Subsidiary, and the
        disposition of any shares so owned or held shall be considered an issue
        or sale of Common Stock.

                (viii)  Record Date. If the Corporation takes a record of the
        holders of Common Stock for the purpose of entitling them (a) to receive
        a dividend or other distribution payable in Common Stock, Options or in
        Convertible Securities or (b) to subscribe for or purchase Common Stock,
        Options or Convertible Securities, then such record date shall be deemed
        to be the date of the issue or sale of the shares of Common Stock deemed
        to have been issued or sold upon the declaration of such dividend or
        upon the making of such other distribution or the date of the granting
        of such right of subscription or purchase, as the case may be.

        5D.     Subdivision or Combination of Common Stock. If the Corporation
at any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be proportionately reduced, and if the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.

        5E.     Reorganization, Reclassification, Consolidation, Merger or Sale.
Any recapitalization, reorganization, reclassification, consolidation, merger,
sale of all or substantially all of the Corporation's assets or other
transaction, in each case which is effected in such a manner that the holders of
Common Stock are entitled to receive (either directly or upon subsequent
liquidation) stock, securities or assets with respect to or in exchange for
Common Stock held by such holders, is referred to herein as an "Organic Change".
Prior to the consummation of any Organic Change, the Corporation shall make
appropriate provisions to insure that each of the holders of Series I Preferred
Stock shall thereafter have the right to acquire and receive, in lieu of the
shares of Conversion Stock immediately theretofore acquirable and receivable
upon the conversion of such holder's Series I Preferred Stock, such shares of

                                        7

<PAGE>

stock, securities or assets as such holder would have received in connection
with such Organic Change if such holder had converted its Series I Preferred
Stock immediately prior to such Organic Change. The Corporation shall not effect
any such consolidation, merger or sale, unless prior to the consummation
thereof, the successor entity (if other than the Corporation) resulting from
consolidation or merger or the entity purchasing such assets assumes by written
instrument, the obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
holder may be entitled to acquire.

        5F.     Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 5 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Corporation's Board of Directors shall make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of Preferred Stock;
provided, that no such adjustment shall increase the Conversion Price or
decrease the number of shares of Conversion Stock issuable upon conversion of
each Share of Preferred Stock as otherwise determined pursuant to this Section
5.

        5G.     Notices.

                (i)     Immediately upon any adjustment of the Conversion Price,
        the Corporation shall give written notice thereof to all affected
        holders of Preferred Stock, setting forth in reasonable detail and
        certifying the calculation of such adjustment.

                (ii)    The Corporation shall give written notice to all holders
        of Preferred Stock at least 20 days prior to the date on which the
        Corporation closes its books or takes a record (a) with respect to any
        dividend or distribution upon Common Stock, (b) with respect to any pro
        rata subscription offer to holders of Common Stock or (c) for
        determining rights to vote with respect to any Organic Change,
        dissolution or liquidation.

                (iii)   The Corporation shall also give written notice to the
        holders of Preferred Stock at least 20 days prior to the date on which
        any Organic Change shall take place.

        Section 6. Purchase Rights. If at any time the Corporation grants,
issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the "Purchase Rights") and such rights are not
concurrently granted to the holders of the Preferred Stock, then each holder of
Initially Designated Preferred Stock or the Series I Preferred Stock shall be
entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which such holder could have acquired if such holder
had held the number of shares of Conversion Stock acquirable upon conversion of
such holder's Initially Designated Preferred Stock or Series I Preferred Stock
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

        Section 7. Registration of Transfer. The Corporation shall keep or have
its agent keep a register for the registration of Series I Preferred Stock. Upon
the surrender of any certificate

                                        8

<PAGE>

representing Preferred Stock at a place designated by the Corporation, the
Corporation shall, at the request of the record holder of such certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange therefore representing in the aggregate the number of
Shares represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such number of Shares as is
requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate, and dividends
shall accrue on the Series I Preferred Stock represented by such new certificate
from the date to which dividends have been fully paid on such Series I Preferred
Stock represented by the surrendered certificate.

        Section 8. Replacement. Upon receipt of evidence reasonably satisfactory
to the Corporation (an affidavit of the registered holder shall be satisfactory)
of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing Shares, and in the case of any such loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate, and dividends
shall accrue on the Shares represented by such new certificate from the date to
which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.

        Section 9. Definitions. To the extent not defined herein, terms shall
have the meaning set forth in the Charter.

        "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person, where
"control" means the possession, directly or indirectly, of the power to direct
the management and policies of a Person whether through ownership of voting
securities, contract or otherwise.

        "Bayview Warrant" has the meaning set forth in the Charter.

        "Common Stock" means, collectively, the Corporation's common stock, par
value $0.004 per share, and any capital stock of any class of the Corporation
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Corporation. "Common Stock Deemed Outstanding" means, at any
given time, the number of shares of Common Stock actually outstanding at such
time, plus the number of shares of Common Stock deemed to be outstanding
pursuant to subparagraphs 5C(i) and 5C(ii) hereof whether or not the Options or
Convertible Securities are actually exercisable at such time.

        "Common Warrants" means, collectively, the "Common Warrants" as defined
in the Charter.

        "Conversion Price" initially means $0.22 for the Series I Preferred
Stock.

                                        9

<PAGE>

        "Conversion Stock" means shares of the Corporation's Common Stock;
provided, that if there is a change such that the securities issuable upon
conversion of the Preferred Stock are issued by an entity other than the
Corporation or there is a change in the type or class of securities so issuable,
then the term "Conversion Stock" shall mean one share of the security issuable
upon conversion of the Preferred Stock if such security is issuable in shares,
or shall mean the smallest unit in which such security is issuable if such
security is not issuable in shares.

        "Convertible Securities" means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.

        "Corporation" means Velocity Express Corporation, a Delaware
corporation, or, where applicable (for example, in connection with agreements
dated prior to the date of incorporation of the Corporation under the GCL), UST.
Where applicable, reference to certain agreements of the Corporation entered
into prior to its incorporation under the GCL refer to those as assumed by the
surviving entity as a matter of law under the expected merger between the
Corporation and UST.

        "Exchange Act" means the Securities Exchange Act of 1934, as amended.

        "Initially Designated Preferred Stock" shall mean the Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, Series F Preferred
Stock, Series G Preferred Stock and Series H Preferred Stock, together.

        "Junior Securities" has the meaning set forth in Section 1 of the
Charter.

        "Liquidation Event" has the meaning set forth in Section 3.

        "Liquidation Value" of any share of Series I Preferred Stock shall be
equal to $2.20.

        "Market Price" of any security means the average of the closing prices
of such security's sales on all securities exchanges on which such security may
at the time be listed, or, if there has been no sales on any such exchange on
any day, the average of the highest bid and lowest asked prices on all such
exchanges at the end of such day, or, if on any day such security is not so
listed, the average of the representative bid and asked prices quoted in the
NASDAQ System as of 4:00 P.M., New York time, or, if on any day such security is
not quoted in the NASDAQ System, the average of the highest bid and lowest asked
prices on such day in the domestic over-the-counter market as reported by the
National Quotation Bureau, Incorporated, or any similar successor organization,
in each such case averaged over a period of the twenty (20) consecutive trading
days immediately prior to the day as of which "Market Price" is being
determined. If at any time such security is not listed on any securities
exchange or quoted in the NASDAQ System or the over-the-counter market, the
"Market Price" shall be the fair value thereof determined jointly by the
Corporation and the holders of at least two-thirds of each of the then
outstanding classes of Preferred Stock, voting as individual classes. If such
parties are unable to reach agreement within a reasonable period of time, such
fair value shall be determined by an independent appraiser experienced in
valuing securities jointly selected by the Corporation and the holders of at
least two-thirds of each of the then outstanding classes of Preferred Stock,
voting as individual classes. The determination of such appraiser shall be final
and binding upon the parties, and the Corporation shall pay the fees and
expenses of such appraiser.

                                       10

<PAGE>

        "Options" means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

        "Permitted Issuances" means the acts described in Section 5B(iii) of the
Charter.

        "Person" means an individual, a partnership, a corporation, a limited
liability company, a limited liability, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.

        "Preferred Stock" shall have the meaning set forth in the Charter.

        "Preferred Warrants" means, collectively, the "Preferred Warrants" and
the "Additional Warrants" as defined in the Charter.

        "Series B Preferred Stock" shall mean the Corporation's Series B
Convertible Preferred Stock, par value $0.004 per share.

        "Series C Preferred Stock" shall mean the Corporation's Series C
Convertible Preferred Stock, par value $0.004 per share.

        "Series D Preferred Stock" shall mean the Corporation's Series D
Convertible Preferred Stock, par value $0.004 per share.

        "Series F Preferred Stock" shall mean the Corporation's Series F
Convertible Preferred Stock, par value $0.004 per share.

        "Series G Preferred Stock" shall mean the Corporation's Series G
Convertible Preferred Stock, par value $0.004 per share.

        "Series H Preferred Stock" shall mean the Corporation's Series H
Convertible Preferred Stock, par value $0.004 per share.

        "Series I Preferred Stock" shall mean the Corporation's Series I
Convertible Preferred Stock, par value $0.004 per share.

        "Series C Warrants" means, collectively, the "Series C Warrants" as
defined in, and issued pursuant to, Securities Purchase Agreement dated as of
September 1, 2000, by and among UST and certain investors, as such agreement may
from time to time be amended in accordance with its terms, and any warrants
issued in exchange, substitution or replacement therefore.

        "Share" has the meaning set forth in Section 3.

        "Stock Option Plans" means, collectively, the Corporation's 1995 Stock
Option Plan, 1996 Director Stock Option Plan and 2000 Stock Option Plan.

        "Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, association or other business entity of which
(i) if a corporation, a

                                       11

<PAGE>

majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity, a majority of the partnership
or other similar ownership interest thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that person
or a combination thereof. For purposes hereof, a Person or Persons shall be
deemed to have a majority ownership interest in a limited liability company,
partnership, association or other business entity if such Person or Persons
shall be allocated a majority of limited liability company, partnership,
association or other business entity gains or losses or shall be or control the
managing general partner of such limited liability company, partnership,
association or other business entity.

        "UST" means United Shipping and Technology, Inc., a Utah corporation and
the predecessor of Velocity Express Corporation, a Delaware corporation.

        "Voting Securities" means securities of the Corporation ordinarily
having the power to vote for the election of directors of the Corporation;
provided, that when the term "Voting Securities" is used with respect to any
other Person it means the capital stock or other equity interests of any class
or kind ordinarily having the power to vote for the election of directors or
other members of the governing body of such Person.

        Section 10. Amendment and Waiver. No amendment, modification or waiver
shall be binding or effective with respect to any provision of Sections 1 to 10
hereof without the prior written consent of the holders of at least two-thirds
of Series I Preferred Stock outstanding, voting as individual series, at the
time such action is taken.

        Section 11. Notices. Except as otherwise expressly provided hereunder,
all notices referred to herein shall be in writing and shall be delivered by
registered or certified mail, return receipt requested and postage prepaid, or
by reputable overnight courier service, charges prepaid, and shall be deemed to
have been given when so mailed or sent (i) to the Corporation, at its principal
executive offices and (ii) to any stockholder, at such holder's address as it
appears in the stock records of the Corporation (unless otherwise indicated by
any such holder).

                                       12

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