Document:

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                                                                   Exhibit 10.39

                          CONTRACTOR SERVICES AGREEMENT

        THIS AGREEMENT (the "Agreement") is effective as of the 27th day of
July, 2003 (the "Effective Date"), by and between Velocity Express Corporation,
a Delaware corporation ("Company") and MCG Global, LLC ("Contractor").

                              W I T N E S S E T H:

        WHEREAS, Company is engaged in the logistics and same-day delivery
business (collectively, the "Business");

        WHEREAS, Contractor is experienced in the business of corporate
management, operational, strategic and financial guidance and has the expertise
necessary to advise Company regarding these and similar matters;

        WHEREAS, Company desires to contract for the services of Contractor to
provide Vincent Wasik to act as the Company's Chief Executive Officer;

        WHEREAS, the parties wish to enter into this Agreement to reflect their
mutual understandings and agreements;

        NOW, THEREFORE, in consideration of the foregoing recitals, which are
hereby made an integral part hereof and of the mutual covenants hereinafter set
forth, the parties hereto, intending to be legally bound hereby, agree as
follows:

        1.      Confidential Information.  Company and Contractor previously
entered into a Non-Disclosure and Non-Circumvention Agreement on April 18, 2001
(the "Non-Disclosure Agreement"), which Non-Disclosure Agreement, as well as its
duties, obligations and definitions are incorporated herein by reference. As
used in this Agreement, the term "Confidential Information" shall mean, in
addition to the definitions contained in the Non-Disclosure Agreement, any and
all information regarding Company, the Business or the Services disclosed,
transferred, or made known to Contractor, including without limitation
information concerning Company's past and present litigation, and Company's
finances, technology, customers, sales representatives suppliers.

        2.      Services.  Contractor shall serve as the Company's Chief
Executive Officer with all of the normal powers, duties, obligations and rights
as are generally attendant to such (collectively, the "Services"). All Services
called for by this Agreement shall be performed in conjunction with and in
accordance with the directions, specifications, conditions and requirements, as
the same may be modified from time to time, of the Company's Board of Directors
(the "Board").

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        3.      Compensation.  In consideration for the Services, Company shall
pay Contractor such compensation in such amount and at such times as is
specified by the Compensation Committee of the Board.

        4.      Expense.  Company shall reimburse Contractor for all reasonable
travel expenses, consistent with the Company's existing travel policies. With
the exception of expenses incurred under paragraph 6 hereof, Contractor shall be
liable for all other expenses or costs incurred by it with respect to providing
the Services unless otherwise agreed to by the Board or its Compensation
Committee.

        5.      Term.  Either party may terminate this Agreement at any time,
for any reason, upon written notice to the other. Upon termination, Contractor
will be entitled to receive reimbursement for any outstanding fees and expenses
owed by Company to Contractor under the Agreement.

        6.      Right to Contract With Others; Own Work Schedule.  Contractor's
obligation hereunder is to provide the Services according to the requirements,
specifications and conditions, and no later than the times, specified herein and
in Exhibit A hereto. Contractor has no obligation to work any particular hours
or days or any particular number of hours or days. Contractor retains the right
to contract for similar services with other businesses or individuals, subject
to Contractor's obligations under the Non-Disclosure Agreement and hereunder.

        7.      Right to Control.  The Company shall have no right to control or
direct the details, manner or means by which Contractor or its affiliates
provide the Services, except as otherwise set forth in this Agreement.
Contractor agrees to not take any action that is detrimental to, or not in the
best interest of, the Company.

        8.      Independent Contractor - Not Employee.  Contractor is an
independent contractor and shall not be considered an employee, partner, joint
venturer or agent of the Company for any purpose whatsoever. Contractor
acknowledges and agrees that the Company has no responsibility whatsoever for
the payment of any taxes or other obligations that arise from Contractor
providing the Services.

        9.      Not Assignable.  Neither this Agreement nor any of Contractor's
rights or obligations hereunder, may be assigned or transferred by Contractor to
any party or parties or to any entity or entities; provided, however, that
Contractor may assign its right to receive some or all of the compensation
payable to Contractor pursuant to Section 2 of Exhibit A annexed hereto provided
that written notice of such assignment shall be provided to Company.

        10.     Indemnification.  In connection with any Services provided
hereunder, or any report or recommendation that Contractor provides to Company,
Company will indemnify and hold Contractor and its officers, directors, agents,
servants and employees harmless from and against all suits, claims (including
claims brought by Company, other than for breach of this Agreement by
Contractor), costs, liabilities, fees and expenses (including reasonable
attorney's fees) resulting from or arising out of any services rendered by
Contractor to Company, other than for Contractor's gross negligence or willful
misconduct.

                                        2

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        11.     Insurance.  Company represents and warrants that it currently
maintains Directors and Officers Liability insurance, and covenants that it will
not reduce or eliminate such coverage during the Term. Company shall cause
Contractor and Vince Wasik to be named as additional insured's under its
Directors and Officers Liability insurance policies. Company shall deliver to
Contractor a Certificate of Insurance evidencing that Contractor and Vince Wasik
have been named as additional insureds under Company's Directors and Officers
Liability insurance policies.

        13.     General Provisions.

                (a)     This Agreement encompasses the entire agreement of the
parties with respect to the subject matter hereof and there are no other
agreements or understandings unless expressed in writing and attached to this
Agreement. This Agreement may not be modified or amended except by a written
agreement signed by the parties hereto.

                (b)     If one or more of the paragraphs or parts hereof are
found to be unenforceable, illegal, contrary to public policy or are in some
other manner declared to be unenforceable by a court of competent jurisdiction,
this Agreement shall remain in full force and effect except for that paragraph
or portion thereof determined to be unenforceable, illegal or contrary to public
policy.

                (c)     The construction, interpretation and performance of this
Agreement, and all transactions under or related to it, shall be governed by the
laws of the State of Minnesota.

                (d)     The terms and provisions of this Agreement relating to
Confidential Information and non-competition shall remain in full force and
effect notwithstanding the termination or completion of this Agreement or the
completion of the provision of the Services.

                (e)     This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, successors,
representatives and assigns; provided, however, that Contractor shall not,
without the express written consent of Company, assign or transfer any
Confidential Information to others.

                                        3

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        IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.

                                        Velocity Express Corporation

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        MCG Global, LLC

                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:

                                        4<PAGE>

                                                                   Exhibit 10.40

                                     WARRANT

                              To Purchase Shares of
                                 Common Stock of
                          VELOCITY EXPRESS CORPORATION

                                                               December 21, 2004

     This Certifies that, in consideration for good and valuable consideration,
TH Lee Putnam Ventures, L.P., TH Lee Putnam Parallel Ventures, L.P., THLi
Coinvestment Partners, LLC and Blue Star I, LLC (the "Warrantholder"), is
entitled to subscribe for and purchase from the Company, at any time after
shareholder approval for the issuance of this warrant and prior to December 21,
2009 (the "Expiration Date") up to 9,677,553 shares of the Company's Common
Stock at a price of $0.0001 per share (the "Purchase Price"), subject to
adjustment as hereinafter set forth.

     Definitions. For the purposes of this Warrant the following terms shall
have the following meanings:

     "Commission" shall mean the Securities and Exchange Commission, or any
other federal agency then administering the Securities Act.

     "Company" shall mean Velocity Express Corporation, a Delaware corporation,
and any corporation, which shall succeed to, or assume, the obligations of said
corporation hereunder.

     "Common Stock" shall mean the shares of Common Stock of the Company, $0.004
par value.

     "Fair Market Value" shall mean the closing price of the Common Stock as
reported on the Nasdaq Stock Market on such date, if the Common Stock is then
quoted on the Nasdaq Stock Market or, if the market is closed on that date, the
closing price of the Common Stock on the previous trading day. If the Common
Stock is not listed on the Nasdaq Stock Market, Fair Market Value shall be
determined in good faith by the Company's Board of Directors.

     "Other Securities" shall mean any stock (other than Common Stock) or other
securities of the Company which the Warrantholder at any time shall be entitled
to receive, or shall have received, upon the exercise of the Warrants, in lieu
of or in addition to Common Stock, or which at any time shall be issuable or
shall have been issued in exchange for or in replacement of Common Stock or
Other Securities.

     "Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission thereunder, as in effect at the time.

     "Subscription Form" shall mean the subscription forms attached hereto.

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     "Transfer" shall mean any sale, assignment, pledge, or other disposition of
any Warrants and/or Warrant Shares, or of any interest in either thereof, which
would constitute a sale thereof within the meaning of Section 2(3) of the
Securities Act.

     "Warrant Shares" shall mean the shares of Common Stock purchased or
purchasable by the Warrantholder upon the exercise of the Warrants pursuant to
Section 1 hereof.

     "Warrantholder" shall mean the holder or holders of the Warrants or any
related Warrant Shares.

     "Warrants" shall mean the Warrants (including this Warrant), identical as
to terms and conditions and date, issued by the Company in connection with the
sale of the Notes, and all Warrants issued in exchange, transfer or replacement
thereof.

     All terms used in this Warrant which are not defined in Section 1 hereof
have the meanings respectively set forth elsewhere in this Warrant.

     1. Exercise of Warrant, Issuance of Certificate, and Payment for Warrant
Shares. Upon shareholder approval for the issuance of this warrant, the rights
represented by this Warrant may be exercised at any time prior to the Expiration
Date, by the Warrantholder, in whole or in part (but not as to any fractional
share of Common Stock), by: (a) delivery to the Company of a completed
Subscription Form, (b) surrender to the Company of this Warrant properly
endorsed and signature guaranteed, and (c) delivery to the Company of a
certified or cashier's check made payable to the Company in an amount equal to
the aggregate Purchase Price of the shares of Common Stock being purchased, at
its principal office or agency in Minnesota (or such other office or agency of
the Company as the Company may designate by notice in writing to the holder
hereof). The Company agrees and acknowledges that the shares of Common Stock so
purchased shall be deemed to be issued to the holder hereof as the record owner
of such shares as of the close of business on the date on which this Warrant,
properly endorsed, and the Subscription Form shall have been surrendered and
payment made for such shares as aforesaid. Upon receipt thereof, the Company
shall, as promptly as practicable, and in any event within fifteen (15) days
thereafter, execute or cause to be executed and deliver to the Warrantholder a
certificate or certificates representing the aggregate number of shares of
Common Stock specified in said Subscription Form. Each stock certificate so
delivered shall be in such denomination as may be requested by the Warrantholder
and shall be registered in the name of the Warrantholder or such other name as
shall be designated by the Warrantholder. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of said stock
certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights of such holder to purchase the remaining shares of Common
Stock covered by this Warrant. The Company shall pay all expenses, taxes, and
other charges payable in connection with the preparation, execution, and
delivery of stock certificates pursuant to this Section 2, except that, in case
any such stock certificate or certificates shall be registered in a name or
names other than the name of the Warrantholder, funds sufficient to pay all
stock transfer taxes which shall be payable upon the execution and delivery of
such stock certificate or certificates shall be paid by the Warrantholder to the
Company at the time of delivering this Warrant to the Company as mentioned
above.

     2. Ownership of this Warrant. The Company may deem and treat the registered
Warrantholder as the holder and owner hereof (notwithstanding any notations of
ownership or writing made hereon by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for transfer as provided herein and then only if
such transfer meets the requirements of Section 4.

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     3. Exchange, Transfer, and Replacement. Subject to Section 4 hereof, this
Warrant is exchangeable upon the surrender hereof by the Warrantholder to the
Company at its office or agency described in Section 1 hereof for new Warrants
of like tenor and date representing in the aggregate the right to purchase the
number of shares purchasable hereunder, each of such new Warrants to represent
the right to purchase such number of shares (not to exceed the aggregate total
number purchasable hereunder) as shall be designated by the Warrantholder at the
time of such surrender. Subject to Section 4 hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, upon the books of the Company
by the Warrantholder in person or by duly authorized attorney, and a new Warrant
of the same tenor and date as this Warrant, but registered in the name of the
transferee, shall be executed and delivered by the Company upon surrender of
this Warrant, duly endorsed, at such office or agency of the Company. Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction, or mutilation of this Warrant, and, in the case of loss,
theft, or destruction, of indemnity or security reasonably satisfactory to it,
and upon surrender and cancellation of this Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant. This
Warrant shall be promptly canceled by the Company upon the surrender hereof in
connection with any exchange, transfer, or replacement. The Company shall pay
all expenses, taxes (other than stock transfer taxes), and other charges payable
in connection with the preparation, execution, and delivery of Warrants pursuant
to this Section 3.

     4. Restrictions on Transfer. Notwithstanding any provisions contained in
this Warrant to the contrary, neither this Warrant nor the Warrant Shares shall
be transferable except upon the conditions specified in this Section 4, which
conditions are intended, among other things, to ensure compliance with the
provisions of the Securities Act in respect of the transfer of this Warrant or
such Warrant Shares. The holder of this Warrant agrees that such holder will not
transfer this Warrant or the related Warrant Shares (a) prior to delivery to the
Company of an opinion of counsel selected by the Warrantholder and reasonably
satisfactory to the Company, stating that such transfer is exempt from
registration under the Securities Act, or (b) until registration of such
Warrants and/or Warrant Shares under the Securities Act has become effective and
continues to be effective at the time of such transfer. An appropriate legend
may be endorsed on the Warrants and the certificates of the Warrant Shares
evidencing these restrictions. The holder of this Warrant further agrees that
such holder will not, for a period of 180 days from the date that a registration
statement covering securities offered by the Company is declared effective by
the Commission, offer to sell, contract to sell, or otherwise sell, dispose of,
loan, pledge or grant any rights with respect to the Warrant or the Warrant
Shares owned by the holder, otherwise than with the prior written consent of the
Company.

     5. Recapitalization Provisions. The rights granted hereunder are subject to
the following:

               Share holder approval. The issuance of this warrant and the
     holders rights to exercise it is subject to approval by the Company's
     shareholders of the issuance of the warrant.

               Stock Splits. In case at any time the Company shall subdivide its
     outstanding shares of Common Stock into a greater number of shares, the
     Purchase Price in effect immediately prior to such subdivision shall be
     proportionately reduced and the number of Warrant Shares purchasable
     pursuant to this Warrant immediately prior to such subdivision shall be
     proportionately increased, and conversely, in case at any time the Company
     shall combine its outstanding shares of Common Stock into a smaller

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     number of shares, the Purchase Price in effect immediately prior to such
     combination shall be proportionately increased and the number of Warrant
     Shares purchasable upon the exercise of this Warrant immediately prior to
     such combination shall be proportionately reduced. Except as provided in
     this paragraph (a), no adjustment in the Purchase Price and no change in
     the number of Warrant Shares so purchasable shall be made pursuant to this
     Section 5 as a result of or by reason of any such subdivision or
     combination.

               Reorganization, Reclassification, Consolidation, Merger, or Sale.
     If any capital reorganization or reclassification or merger of the Company
     with another corporation, or the sale of all or substantially all of its
     assets to another corporation, shall be effected in such a way that holders
     of shares of Common Stock shall be entitled to receive Common Stock, Other
     Securities or assets with respect to or in exchange for shares of Common
     Stock, then, as a condition of such reorganization, reclassification,
     consolidation, merger or sale, lawful and adequate provision shall be made
     whereby the Warrantholder shall thereafter have the right to purchase and
     receive upon the basis and upon the terms and conditions specified in the
     Warrants and in lieu of the shares of Common Stock of the Company
     immediately theretofore purchasable and receivable upon the exercise of the
     Warrants such shares of Common Stock, Other Securities or assets as may be
     issued or payable with respect to or in exchange for a number of
     outstanding shares of Common Stock equal to the number of shares of Common
     Stock immediately theretofore purchasable and receivable upon the exercise
     of the Warrants had such reorganization, reclassification, consolidation,
     merger or sale not taken place, and in any such case appropriate provision
     shall be made with respect to the rights and interests of the Warrantholder
     so that the provisions of the Warrants (including, without limitation,
     provisions for adjustment of the Purchase Price and the number of shares
     purchasable upon the exercise of the Warrants) shall thereafter be
     applicable, as nearly as may be, in relation to any shares of Common Stock,
     Other Securities or assets thereafter deliverable upon the exercise of the
     Warrants.

     6. Special Agreements of the Company.

               Will Reserve Shares. The Company will reserve and set apart and
     have at all times the number of shares of authorized but unissued Common
     Stock deliverable upon the exercise of the Warrants, and it will have at
     all times any other rights or privileges provided for herein sufficient to
     enable it at any time to fulfill all of its obligations hereunder.

               Will Avoid Certain Actions. The Company will not, by amendment of
     its Articles of Incorporation or through any reorganization, transfer of
     assets, consolidation, merger, issue or sale of securities or otherwise,
     avoid or take any action which would have the effect of avoiding the
     observance or performance hereunder by the Company, but will at all times
     in good faith assist in carrying out of all the provisions of the Warrants
     and in taking all such actions as may be necessary or appropriate in order
     to protect the rights of the Warrantholder against dilution or other
     impairment.

     7. Registration Rights. The Company agrees to include holders Warrant in
the next registration statement filed after the date hereof.

     8. Notices. Any notice or other document required or permitted to be given
or delivered to the Warrantholder shall be delivered or sent by certified mail
to the Warrantholder at

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the last address shown on the books of the Company maintained for the registry
and transfer of the Warrants. Any notice or other document required or permitted
to be given or delivered to the Company shall be delivered or sent by certified
or registered mail to the principal office of the Company.

     9. No Rights as Shareholders; Limitation of Liability. This Warrant shall
not entitle any holder hereof to any of the rights of a shareholder of the
Company. No provisions hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration herein
of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Purchase Price or as a shareholder of the
Company whether such liability is asserted by the Company or by creditors of the
Company.

     10. Governing Law. This Warrant shall be governed by, and construed and
enforced in accordance with, the laws of the State of Minnesota, without regard
to conflicts of laws principles.

     11. Miscellaneous. This Warrant and any provision hereof may be changed,
waived, discharged, or terminated only by an instrument in writing signed by the
party (or any predecessor in interest thereof) against which enforcement of the
same is sought. The headings in this Warrant are for purposes of reference only
and shall not affect the meaning or construction of any of the provisions
hereof.

     IN WITNESS WHEREOF, the Company has caused this Warrant to be signed by a
duly authorized officer, and to be dated as of December 21, 2004.

                                     VELOCITY EXPRESS CORPORATION

                                     By:
                                         ---------------------------------------
                                         Wesley Fredenburg
                                         Corporate Secretary and General Counsel

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "1933 ACT") OR UNDER THE SECURITIES LAWS OF ANY
OTHER STATE AND MAY NOT BE TRANSFERRED WITHOUT (i) THE OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT
REGISTRATION UNDER THE 1933 ACT OR THE SECURITIES LAWS OF ANY APPLICABLE STATE;
OR (ii) SUCH REGISTRATION."

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                             FULL SUBSCRIPTION FORM

To Be Executed By the Registered Warrantholder if It/
She/He Desires to Exercise in Full the Within Warrant

     The undersigned hereby exercises the right to purchase the
                                                                -------------
shares of Common Stock covered by the within Warrant at the date of this
subscription and herewith makes payment of the sum of
$                             representing the Purchase Price of $           per
 ----------------------------                                     ----------
share in effect at that date. Certificates for such shares shall be issued in
the name of and delivered to the undersigned, unless otherwise specified by
written instructions, signed by the undersigned and accompanying this
subscription.

Dated:
       ----------------------------

                                      Signature:
                                                 -------------------------------

                                      Address:
                                               ---------------------------------

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                            PARTIAL SUBSCRIPTION FORM

To be Executed by the Registered Warrantholder if It/She/He
Desires to Exercise in Part Only the Within Warrant

     The undersigned hereby exercises the right to purchase            shares of
                                                            ----------
the total shares of Common Stock covered by the within Warrant at the date of
this subscription and herewith makes payment of the sum of $
                                                            ------------
representing the Purchase Price of $          per share in effect at this date.
                                    ---------

     Certificates for such shares and a new Warrant of like tenor and date for
the balance of the shares not subscribed for (if any) shall be issued in the
name of and delivered to the undersigned, unless otherwise specified by written
instructions, signed by the undersigned and accompanying this subscription.

     The shares hereby subscribed for constitute                shares of Common
                                                 --------------
Stock (to the nearest whole share) resulting from adjustment of
                                                                --------------
shares of the total of               shares of Common Stock covered by the
                       -------------
within Warrant, as said shares were constituted at the date of the Warrant.

Dated:
       ----------------------------

                                      Signature:
                                                 -------------------------------

                                      Address:
                                               ---------------------------------

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