<SUBMISSION>
<ACCESSION-NUMBER>0001193125-06-142667
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>6
<PERIOD>20060629
<ITEMS>1.01
<ITEMS>3.03
<ITEMS>5.03
<ITEMS>9.01
<FILING-DATE>20060706
<DATE-OF-FILING-DATE-CHANGE>20060706
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>VELOCITY EXPRESS CORP
<CIK>0001002902
<ASSIGNED-SIC>4513
<IRS-NUMBER>870355929
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0629
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-28452
<FILM-NUMBER>06948954
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>ONE MORNINGSIDE DRIVE NORTH
<STREET2>BUILDING B SUITE 300
<CITY>WESTPORT
<STATE>X1
<ZIP>06880
<PHONE>203-349-4160
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>ONE MORNINGSIDE DRIVE NORTH
<STREET2>BUILDING B SUITE 300
<CITY>WESTPORT
<STATE>X1
<ZIP>06880
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>UNITED SHIPPING & TECHNOLOGY INC
<DATE-CHANGED>19990512
</FORMER-COMPANY>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>U SHIP INC
<DATE-CHANGED>19960313
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

<HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left"> <P STYLE="margin-top:3px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="3"><B>WASHINGTON, D.C. 20549 </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="5"><B>FORM 8-K </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="3"><B>CURRENT REPORT PURSUANT </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>TO SECTION 13 OR 15(d) OF THE </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"><B>SECURITIES EXCHANGE ACT OF 1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>June&nbsp;29, 2006 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Date of report (Date of earliest event reported) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="6"><B>Velocity Express Corporation
</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="34%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Delaware</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>0-28452</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>87-0355929</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(State or other jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1"><B>of incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Commission File Number)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>One Morningside Drive North </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Bldg. B, Suite 300 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Westport, Connecticut 06880 </B></FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Address of principal executive offices, including zip code) </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>(203) 349-4160 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>(Registrant&#146;s telephone number, including area code) </B></FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR WIDTH="17%" SIZE="1" NOSHADE COLOR="#000000"> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2): </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"></FONT><FONT FACE="WINGDINGS" SIZE="2" COLOR="#000000">&#168;</FONT><FONT FACE="Times New Roman" SIZE="2"></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left">

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXPLANATORY NOTE </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">On July&nbsp;3, 2006, Velocity Express Corporation (the &#147;Company&#148;) and CD&amp;L, Inc. (&#147;CD&amp;L&#148;) signed a merger agreement pursuant to which CD&amp;L Acquisition Corp., a wholly owned subsidiary
of the Company, will be merged with and into CD&amp;L. The Company created the Series Q Convertible Preferred Stock described herein in anticipation of the transactions contemplated by the merger agreement. This current report discloses certain
matters relating to the above-referenced merger agreement that became effective on June&nbsp;29, 2006 and June&nbsp;30, 2006. A current report relating to, among other things, the merger agreement and the issuance of Series Q Convertible Preferred
Stock will be filed no later than July&nbsp;10, 2006. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Reimbursement Agreement with TH Lee </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Effective
June&nbsp;29, 2006, the Company entered into a reimbursement agreement (the &#147;Reimbursement Agreement&#148;) with the holder of approximately 62.3% of its common stock, TH Lee Putnam Ventures (&#147;TH Lee&#148;). Under the terms of the
Reimbursement Agreement: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Company acknowledges its indebtedness to TH Lee for: (i)&nbsp;costs and expenses of approximately $90,000 incurred by TH Lee on behalf of the Company; (ii)&nbsp;an overfunding
in the amount of $130,000 on a prior credit facility maintained by TH Lee for the Company; (iii)&nbsp;merger and acquisition services rendered by TH Lee to the Company; and (iv)&nbsp;credit enhancements provided by TH Lee to the Company in the form
of loan guarantees. Under the terms of the Reimbursement Agreement, the Company agreed to satisfy the obligations described above through the payment of cash in the amount of $89,551, 11,818 shares of Series Q Convertible Preferred Stock (described
below) and the issuance of warrants to purchase 797,500 shares of common stock at an exercise price of $0.01 per share. The Company agreed to register for resale the shares of common stock issuable upon conversion of the Series Q Convertible
Preferred Stock and the warrants simultaneously with the registration of conversion shares underlying the shares of Series Q Convertible Preferred Stock issued to purchaser investors. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Company acknowledges an obligation to a law firm for fees and expenses aggregating $149,000 for work arranged by TH Lee on behalf of the Company and the Company agreed to
satisfy such obligation in cash. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Company agreed to promptly pay on demand and in cash all future out of pocket costs and expenses incurred by TH Lee for the benefit of the Company, subject to certain terms and
conditions, including the prior written consent of the Company and the proper substantiation of such costs and expenses. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The
foregoing description is qualified in its entirety by the Reimbursement Agreement set forth at Exhibit 10.1 to this current report. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Voting, Consent,
Amendment and Waiver Agreements with Holders of Common Stock and Series M, N, O and P Convertible Preferred Stock </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Effective
June&nbsp;29, 2006, the Company entered into voting, consent, amendment and waiver agreements (the &#147;Consent Agreements&#148;) with holders of the Company&#146;s common stock and each of its Series M, N, O and P Convertible Preferred Stock. A
description of the principal terms and conditions of the Consent Agreements follows. The following description is qualified in its entirety by the Consent Agreements set forth at Exhibits 10.2 and 10.3 to this current report. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Under the Consent Agreements, the holders of a majority of the Company&#146;s issued and outstanding shares of voting capital stock (common stock and
Series M, N, and O Convertible Preferred Stock) consented to the Company&#146;s issuance of: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(a)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">up to 4,500,000 shares of the Company&#146;s Series Q Convertible Preferred Stock, par value $0.004 per share, (&#147;Series Q Convertible Preferred Stock&#148;) to certain new
investors; </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(b)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">additional shares of Series Q Convertible Preferred Stock in payment of dividends on issued and outstanding shares of Series Q Convertible Preferred Stock (&#147;PIK Shares&#148;);
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(c)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">four-year warrants (&#147;Note Warrants&#148;) to purchase an aggregate of approximately 26,000,000 shares of common stock, subject to adjustment, at an exercise price of $1.45 per
share, subject to adjustment, to purchasers of the Company&#146;s 12% Senior Secured Notes due 2010; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(d)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">shares of common stock, or securities convertible into or exercisable for common stock or a combination thereof with an aggregate fair value of approximately $3,200,000 for use in
effecting the purchase of a portion of the issued and outstanding capital stock, and securities convertible into shares of the capital stock, of CD&amp;L (the &#147;Exeter Securities&#148;); </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(e)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">approximately 270,000 shares of Series Q Convertible Preferred Stock to Jefferies and Company, Broadband Capital Management, LLC, Context Capital Management, LLC, Meritage Capital
Advisors, LLC and Luther Capital Management, LLC, in payment of placement agent and finders fees; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(f)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">four-year warrants (&#147;THLPV Warrants&#148;) to purchase up to 250,000 and 547,500 shares, respectively, of common stock at a price of $.01 per share, to TH Lee Putnam Ventures,
a stockholder of the Company, in consideration for merger and acquisition services and credit enhancements in the form of loan guarantees provided to the Company; </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(g)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">four-year warrants to purchase up to 400,000 shares of common stock at a price of $1.50 per share (the &#147;Scura Rise Warrants&#148;) to Scura Rise&nbsp;&amp; Partners, LLC in
satisfaction of investment banking fees; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(h)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">up to approximately 500,000 shares of common stock to certain individuals in payment for consulting services (&#147;Consultants&#146; Shares&#148;); </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">41,250 shares of Series Q Convertible Preferred Stock to Pequot Capital Management, a stockholder of the Company, in consideration for credit enhancements in the form of loan
guarantees provided for the benefit of the Company; and </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(j)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the shares of common stock issuable upon the conversion of the Series Q Convertible Preferred Stock referred to above (including any PIK Shares issuable as dividends on the Series Q
Convertible Preferred Stock), and upon the exercise of the Note Warrants, Exeter Securities, THLPV Warrants, and Scura Rise Warrants. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">The holders of a majority of the Company&#146;s issued and outstanding shares of voting capital stock consented to an amendment to the Company&#146;s Amended and Restated Certificate of Incorporation to adjust the rights and preferences of
the Series M, N O and P Convertible Preferred Stock in relation to the Company&#146;s designation of the Series Q Convertible Preferred Stock, together with certain other modifications (the &#147;Amendment&#148;) and the holders of a majority of the
Company&#146;s issued and outstanding shares of Series P Convertible Preferred Stock consented to that portion of the Amendment pertaining to the Certificate of Designation of Preferences and Rights of Series P Convertible Preferred Stock.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The holders of at least 62.5 percent of the outstanding shares of each of the Company&#146;s Series M, N, O and P Convertible Preferred
Stock consented to the Company&#146;s designation of the preferences and rights of the Series Q Convertible Preferred Stock, including without limitation the superiority of the Series Q Convertible Preferred Stock in right of preference as to
dividends and distributions made upon the liquidation of the Company, the proposed issuance and sale of the Series Q Convertible Preferred Stock, and the Amendment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">The holders of at least 62.5 percent of the outstanding shares of each of the Company&#146;s Series M, N and O Convertible Preferred Stock waived, in connection with the proposed securities issuances described above,
the application of conversion price adjustment mechanisms contained in their respective Certificates of Designation of Preferences and Rights to reduce the conversion price for their shares Series M, N and O and P Convertible Preferred Stock below
$2.10. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Company and the holders of a majority of the outstanding shares of the Company&#146;s Series P
Convertible Preferred Stock agreed to reduce the Series P Convertible Preferred Stock conversion price (subject to future adjustment under the Certificates of Designation of Preferences and Rights of Series P Convertible Preferred Stock, but not as
a result of the securities issuances described in (a)&nbsp;through (j)&nbsp;above) to $1.23 per share. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The holders of a majority of the
outstanding shares of the Company&#146;s Series P Convertible Preferred Stock also waived a contractual right of participation in connection with the Company&#146;s proposed issuance of Series Q Convertible Preferred Stock and consented to
amendments of contractual provisions pertaining to participation in future financings and incidental registration rights. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Amendment
will not be filed with the Secretary of State of the State of Delaware until 20 days after the Company mails an information statement to its stockholders in compliance with Regulation 14C under the Securities Exchange Act of 1934, as amended.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Amendments to 2004 Stock Incentive Plan </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">On June&nbsp;29, 2006, the Company&#146;s Board of Directors took action to amend the 2004 Stock Incentive Plan (the &#147;Plan&#148;) as follows: (a)&nbsp;the maximum number of shares that may be granted to any individual in a calendar
year pursuant to awards was increased from 250,000 shares to 1,200,000 shares; and (b)&nbsp;the maximum number of shares that may be granted as incentive stock options (&#147;ISOs&#148;) was increased from 1,000,000 shares to 2,000,000 shares. The
Board of Directors made these changes applicable to existing awards as well as proposed awards under the Plan. The foregoing amendments did not affect the total number of shares reserved for issuance under the Plan. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Upon preparation and execution of the amended plan formalizing the above-referenced amendments, the Company will amend this report to file such amended
plan as an exhibit. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Issuance of Stock Options </I></B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Effective June&nbsp;29, 2006, the Company&#146;s Board of Directors awarded a non-qualified stock option for the purchase of 500,000 shares of common stock to Edward W. Stone, the Company&#146;s Chief Financial
Officer, and ISOs for the purchase of an aggregate of 500,000 shares of common stock to other key employees. The foregoing options were issued under the Plan. Such options vest to the extent of 50%&nbsp;per year, commencing on the first anniversary
of the date of grant. They are exercisable at $1.363 per share, which was the closing price of the Company&#146;s common stock on the Nasdaq Capital Market on June&nbsp;29, 2006. These options expire on June&nbsp;29, 2016, and provide for
accelerated vesting in the event of a change in control of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Upon preparation and execution of written option agreements
formalizing the above-referenced awards, the Company will amend this report to file the form of such agreement as an exhibit. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;3.03 Material
Modification to Rights of Security Holders </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B><I>Designation of Series Q Convertible Preferred Stock </I></B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Amended and Restated Certificate of Incorporation of the Company authorizes it to issue 299,515,270 shares of preferred stock, $0.004 par value per
share, and allows the Board of Directors, without shareholder approval, to designate the preferences and rights of the preferred stock. The Company&#146;s Board of Directors adopted and approved a Certificate of Designations, Preferences and Rights
of Series Q Convertible Preferred Stock of Velocity Express Corporation (the &#147;Certificate of Designation&#148;). The Certificate of Designation creates 9,704,813 shares of Series Q Convertible Preferred Stock with the preferences and rights
described below. The Certificate of Designation was filed with the Secretary of State of the State of Delaware on June&nbsp;30, 2006, and amended on July&nbsp;3, 2006. The following description is qualified in its entirety by the Certificate of
Designation and the amendment thereto set forth at Exhibits 3.1 and 3.2 to this current report. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Reasons for the Creation of the
Preferred Stock.</I> On July&nbsp;3, 2006, the Company and CD&amp;L signed a merger agreement pursuant to which CD&amp;L Acquisition Corp., a wholly owned subsidiary of the Company, will be merged with and into CD&amp;L. The Company created the
Series Q Convertible Preferred Stock described herein in anticipation of the transactions contemplated by the merger agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><I>Description of the Series Q Convertible Preferred Stock</I>. The Certificate of Designation creates
9,704,813 shares of Series&nbsp;Q Convertible Preferred Stock, par value $0.004 per share. Each share of Series Q Convertible Preferred Stock is initially convertible into 9.0909 shares of common stock, subject to adjustment. Additional terms of the
Series Q Convertible Preferred Stock include the following: </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Cumulative dividends at the rate of six percent per annum on the stated value of $10.00 per share are payable quarterly in arrears. Dividends on the Series Q Convertible Preferred
Stock are in preference to, and priority over, distributions with respect to all other outstanding classes or series of the Company&#146;s capital stock (other than dividends payable solely in shares of common stock). At the election of the Company,
dividends on the Series Q Convertible Preferred Stock are payable in shares of Series Q Convertible Preferred Stock (&#147;<U>PIK Shares</U>&#148;); <U>provided</U>, <U>however</U>, that PIK Shares may not be issued without the consent of the
holders of at least 70 percent of the outstanding Series Q Convertible Preferred Stock unless the shares of common stock into which the PIK Shares are convertible have been registered for immediate resale under the Securities Act of 1933, as
amended. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Upon the liquidation, dissolution or winding up of the Company, holders of shares of Series Q Convertible Preferred Stock are entitled to a payment equal to the shares&#146; stated
value plus any accrued and unpaid dividends before payment is made with respect to any other outstanding classes or series of the Company&#146;s capital stock. </FONT></TD></TR></TABLE> <P
STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Company may elect to redeem the outstanding shares of Series Q Convertible Preferred Stock at any time for an amount equal to 125 percent of their stated value plus accrued and
unpaid dividends. Upon the occurrence of any of the following events, the Company shall be obligated to redeem all outstanding shares of Series Q Convertible Preferred Stock (subject to the right of each holder of Series Q Convertible Preferred
Stock to reject redemption) at a price equal to their stated value, all accrued and unpaid dividends, and a redemption premium of 50 percent of the annual dividend payable with respect to the Series Q Convertible Preferred Stock:
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(i)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the acquisition of CD&amp;L by a party other than the Company; </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(ii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the termination of the Company&#146;s agreement to acquire CD&amp;L; or </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="8%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="5%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">(iii)</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">the failure of the Company to consummate the acquisition of CD&amp;L within 270 days following the Company&#146;s issuance of the Series Q Convertible Preferred Stock.
</FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The price at which the Series Q Convertible Preferred Stock may be converted into shares of common stock is subject to reduction as a result of subsequent issuances of common stock
(or securities convertible into or exercisable for common stock) at a price per share of common stock less than the Series Q Convertible Preferred Stock Conversion Price, excluding: (i)&nbsp;issuances of common stock pursuant to employee stock
option grants; (ii)&nbsp;issuances of common stock upon exercise or conversion of options or convertible securities outstanding on the date shares of Series Q Convertible Preferred Stock are issued; (iii)&nbsp;issuances of PIK Shares; and
(iv)&nbsp;issuances of payment-in-kind dividends made with respect to other outstanding classes or series of the Company&#146;s preferred stock. </FONT></TD></TR></TABLE> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Company is entitled to force holders of the Series Q Convertible Preferred Stock to convert their shares into common stock if and when the daily weighted average market price of
the common stock is equal to or greater than 200 percent of the then applicable Series Q Convertible Preferred Stock conversion price for a specified period of time and the shares of common stock issuable upon conversion of the Series Q Convertible
Preferred Stock have been registered for resale under applicable federal and state securities laws. </FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2">&#149;</FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">The Series Q Convertible Preferred Stock will not be convertible until the issuance of the common stock upon conversion has been approved by the stockholders of the Company in
compliance with Nasdaq Marketplace Rule 4350(i)(1) and Regulation 14C under the Securities Exchange Act of 1934, as amended. </FONT></TD></TR></TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><I>Effect on Holders of Common Stock. </I>Holders of the Company&#146;s common stock will be subordinate to the holders of the Company&#146;s Series Q Convertible Preferred Stock in the distribution of dividends and liquidation.
Furthermore, holders of the Company&#146;s Series Q Convertible Preferred Stock may convert their shares of preferred stock into common stock. The Company&#146;s shareholders will experience significant dilution if the holders of its Series Q
Convertible Preferred Stock exercise their rights to convert. In addition, the issuance of Series Q Convertible Preferred Stock can make any attempt to gain control of the Company or remove management more difficult, costly or time consuming since
the voting power of the shares of Series Q Convertible Preferred Stock will increase the number of voting shares necessary to acquire control or to meet the voting requirements imposed by state law with respect to certain corporate activities.<I>
</I></FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The contents of Item&nbsp;3.03 above are incorporated herein by reference in their entirety. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A complete copy of the Company&#146;s Amended and Restated Certificate of Incorporation, as amended to date, will be attached as an exhibit to the
Company&#146;s next periodic report. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>Item&nbsp;9.01 Financial Statements and Exhibits </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) Exhibits. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">See &#147;Exhibit Index.&#148;
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD WIDTH="48%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="48%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date: July&nbsp;6, 2006</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">Velocity Express Corporation</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Edward W. Stone</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Edward W. Stone</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT INDEX </B></FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="4%"></TD>
<TD WIDTH="93%"></TD></TR>
<TR>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="1"><B>Exhibit</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman"
SIZE="1"><B>Number</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="border-bottom:1px solid #000000"> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="1"><B>Description</B></FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Certificate of Designations, Preferences and Rights of Series Q Convertible Preferred Stock of Velocity Express Corporation, filed June 30, 2006.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">3.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Amended Certificate of Designation of Series Q Convertible Preferred Stock of Velocity Express Corporation, filed July 3, 2006.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">4</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">See Exhibits 3.1 and 3.2.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">10.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Reimbursement Agreement by and between Velocity Express Corporation and TH Lee Putnam Ventures, dated effective June 29, 2006.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">10.2</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Form of Voting, Consent, Amendment and Waiver Agreement for Holders of Common Stock and Series M, N, and O Convertible Preferred Stock, dated effective June 29, 2006.</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">10.3</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Form of Consent, Amendment and Waiver Agreement for Holders of Series P Convertible Preferred Stock, dated effective June 29, 2006.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>dex31.htm
<DESCRIPTION>CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
<TEXT>
<HTML><HEAD>
<TITLE>Certificate of Designations, Preferences and Rights</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 3.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>OF </B></FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SERIES Q CONVERTIBLE PREFERRED STOCK </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2"><B>OF </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>VELOCITY EXPRESS CORPORATION </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>(Pursuant to Section&nbsp;151 of the </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>Delaware General Corporation Law) </B></FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Velocity Express Corporation, a corporation organized and existing under the laws of the state of Delaware (the &#147;Company&#148;), hereby certifies
that, pursuant to authority vested in the Board of Directors of the Company by Article IV of the Certificate of Incorporation of the Company, the following resolution was adopted as of June&nbsp;26, 2006 by the Board of Directors of the Company
pursuant to Section&nbsp;151 of the Delaware General Corporation Law: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;RESOLVED that, pursuant to authority vested in the Board of
Directors of the Company by Article IV of the Company&#146;s Certificate of Incorporation, out of the total authorized number of 299,515,270 shares of its preferred stock, par value $0.004 per share (&#147;Preferred Stock&#148;), there shall be
designated a series of 9,704,813 shares which shall be issued in and constitute a single series to be known as &#147;Series Q Convertible Preferred Stock&#148; (hereinafter referred to as the &#147;Series Q Preferred Stock&#148;). The shares of
Series Q Preferred Stock have the voting powers, designations, preferences and other special rights, and qualifications, limitations and restrictions thereof set forth below: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">1. <U>Certain Definitions</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">As used in this Certificate of Designations, Preferences and Rights of
Series Q Convertible Preferred Stock of Velocity Express Corporation, the following terms shall have the respective meanings set forth below: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">&#147;<U>Additional Rights</U>&#148; has the meaning set forth in Section&nbsp;5E(6). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Additional Shares of Common
Stock</U>&#148; has the meaning set forth in Section&nbsp;5E. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Affiliate</U>&#148;, as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, &#147;control&#148; (including, with correlative meanings, the terms &#147;controlling&#148;, &#147;controlled
by&#148; and &#147;under common control with&#148;), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership
of voting securities or by contract or otherwise. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Board of Directors</U>&#148; or &#147;<U>Board</U>&#148; means the board of
directors of the Company. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Bulletin Board</U>&#148; has the meaning set forth in Section&nbsp;5G. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Business Day</U>&#148; means a day, other than a Saturday or Sunday, on which banks in New York City are open for the general transaction of
business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Buy-In</U>&#148; has the meaning set forth in Section&nbsp;5D. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Capital Stock</U>&#148; means (i)&nbsp;in the case of a corporation, corporate stock, (ii)&nbsp;in the case of an association or business
entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock, (iii)&nbsp;in the case of a partnership, partnership interests (whether general or limited), (iv)&nbsp;any other interest or
participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (v)&nbsp;all warrants, options or other rights to acquire any item listed in (i)&nbsp;through
(iv)&nbsp;of this definition. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Closing Date&#148;</U> means the Closing Date as defined in the Series Q Preferred Stock Purchase
Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Common Stock</U>&#148; means the common stock, $0.004 par value per share, of the Company, including the stock into
which the Series Q Preferred Stock is convertible, and any securities into which the Common Stock may be reclassified. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Common
Stock Equivalents</U>&#148; means any securities of the Company or any Subsidiary which entitled the holder thereof to acquire Common Stock at any time, including, without limitation, any debt, preferred stock, rights, Options (as defined in
Section&nbsp;5E(1)), warrants, Convertible Securities (as defined in Section&nbsp;5E(1)) or other instrument that is at any time convertible into or exchangeable or exercisable for, or otherwise entitles the holder thereof to receive, Common Stock
or other securities that entitle the holder to receive, directly or indirectly, Common Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Conversion Price</U>&#148; has the
meaning set forth in Section&nbsp;5A. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Convertible Securities</U>&#148; has the meaning set forth in Section&nbsp;5E(1).
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Corporate Transaction</U>&#148; has the meaning set forth in Section&nbsp;3. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Dividend Payment Date</U>&#148; has the meaning set forth in Section&nbsp;2(a). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Equity Line of Credit</U>&#148; has the meaning set forth in Section&nbsp;6. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Excluded Stock</U>&#148; means (A)&nbsp;Capital Stock, Options or Convertible Securities issued to employees, officers or directors of the
Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose,
(B)&nbsp;shares of Common Stock issued upon the conversion or exercise of Options or Convertible Securities or other rights issued on or prior to the date hereof, provided that such securities have not been amended since the date hereof,
(C)&nbsp;shares of Common Stock issued or issuable by reason of a dividend, stock split or other distribution on shares of Common Stock </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">(but only to the extent that such a dividend, split or distribution results in an adjustment in the Conversion Price pursuant to the other provisions of this
Series Q Preferred Stock) and (D)&nbsp;PIK Shares (as defined in Section&nbsp;2(b)), the Warrant Shares and shares issued as payment-in&#150;kind dividends with respect to other series of the Company&#146;s Preferred Stock. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Forced Conversion</U>&#148; has the meaning set forth in Section&nbsp;5B. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Junior Capital Stock</U>&#148; shall mean (A)&nbsp;the Common Stock, (B)&nbsp;Common Stock Equivalents of the Company, (C)&nbsp;all existing or
hereafter created series of Preferred Stock of the Company and (D)&nbsp;all other existing or hereinafter created equity securities of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">&#147;<U>Liquidation Preference</U>&#148; has the meaning set forth in Section&nbsp;3. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Mandatory Redemption
Date</U>&#148; has the meaning set forth in Section&nbsp;4B. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Mandatory Redemption Price</U>&#148; has the meaning set forth in
Section&nbsp;4B. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Market Price</U>&#148; has the meaning set forth in Section&nbsp;5G. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Nasdaq</U>&#148; has the meaning set forth in Section&nbsp;5G. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">&#147;<U>Notes</U>&#148; shall mean the Company&#146;s 12% Senior Secured Notes due 2010 issued pursuant to the Indenture dated June&nbsp;30, 2006 by and between the Company and Wells Fargo, N.A., as Trustee (the
&#147;Indenture&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Offered Shares</U>&#148; has the meaning set forth in Section&nbsp;7(a). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Options</U>&#148; has the meaning set forth in Section&nbsp;5E(1). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Person</U>&#148; shall be construed in the broadest sense and means and includes any natural person, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a joint venture, an unincorporated organization and other entity or governmental or quasi-governmental entity. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>PIK Shares</U>&#148; has the meaning set forth in Section&nbsp;2(b). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Price Reset</U>&#148; has the meaning set forth in Section&nbsp;6. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Readjustment Event</U>&#148; has the meaning set forth in Section&nbsp;5E(3). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Redemption Date</U>&#148; has the meaning set forth in Section&nbsp;4A. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Redemption Premium</U>&#148; has the meaning set forth in Section&nbsp;4B. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Redemption Price</U>&#148; has the meaning set forth in Section&nbsp;4A. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Registration Rights Agreement</U>&#148; means the Registration Rights Agreement dated as of June&nbsp;30, 2006 by and among the Company, the
purchasers of Series Q Preferred Stock, the purchasers of the Company&#146;s 12% Senior Secured Notes and Warrants and the other parties named therein. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><U>&#147;Registration Statement&#148;</U> means that certain shelf registration statement required to be
filed pursuant to the terms of the Registration Rights Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Sale Notice</U>&#148; has the meaning set forth in
Section&nbsp;7(a). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Securities Act</U>&#148; has the meaning set forth in Section&nbsp;2(b). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Series Q Dividends</U>&#148; has the meaning set forth in Section&nbsp;2(a). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Series Q Preferred Stock Purchase Agreement&#148;</U> means that certain Stock Purchase Agreement dated June&nbsp;30, 2006 by and among the
Company and the investors named therein for the purchase and sale of Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Special Redemption
Trigger</U>&#148; shall mean the earliest to occur of the following: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(i) the closing or consummation of a Target
Alternative Transaction; or </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(ii) effectiveness of termination of the Merger Agreement by any party or for any reason; or
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(iii) failure for any other reason of the closing under the Merger Agreement to occur on or prior to the date 270 days
after the date hereof, regardless of the disposition or status at such time of the Merger Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Stated Value</U>&#148; has
the meaning set forth in Section&nbsp;2(a). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Subsidiary</U>&#148; means any corporation, association or other business entity
(i)&nbsp;at least 50% of the outstanding voting securities of which are at the time owned or controlled, directly or indirectly, by the Company; or (ii)&nbsp;with respect to which the Company possesses, directly or indirectly, the power to direct or
cause the direction of the affairs or management of such Person. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Target</U>&#148; means CD&amp;L, Inc., a Delaware corporation.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Target Acquisition</U>&#148; means the merger of Cobra Acquisition Corp., a newly-formed wholly-owned Subsidiary of the Company
(&#147;Merger Sub&#148;), and Target, pursuant to the terms of an Agreement and Plan of Merger dated June&nbsp;30, 2006 (&#147;Merger Agreement&#148;), by and among the Company, Merger Sub and Target. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Target Alternative Transaction</U>&#148; means the merger or acquisition of or with respect to Target, as directed by Target&#146;s Board of
Directors in the exercise of its fiduciary responsibilities, consummated or to be consummated by or with any Person, on any terms or otherwise in any manner other than consummation of the closing pursuant to the terms and conditions as documented
and agreed in the Merger Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Threshold Trading Period</U>&#148; has the meaning set forth in Section&nbsp;5B. </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Trigger Issuance</U>&#148; has the meaning set forth in Section&nbsp;5E. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Variable Priced Equity Linked Instruments</U>&#148; has the meaning set forth in Section&nbsp;6. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Valuation Date</U>&#148; has the meaning set forth in Section&nbsp;5G. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>VWAP</U>&#148; shall mean, with respect to any date of determination, the daily volume weighted average price (determined using data provided by
Bloomberg L.P. (or, if Bloomberg L.P. terminates such reporting, then using such other reporting system as the Board of Directors may designate in good faith)) of the Common Stock on the NASDAQ Capital Market (or any other securities exchange on
which the Common Stock is then traded or included for quotation) on such date of determination, or if there is no such price on such date of determination, then the daily volume weighted average price of the Common Stock on the date nearest
preceding such date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Warrants</U>&#148; shall mean stock purchase warrants of the Company issued pursuant to that certain Note
and Warrant Purchase Agreement dated June&nbsp;30, 2006 by and among the Company and the investors named therein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Warrant
Shares</U>&#148; shall mean Common Stock of the Company issued upon exercise of the Warrants. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">2. <U>Dividends</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) The holders of shares of Series Q Preferred Stock shall be entitled, in preference to the holders of any Junior Capital Stock to receive when and as
declared by the Board of Directors out of funds legally available therefor dividends (the &#147;Series Q Dividends&#148;) on the Series Q Preferred Stock in cash, subject to any payment restrictions contained in any indenture, note or other
agreement evidencing the Company&#146;s indebtedness, at the rate of six percent (6%)&nbsp;per annum on the stated value of each share of Series Q Preferred Stock of $10.00, adjusted proportionately for any stock split, reverse stock split, stock
dividend or other reclassification or combination occurring after the date hereof (the &#147;Stated Value&#148;). The Series Q Dividends shall be cumulative, whether or not earned or declared, and shall be payable quarterly in arrears on the first
day of October, January, April and July in each year (each a &#147;Dividend Payment Date&#148;) and if such date is not a Business Day then the next succeeding Business Day. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) At the election of the Company, the Series Q Dividends may be paid: (i)&nbsp;by issuing each holder of Series Q Preferred Stock such number of shares
of Series Q Preferred Stock equal to the Series Q Dividend divided by the Series Q Preferred Stock Stated Value (hereinafter &#147;PIK Shares&#148;); or (ii)&nbsp;in cash out of legally available funds therefor. Any election by the Company to pay
dividends in shares of Series Q Preferred Stock or cash shall be made uniformly with respect to all outstanding shares of Series Q Preferred Stock for a given dividend period. The Company shall deliver written notice to each holder indicating the
manner in which it intends to pay the Series Q Dividend at least five Business Days prior to each Dividend Payment Date, but may indicate in such notice that the election contained therein shall continue for subsequent Dividend Payment Dates until
revised. Failure to provide timely written notice shall be deemed an election by the Company to pay such dividends in cash. The Company may not deliver PIK Shares at any time when the shares of Common Stock into which such PIK </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Shares are convertible shall not be registered for immediate resale by the holders thereof under the Securities Act of 1933, as amended (the &#147;Securities
Act&#148;) and/or other applicable federal or state securities law, rules and regulations; provided, that, with the approval of at least 70% of the Series Q Preferred Stock then outstanding given prior to the relevant Dividend Payment Date, the
Company may pay the Series Q Dividend by delivering PIK Shares when the shares of Common Stock into which such PIK Shares are convertible are not registered for immediate resale. In addition to the foregoing, the Company shall be entitled to effect
such election to pay Series Q Dividends using PIK Shares only for so long as the Common Stock of the Company is listed or quoted, without any stop-trade order or other suspension in trading (whether or not initiated by the Company), on such
exchanges or trading systems as permit the resale of the Common Stock on the applicable dividend payment date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) No cash or other value
dividends shall be paid on any Junior Capital Stock of the Company during any fiscal year of the Company until all accumulated Series Q Dividends (with respect to the current fiscal year and all prior fiscal years) shall have been paid to the
holders of Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) In the event that the Company declares or pays any dividends upon any class or series of its
Capital Stock (whether payable in cash, securities or other property) other than dividends payable solely in shares of Common Stock, and other than cumulative dividends payable with respect to any other series of the Company&#146;s Preferred Stock
in accordance with the terms of the Company&#146;s Certificate of Incorporation, the Company shall also declare and pay to the holders of the Series Q Preferred Stock at the same time that it declares and pays such dividends to the holders of the
Capital Stock, the dividends which would have been declared and paid with respect to the Common Stock issuable upon conversion of the Series Q Preferred Stock had all of the outstanding Series Q 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 Capital Stock entitled to such dividends are to be determined. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT
FACE="Times New Roman" SIZE="2">3. <U>Liquidation</U>. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the shares of Series Q Preferred Stock shall rank senior to the holders of all
Junior Capital Stock of the Company and shall be entitled to be paid an amount per share equal to the Series Q Preferred Stock Stated Value plus any accumulated, accrued, earned or declared and unpaid Series Q Dividends (the &#147;Liquidation
Preference&#148;). No modification of this Liquidation Preference shall be made without the prior written approval of holders of at least a majority of the then outstanding Series Q Preferred Stock. If, upon such liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary, the assets to be distributed among the holders of the Series Q Preferred Stock and any class or series of Capital Stock ranking on a parity with the Series Q Preferred Stock as to such
distributions shall be insufficient to permit payment to the holders of the Series Q Preferred Stock and such class or series of Capital Stock of their respective liquidation amount, then the entire assets of the Company to be distributed shall be
distributed pro rata to the holders of Series Q Preferred Stock. Prior to the time of any liquidation, dissolution, dissolution or winding up of the Company, the Company shall declare, or shall be deemed to have declared, for payment all
accumulated, accrued or earned but not yet paid dividends with respect to the Series Q Preferred Stock as to such distributions according to the preferential amounts due thereon. Unless waived in writing by the holders of at least 62.5% of the
Series Q Preferred Stock then outstanding, </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">voting together as one class, a consolidation or merger of the Company into or with any other entity or entities, or the sale or transfer by the Company of
all or substantially all of its assets, in each case under circumstances in which the holders of a majority in voting power of the outstanding capital stock of the Company, immediately prior to such a merger, consolidation or sale, own less than a
majority in voting power of the outstanding capital stock of the corporation or the surviving or resulting corporation or acquirer, as the case may be, immediately following such a merger, consolidation or sale (each such transaction being
hereinafter referred to as a &#147;Corporate Transaction&#148;) shall be deemed to be a liquidation within the meaning of this Section&nbsp;3. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">4.
<U>Redemption</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4A. <U>Redemption at the Option of the Company</U>. The Company shall have the right and option to redeem all of the
Series Q Preferred Stock on the following terms and conditions: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) The Series Q Preferred Stock is redeemable at the option of the Company
at any time after the date on which the registration statement has been declared effective out of funds legally available for redemptions. Immediately prior to authorizing or making any such redemption with respect to the Series Q Preferred Stock
(and in no event later than the date specified for redemption in the redemption notice described below), the Company, by resolution of its Board of Directors, shall declare, or be deemed to have declared, a dividend on the Series Q Preferred Stock
to be redeemed, which shall be in an amount equal to any accrued, accumulated or earned and unpaid Series Q Dividends up to and including the date designated for such redemption (the &#147;Redemption Date&#148;). Redemption shall be made on the
Redemption Date at a redemption price per share of Series Q Preferred Stock equal to 125 percent of the Stated Value thereof as of the Redemption Date plus the amount in cash equal to all Series Q Dividends unpaid, accumulated, accrued or earned
thereon and declared (or deemed declared) by the Board pursuant to the preceding sentence (the &#147;Redemption Price&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Notice
of any redemption pursuant to this Section&nbsp;4A shall be mailed at least 20 days in advance of the Redemption Date to the holders of record of Series Q Preferred Stock at their respective addresses shown in the records of the Company. Each such
notice shall state: (i)&nbsp;the Redemption Date; (ii)&nbsp;the Redemption Price per share; (iii)&nbsp;the place or places where certificates for such shares of Series Q Preferred Stock are to be surrendered for payment of the redemption price; and
(iv)&nbsp;that dividends on the shares of Series Q Preferred Stock to be redeemed will cease to accrue as of the Redemption Date. To facilitate the redemption of the Series Q Preferred Stock, the Board of Directors may fix a record date for the
determination of holders of Series Q Preferred Stock to be redeemed not more than 60 days prior to the Redemption Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) On or before
the Redemption Date, each holder of Series Q Preferred Stock shall surrender to the Company the certificates representing the shares redeemed, duly endorsed or assigned to the Company, and the holder shall thereafter be entitled to receive payment
of the Redemption Price. In case fewer than the total number of Series Q Preferred Stock represented by any certificate are redeemed, a new certificate representing the number of unredeemed Series&nbsp;Q Preferred Stock shall be issued to the holder
thereof without cost to such holder within 3 Business Days after surrender of the certificate representing the Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) On the Redemption Date and subject to the complete satisfaction by the Company of its obligations due
to the holders of the Series Q Preferred Stock including without limitation the Company&#146;s obligation to make in full the deposit described in Section&nbsp;4A(e) below: (i)&nbsp;dividends on the Series Q Preferred Stock called for redemption
shall cease to accrue; (ii)&nbsp;such shares of Series Q Preferred Stock shall be deemed no longer outstanding; and (iii)&nbsp;all rights of such holder as a holder of Series Q Preferred Stock (except the right to receive from the Company the
Redemption Price payable upon surrender of certificates representing such shares of Series Q Preferred Stock), including the right to convert the Series Q Preferred Stock, shall cease. Notwithstanding the delivery to any holder of Series Q Preferred
Stock of a redemption notice described above, if, prior to the close of business on the Business Day preceding the Redemption Date, such holder gives written notice to the Company of its election to convert all of any part of such holder&#146;s
shares of Series Q Preferred Stock into shares of Common Stock, pursuant to Section&nbsp;5 below (accompanied by a certificate or certificates for such shares, duly endorsed or assigned to the Company), then such shares of Series Q Preferred Stock
that were otherwise scheduled to be redeemed shall instead be converted into shares of Common Stock as provided in Section&nbsp;5 hereof as of the Redemption Date. The Company shall be prohibited from redeeming any holder&#146;s Series Q Preferred
Stock under this Section&nbsp;4A at any time the holder is unable to convert such Series Q Preferred Stock under Section&nbsp;5A into shares of Common Stock registered for immediate resale under the Securities Act and/or other applicable federal or
state securities law, rules and regulations. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(e) The Company shall, on or after any Redemption Date, deposit with its transfer agent or
other redemption agent selected by the Board of Directors, as a trust fund, a sufficient sum to redeem, on the Redemption Date, the shares of Series Q Preferred Stock then called for redemption, with instructions and authority to such transfer agent
or other redemption agent to pay the Redemption Price on or after the Redemption Date upon receipt of certificates representing the shares of Series Q Preferred Stock then being redeemed. Any funds so deposited and unclaimed at the end of two years
from such Redemption Date shall be released or repaid to the Company, after which the holders of the shares so called for redemption shall be entitled to receive payment of the Redemption Price only from the Company. Any interest accrued on any
funds deposited shall belong to the Company, and shall be paid to it from time to time on demand. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(f) So long as any Series Q Preferred
Stock remains outstanding, neither the Company nor any Subsidiary shall redeem or otherwise acquire any Series Q Preferred Stock, except as expressly authorized in this Series Q Certificate of Designations. So long as any Series Q Preferred Stock
remains outstanding, neither the Company nor any Subsidiary shall redeem or otherwise repurchase any Junior Capital Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4B.
<U>Mandatory Redemption</U>. Upon the Special Redemption Trigger, the Company shall be required to effect the redemption of all outstanding shares of Series Q Preferred Stock as of the date which is twenty (20)&nbsp;Business Days after the date of
the Special Redemption Trigger (the &#147;Mandatory Redemption Date&#148;) at a redemption price per share of Series Q Preferred Stock equal to the Stated Value thereof, together with accrued, accumulated, earned or declared and unpaid Series Q
Dividends prorated to the Mandatory Redemption Date (the &#147;Mandatory Redemption Price&#148;), together with a redemption premium per share of Series Q Preferred Stock equal to 50 percent of the annual dividend payable with respect to such share
of Series Q </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Preferred Stock (the &#147;Redemption Premium&#148;). The Mandatory Redemption Price per share of Series Q Preferred Stock shall be paid in cash by the
Company. The Redemption Premium shall, at the option of the Company, be payable in either cash or shares of the Company&#146;s Common Stock, which shares shall be valued at the VWAP for ten trading days ending on the date preceding the Mandatory
Redemption Date; provided, that the Company may not deliver Common Stock in payment of the Redemption Premium at any time when such shares of Common Stock shall not be registered for immediate resale by the holders thereof under the Securities Act
and/or other applicable federal or state securities law, rules and regulations. On and after the Mandatory Redemption Date, subject to each holder&#146;s option to decline redemption pursuant to Section&nbsp;4B(b) below, all rights of holders of the
Series Q Preferred Stock hereunder (including the right to receive dividends) shall cease to exist except for the right to receive the Mandatory Redemption Price and the Redemption Premium. The Company shall not redeem any Series Q Preferred Stock
pursuant to this Section&nbsp;4B until all of the Company&#146;s obligations to effect a Special Mandatory Redemption (as defined in the Indenture) under the terms of the Indenture have been satisfied. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) Upon the occurrence of a Special Redemption Trigger, notice of the Mandatory Redemption Date will be promptly delivered by nationally recognized
overnight courier to each holder of the Series Q Preferred Stock at his, her or its last address as the same appears on the register maintained by the Company. The notice shall state that the Series Q Preferred Stock will be redeemed (including the
CUSIP Number thereof) and shall set forth: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(i) The Mandatory Redemption Date; </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(ii) The Mandatory Redemption Price and the Redemption Premium; </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(iii) A statement that certificates representing the shares of Series Q Preferred Stock must be surrendered to the Company to receive the
Mandatory Redemption Price and the Redemption Premium; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(iv) A statement that unless the Company defaults in the making of
the Special Mandatory Redemption (including the payment in full of the Mandatory Redemption Price and the Redemption Premium), all rights of holders of Series Q Preferred Stock hereunder (including the right to receive dividends) shall cease to
exist on and after the Mandatory Redemption Date; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(v) A statement that the Special Mandatory Redemption is being
effected pursuant to Section&nbsp;4B hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The Company shall, promptly following delivery of the notice of the Mandatory Redemption Date, deposit with
its transfer agent or other redemption agent selected by the Board of Directors, as a trust fund, a sufficient sum of cash and, to the extent used to pay the Redemption Premium, shares of the Company&#146;s Common Stock, to redeem, on the Mandatory
Redemption Date, the shares of Series Q Preferred Stock then called for redemption, with instructions and authority to such transfer agent or other redemption agent to pay the Mandatory Redemption Price and Redemption Premium on or after the
Mandatory Redemption Date upon receipt of certificates representing the shares of Series Q Preferred Stock then being redeemed. Any funds </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">and shares so deposited and unclaimed at the end of two years from such Mandatory Redemption Date shall be released or repaid to the Company, after which the
holders of the shares so called for redemption shall be entitled to receive payment of the Mandatory Redemption Price and Redemption Premium only from the Company. Any interest accrued on any funds deposited shall belong to the Company, and shall be
paid to it from time to time on demand. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Once the Notice of Special Redemption described in Section&nbsp;4B(a) is mailed, the Company
shall be obligated to redeem the Series Q Preferred Stock on the Mandatory Redemption Date at the Mandatory Redemption Price plus the Redemption Premium; provided, however, that each holder of Series Q Preferred Stock may, by written notice to the
Company given not later than five (5)&nbsp;Business Days preceding the Mandatory Redemption Date, decline to have its shares of Series Q Preferred Stock redeemed by the Company under this Section&nbsp;4B, and to retain ownership of its Series Q
Preferred Stock following the Mandatory Redemption Date. If the Mandatory Redemption Date is a legal holiday, payment shall be made on the next succeeding Business Day and no interest or dividends shall accrue thereon for the period from such
Mandatory Redemption Date to such succeeding Business Day. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">5. <U>Conversion</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5A. <U>Right to Convert</U>. Subject to the terms and conditions of this Section&nbsp;5A, the holder of any share or shares of Series Q Preferred Stock
shall be entitled, at any time and from time to time, to convert any such shares of Series Q Preferred Stock into the number of fully paid and nonassessable whole shares of Common Stock obtained by multiplying the number of shares of Series Q
Preferred Stock to be converted by the Liquidation Preference per share and dividing the result by the initial conversion price of $1.10 per share or, if there has been an adjustment of the initial conversion price, by the conversion price as last
adjusted and in effect at the date any share or shares of Series Q Preferred Stock are surrendered for conversion (such price, or such price as last adjusted, being referred to herein as the &#147;Conversion Price&#148;). Such rights of conversion
shall be exercised by the holder thereof by surrender of a certificate or certificates for the shares to be converted (or if lost, a Certificate of Lost Affidavit attesting to the loss of the certificate(s) representing the Series Q Preferred Stock
shares), to the Company at its principal office and to the Company&#146;s transfer agent (or such other office or agency of the Company as the Company may designate by notice in writing to the holder or holders of the Series Q Preferred Stock) at
any time during their usual business hours on the date set forth in such notice, together with a properly completed notice of conversion in the form attached to the Series Q Preferred Stock certificate with a statement of the name or names (with
address), in which the certificate or certificates for shares of Common Stock, shall be issued (subject to compliance with applicable laws to the extent such designation shall involve a transfer). Such conversion shall be deemed to have been
effected and the Conversion Price shall be determined as of the close of business on the date on which such written notice shall have been received by the Company and the Company&#146;s transfer agent and the certificate or certificates for such
shares of Series Q Preferred Stock shall have been surrendered as aforesaid. Within five Business Days following receipt of such certificates, the Company shall issue and deliver, or cause to be issued and delivered, to the holder, registered in
such name or names as such holder may direct (subject to compliance with applicable laws to the extent such designation shall involve a transfer) a certificate or certificates for the number of whole shares of Common Stock issuable upon the
conversion of such share or shares of Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">No conversion of the Series Q Preferred Stock may be effected by the holders thereof or by the Company
pursuant to Section&nbsp;5 hereof unless and until the issuance of the Common Stock upon conversion of the Series Q Preferred Stock has been approved by the stockholders of the Company in compliance with Nasdaq Marketplace Rule 4350(i)(1) and
Regulation 14C under the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;). If such stockholder approval is not effective within 120 days following the Closing Date (the &#147;Approval Deadline&#148;), then the Company will
make pro rata payments to each holder of Series Q Preferred Stock, as liquidated damages and not as a penalty, in an amount equal to one percent (1%)&nbsp;of the aggregate purchase price paid for the Series Q Preferred Stock then held by such holder
(which amount shall include the original purchase price paid by such holder pursuant to the Series Q Preferred Stock Purchase Agreement for the Series Q Preferred Stock) for each 30-day period or pro rata for any portion thereof following the
Approval Deadline until such stockholder approval is effective. Such payments shall be in partial compensation to the holders, and shall not constitute the holders&#146; exclusive remedy for such events. The amounts payable as liquidated damages
pursuant to this paragraph shall be paid monthly within three (3)&nbsp;business days of the last day of each month following the Approval Deadline until such stockholder approval is effective. Such payments shall be made to each holder in cash.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5B. <U>Forced Conversion</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(a) All or any part of the Series Q Preferred Stock may be converted into shares of Common Stock at the option of the Company at any time after the first anniversary of the Closing Date (the &#147;Forced Conversion&#148;): (i)&nbsp;when the
average daily VWAP of the Common Stock for 20 out of 30 consecutive trading days (the &#147;Threshold Trading Period&#148;) is equal to or greater than 200 percent of the Conversion Price; and (ii)&nbsp;a registration statement has been filed and
has become effective with the U.S. Securities and Exchange Commission to permit resale of the Common Stock issuable upon the conversion of the Series Q Preferred Stock.<B> </B>There may be successive Forced Conversions; <U>provided</U>,
<U>however</U>, that the value of the number of shares of Series Q Preferred Stock that may be subject to Forced Conversion in any calendar month may not exceed 20 percent of the notional value of the Common Stock traded during the previous
Threshold Trading Period. In the event that the Company opts to convert less than all outstanding shares of Series Q Preferred Stock in respect of any Forced Conversion, the shares of Series Q Preferred Stock subject to such Forced Conversion shall
be selected on a pro rata basis from the shares of Series Q Preferred Stock held by all holders of Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Upon any
Forced Conversion, each holder of certificates for shares of Series Q Preferred Stock that are subject to such Forced Conversion shall, following receipt of the notice specified in Section&nbsp;5(B)(c) hereof, promptly surrender to the
Company&#146;s transfer agent such certificates in exchange for appropriate stock certificates representing the number of shares of Common Stock of the Company into which such shares of Series Q Preferred Stock are to be converted. Each holder of
shares of Series Q Preferred Stock that is subject to a Forced Conversion shall be entitled to receive the full number of shares of Common Stock into which such shares of Series Q Preferred Stock held by such holder could be converted if such holder
had exercised its conversion right pursuant to Section&nbsp;5A on the last day of the applicable Threshold Trading Period. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">11 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company opts to effect a Forced Conversion, the Company shall mail written
notice to each holder of record of the shares of Series Q Preferred Stock subject to such Forced Conversion a notice setting forth: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(i) A
statement that the average daily VWAP for the Common Stock of the Company was equal or greater than 200% of the Conversion Price during the Threshold Trading Period specified in the notice; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(ii) That the conditions for a Forced Conversion have occurred and that the Company has opted to effect a Forced Conversion of the aggregate number of
shares of Series Q Preferred Stock specified in the notice as of the date specified in the notice (the &#147;Forced Conversion Date&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(iii) The number of shares of Series Q Preferred Stock held by that holder that are subject to the Forced Conversion; the then applicable Conversion Price; the number of shares of Common Stock into which such shares of Series Q Preferred
Stock will be converted; and a Letter of Transmittal to the Company&#146;s transfer agent. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5C. <U>Issuance of Certificates; Time
Conversion Effected</U>. In connection with any conversion of Series Q Preferred Stock pursuant to Section&nbsp;5B each holder of share of Series Q Preferred Stock to be converted shall promptly after receipt of the notice specified in
Section&nbsp;5(B)(c) above deliver to the Company&#146;s transfer agent certificates representing the Series Q Preferred Stock shares so converted, duly endorsed for transfer (or if lost, a Certificate of Lost Affidavit attesting to the loss of the
certificate representing the Series Q Preferred Stock shares), together with a properly completed notice of conversion in the form attached to the Series Q Preferred Stock certificate with a statement of the name or names (with address), in which
the certificate or certificates for shares of Common Stock, shall be issued (subject to compliance with applicable laws to the extent such designation shall involve a transfer). Such conversion shall be deemed to have been effected and the
Conversion Price shall be determined as of the close of business on the Forced Conversion Date. Within five Business Days following receipt of such certificates, (i)&nbsp;provided that the Company&#146;s transfer agent (the &#147;Transfer
Agent&#148;) is participating in the Depository Trust Company&#146;s (&#147;DTC&#148;) Fast Automated Securities Transfer Program, the Transfer Agent will credit such aggregate number of shares of Common Stock to which the converting holder of
shares of Series Q Preferred Stock shall be entitled to such holder&#146;s or its designee&#146;s balance account with DTC through its Deposit Withdrawal Agent Commission system, or (ii)&nbsp;if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, issue and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of such holder or its designee, for the number of shares of Common Stock to which the holder
shall be entitled (subject to compliance with applicable laws to the extent such designation shall involve a transfer). Subject to the last sentence of this Section&nbsp;5C, upon the effective date of any conversion pursuant to this Section&nbsp;5,
the rights of the holder of the shares of Series Q Preferred Stock being converted shall cease, and such holders shall be deemed to be holders of the shares of Common Stock issued or issuable upon such conversion. The Company understands that a
delay in the delivery of Common Stock upon: (i)&nbsp;conversion of the Series Q Preferred Stock pursuant to this Section&nbsp;5; or (ii)&nbsp;in response to a proper request to have a restrictive legend removed under Rule 144 of the Securities Act,
could result in economic loss to the holder. As compensation to the holder for such loss, the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">12 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2"><B></B>Company agrees to pay (as liquidated damages and not as a penalty) to the holder for such late delivery of Common Stock upon conversion of the Series
Q Preferred Stock in the amount of $100 per Business Day after the third Business Day after a request for conversion, or a legend removal, has been made for each $10,000 of Series Q Preferred Stock and accrued dividends being converted, or the
corresponding Common Stock, for which a legend removal has been requested, which is not timely delivered. The Company shall pay any payments incurred under this section in immediately available funds upon demand. Furthermore, in addition to any
other remedies which may be available to the holder, in the event that the Company fails for any reason to effect timely delivery of shares of Common Stock in connection with a conversion pursuant to Section&nbsp;5A, the holder will be entitled to
revoke all or part of the relevant notice of conversion by delivery of a notice to such effect to the Company whereupon the Company and the holder shall each be restored to their respective positions immediately prior to the delivery of such notice,
except that the liquidated damages described above shall be payable through the date notice of revocation is given to the Company<B>. </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">5D. <U>Fractional Shares; Dividends; Partial Conversion</U>. No fractional shares shall be issued as a result of any conversion hereunder, and any holder entitled to a fractional share of Common Stock upon the date of such conversion shall
be entitled, upon surrender to the Company of the certificates presented for conversion, to receive a cash payment in an amount equal to the product obtained by multiplying the fractional interest by the Market Price of a share of Common Stock. In
addition to any other rights available to the holder, if the Company fails to make timely delivery in accordance with the provisions of Section&nbsp;5C above, to a holder of a certificate or certificates representing the shares of Common Stock into
which such holder&#146;s shares of Series Q Preferred Stock have been converted, and if within seven Business Days thereafter such holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such holder of the Common Stock which the holder anticipated receiving upon such conversion (a &#147;Buy-In&#148;), then the Company shall pay in cash to the holder (in addition to any remedies available to or elected by the holder) within
five Business Days after written notice from the holder, the amount by which (i)&nbsp;the holder&#146;s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (ii)&nbsp;the aggregate Stated
Value of the shares of Series Q Preferred Stock for which such conversion was not timely honored, together with interest thereon at a rate of 15 percent per annum, accruing until such amount and any accrued interest thereon is paid in full (which
amount shall be paid as liquidated damages and not as a penalty). For example, if the holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of $10,000 of Stated
Value of Series Q Preferred Stock, the Company shall be required to pay the holder $1,000, plus interest. The holder shall provide the Company written notice indicating the amounts payable to the holder in respect of the Buy-In. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E. <U>Adjustment of Conversion Price</U>. If the Company shall issue or sell, or is, in accordance with subsections 5E(1) through 5E(8) below, deemed to
have issued or sold, any Additional Shares of Common Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the time of such issue or sale, then and in each such
case (a &#147;Trigger Issuance&#148;) the then-existing Conversion Price shall be reduced, as of the close of business on the effective date of the Trigger Issuance, to a price determined as follows: </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">13 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="21%" BORDER="0" ALIGN="center">

<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="75%"></TD>
<TD></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Adjusted&nbsp;Conversion&nbsp;Price&nbsp;=</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">(A&nbsp;x&nbsp;B)&nbsp;+&nbsp;D</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A + C</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">where </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;A&#148; equals the number of shares of Common Stock outstanding, including Additional Shares of Common Stock deemed to be issued
hereunder, immediately preceding such Trigger Issuance; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;B&#148; equals the Conversion Price in effect immediately
preceding such Trigger Issuance; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;C&#148; equals the number of Additional Shares of Common Stock issued or deemed
issued hereunder as a result of the Trigger Issuance; and </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">&#147;D&#148; equals the aggregate consideration, if any,
received or deemed to be received by the Company upon such Trigger Issuance; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><U>provided</U>, <U>however</U>, that in no event shall the
Conversion Price after giving effect to such Trigger Issuance be greater than the Conversion Price in effect prior to such Trigger Issuance. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">For purposes of this subsection 5E, &#147;Additional Shares of Common Stock&#148; shall mean all shares of Common Stock issued by the Company or deemed to be issued pursuant to this subsection 5E, other than Excluded Stock. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">For purposes of this subsection 5E, the following Sections 5E(1) to 5E(8) shall also be applicable: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(1) <U>Issuance of Rights or Options</U>. In case at any time the Company shall in any manner grant (directly and not by assumption in a merger or
otherwise) any warrants or other rights to subscribe for or to purchase, or any options for the purchase of, Common Stock or any stock or security convertible into or exchangeable for Common Stock (such warrants, rights or options being called
&#147;Options&#148; and such convertible or exchangeable stock or securities being called &#147;Convertible Securities&#148;) whether or not such Options or the right to convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable upon the exercise of such Options or upon the conversion or exchange of such Convertible Securities (determined by dividing: (i)&nbsp;the sum (which sum shall constitute the
applicable consideration) of (x)&nbsp;the total amount, if any, received or receivable by the Company as consideration for the granting of such Options, plus (y)&nbsp;the aggregate amount of additional consideration payable to the Company upon the
exercise of all such Options, plus (z), in the case of such Options which relate to Convertible Securities, the aggregate amount of additional consideration, if any, payable upon the issue or sale of such Convertible Securities and upon the
conversion or exchange thereof, by (ii)&nbsp;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) shall be less than the Conversion Price in effect immediately prior to the time of the granting of such Options, then the total number of shares of Common Stock issuable upon the exercise of such Options or upon </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">14 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">conversion or exchange of the total amount of such Convertible Securities issuable upon the exercise of such Options shall be deemed to have been issued for
such price per share as of the date of granting of such Options or the issuance of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting the Conversion Price. Except as otherwise provided in
subsection 5E(3) no adjustment of the Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible Securities upon exercise of such Options or upon the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(2) <U>Issuance of Convertible Securities</U>. In case the Company shall in any manner issue (directly
and not by assumption in a merger or otherwise) or sell any Convertible Securities, whether or not the rights to exchange or convert any such Convertible Securities are immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange (determined by dividing: (i)&nbsp;the sum (which sum shall constitute the applicable consideration) of (x)&nbsp;the total amount received or receivable by the Company as consideration for the issue or sale
of such Convertible Securities, plus (y)&nbsp;the aggregate amount of additional consideration, if any, payable to the Company upon the conversion or exchange thereof, by (ii)&nbsp;the total number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall be less than the Conversion Price in effect immediately prior to the time of such issue or sale, then the total maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have been issued for such price per share as of the date of the issue or sale of such Convertible Securities and thereafter shall be deemed to be outstanding for purposes of adjusting
the Conversion Price, provided that: (a)&nbsp;except as otherwise provided in subsection 5E(3), no adjustment of the Conversion Price shall be made upon the actual issuance of such Common Stock upon conversion or exchange of such Convertible
Securities; and (b)&nbsp;no further adjustment of the Conversion Price shall be made by reason of the issue or sale of Convertible Securities upon exercise of any Options to purchase any such Convertible Securities for which adjustments of the
Conversion Price have been made pursuant to the other provisions of subsection 5E. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(3) <U>Change in Option Price or Conversion Rate</U>.
If: (i)&nbsp;the purchase price provided for in any Right or Option referred to in subsection 5E(l) hereof; (ii)&nbsp;the additional consideration, if any, payable upon the conversion or exchange of any Convertible Securities referred to in
subsections 5E(l) or 5E(2); (iii)&nbsp;or the rate at which Convertible Securities referred to in subsections 5E(l) or 5E(2) are convertible into Common Stock shall change at any time (each, a &#147;Readjustment Event&#148;) (including, but not
limited to, changes under or by reason of provisions designed to protect against dilution), the Conversion Price in effect at the time of such event shall forthwith be readjusted to the Conversion Price which would have been in effect had such
Readjustment Event occurred at the time the Options or Convertible Securities still outstanding were initially granted, issued or sold. Upon the termination of any Option for which any adjustment was made pursuant to this subsection 5(E) or any
right to convert Convertible Securities for which any adjustment was made pursuant to this subsection 5(E) (including without limitation upon the redemption or purchase for consideration of such Convertible Securities by the Company), and after five
calendar days notice to the holder, the Conversion Price then in effect hereunder shall forthwith be changed to the Conversion Price which would have been in effect at the time of such termination had such Option or Convertible Securities, to the
extent outstanding immediately prior to such termination, never been issued. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">15 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(4) <U>Stock Dividends</U> In case the Company shall declare a dividend or make any other distribution
upon any stock of the Company payable in Common Stock, Options or Convertible Securities, then any Common Stock, Options or Convertible Securities, as the case may be, issuable in payment of such dividend or distribution shall be deemed to have been
issued or sold without consideration and the Conversion Price then in effect shall be adjusted accordingly. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(5) <U>Subdivision or
Combination of Stock.</U> In case the Company shall at any time subdivide 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.
In case the Company at any time shall combine its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(6) <U>Consideration for Stock</U>. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for cash, the
consideration received therefor shall be deemed to be the net amount received by the Company therefor, after deduction therefrom of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection
therewith. In case any shares of Common Stock, Options or Convertible Securities shall be issued or sold for a consideration other than cash, the amount of the consideration other than cash received by the Company shall be deemed to be the fair
value of such consideration as determined in good faith by the Board of Directors of the Company, after deduction of any expenses incurred or any underwriting commissions or concessions paid or allowed by the Company in connection therewith. In case
any Options shall be issued in connection with the issue and sale of other securities of the Company, together comprising one integral transaction in which no specific consideration is allocated to such Options by the parties thereto, such Options
shall be deemed to have been issued for such consideration as determined in good faith by the Board of Directors of the Company. If Common Stock, Options or Convertible Securities shall be issued or sold by the Company and, in connection therewith,
other Options or Convertible Securities (the &#147;Additional Rights&#148;) are issued, then the consideration received or deemed to be received by the Company shall be reduced by the fair market value of the Additional Rights (as determined using
the Black-Scholes option pricing model or another method mutually agreed to by the Company and the holder). The Board of Directors of the Company shall respond promptly, in writing, to any inquiry by the holder as to the fair market value of the
Additional Rights. In the event that the Board of Directors of the Company and the holder are unable to agree upon the fair market value of the Additional Rights, the Company and the holder shall jointly select an appraiser who is experienced in
such matters. The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne by the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">5E(7) <U>Record Date</U>. In case the Company shall take a record of the holders of its Common Stock for the purpose of entitling them (i)&nbsp;to receive a dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (ii)&nbsp;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 the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may be. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">16 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5E(8) <U>Treasury Shares</U>. 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 Company or any of its wholly-owned Subsidiaries, and the disposition of any such shares (other than the cancellation or retirement thereof) shall be considered an issue or sale of Common
Stock for the purpose of this Section&nbsp;5E. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5F. <U>Reorganization or Reclassification; Consolidation or Merger</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) If the Company shall, at any time or from time to time while the Series Q Preferred Stock is outstanding, issue by reorganization or by
reclassification of its outstanding shares of Common Stock any shares of its Capital Stock (including any reclassification in connection with a consolidation or merger in which the Company is the continuing corporation), then the Conversion Price in
effect immediately prior to the date upon which such change shall become effective shall be adjusted by the Company so that the holder thereafter converting its shares of Series Q Preferred Stock shall be entitled to receive the number of shares of
Common Stock or other Capital Stock which the such holder would have received if the shares of Series Q Preferred Stock had been converted immediately prior to such event. Such adjustments shall be made successively whenever any event listed above
shall occur. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) If any capital reorganization or reclassification of the Capital Stock of the Company shall be effected in such a way
(including, without limitation, by way of consolidation or merger) that holders of Common Stock but not holders of Series Q Preferred Stock shall be entitled to receive stock, securities or assets with respect to or in exchange for Common Stock
then, as a condition of such reorganization or reclassification, lawful and adequate provision shall be made whereby each holder of a share or shares of Series Q Preferred Stock shall thereafter have the right to receive, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock of the Company immediately theretofore receivable upon the conversion of such share or shares of the Series Q Preferred Stock, such shares of stock, 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 such stock immediately theretofore so receivable had such reorganization or reclassification not taken
place and in any such case appropriate provision shall be made with respect to the rights and interests of such holder to the end that the provisions hereof (including without limitation provisions for adjustments of the Conversion Price) shall
thereafter be applicable, as nearly as may be, in relation to any shares of stock, securities or assets thereafter deliverable upon the exercise of such conversion rights (including an immediate adjustment, by reason of such reorganization or
reclassification, of the Conversion Price to the value for the Common Stock reflected by the terms of such reorganization or reclassification if the value so reflected is less than the Conversion Price in effect immediately prior to such
reorganization or reclassification). In the event of a merger or consolidation of the Company as a result of which a greater or lesser number of shares of Common Stock of the surviving corporation are issuable to holders of the Common Stock of the
Company outstanding immediately prior to such merger or consolidation, the Conversion Price in effect immediately prior to such merger or consolidation shall be adjusted in the same manner as though there were a subdivision or combination of the
outstanding shares of Common Stock of the Company. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">17 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5G. <U>Distributions</U>. In case the Company shall fix a payment date for the making of a distribution
to all holders of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation or any distribution made in connection with a sale of the Company&#146;s assets) of
evidences of indebtedness or assets (other than cash dividends or cash distributions payable out of consolidated earnings or earned surplus), or subscription rights or warrants, the Conversion Price to be in effect after such payment date shall be
determined by multiplying the Conversion Price in effect immediately prior to such payment date by a fraction, the numerator of which shall be the total number of shares of Common Stock outstanding multiplied by the Market Price (as defined below)
per share of Common Stock immediately prior to such payment date, less the fair market value (as determined by the Company&#146;s Board of Directors in good faith) of said assets or evidences of indebtedness so distributed, or of such subscription
rights or warrants, and the denominator of which shall be the total number of shares of Common Stock outstanding multiplied by such Market Price per share of Common Stock immediately prior to such payment date. &#147;Market Price&#148; as of a
particular date (the &#147;Valuation Date&#148;) shall mean the following: (a)&nbsp;if the Common Stock is then listed on a national stock exchange, the closing sale price of one share of Common Stock on such exchange on the last trading day prior
to the Valuation Date; (b)&nbsp;if the Common Stock is then quoted on The Nasdaq Stock Market (&#147;Nasdaq&#148;), the National Association of Securities Dealers, Inc. OTC Bulletin Board (the &#147;Bulletin Board&#148;) or such similar exchange or
association, the closing sale price of one share of Common Stock on Nasdaq, the Bulletin Board or such other exchange or association on the last trading day prior to the Valuation Date or, if no such closing sale price is available, the average of
the high bid and the low asked price quoted thereon over the immediately preceding three trading day period prior to the Valuation Date; or (c)&nbsp;if the Common Stock is not then listed on a national stock exchange or quoted on Nasdaq, the
Bulletin Board or such other exchange or association, the fair market value of one share of Common Stock as of the Valuation Date, shall be determined in good faith by the Board of Directors of the Company and the holders of at least a majority of
the outstanding Series Q Preferred Stock. If the Common Stock is not then listed on a national securities exchange, the Bulletin Board or such other exchange or association, the Board of Directors of the Company shall respond promptly, in writing,
to an inquiry by a holder of Series Q Preferred Stock prior to the exercise hereunder as to the fair market value of a share of Common Stock as determined by the Board of Directors of the Company. In the event that the Board of Directors of the
Company and the holders of at least a majority of the outstanding Series Q Preferred Stock are unable to agree upon the fair market value in respect of subpart (c)&nbsp;hereof, the Company and the holders of at least a majority of the outstanding
Series Q Preferred Stock shall jointly select an appraiser who is experienced in such matters. The decision of such appraiser shall be final and conclusive, and the cost of such appraiser shall be borne by the Company. Such adjustment shall be made
successively whenever such a payment date is fixed. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5H. <U>Effective Date of Adjustment</U>. An adjustment to the Conversion Price shall
become effective immediately after the payment date in the case of each dividend or distribution and immediately after the effective date of each other event which requires an adjustment. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5I. <U>Subsequent Adjustments</U>. In the event that, as a result of an adjustment made pursuant to this Section&nbsp;5, holders of Series Q Preferred
Stock shall become entitled to receive any shares of Capital Stock of the Company other than shares of Common Stock, the number of such other shares so receivable upon the conversion of the Series Q Preferred Stock shall be </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">18 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">subject thereafter to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions contained herein with
respect to the shares of Common Stock receivable upon conversion of the Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5J. <U>Notice of Adjustment</U>. Upon
any adjustment of the Conversion Price, then, and in each such case the Company shall give written notice thereof by first class mail, postage prepaid, addressed to each holder of shares of Series Q Preferred Stock at the address of such holder as
shown on the books of the Company, which notice shall state the Conversion Price resulting from such adjustment, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5K. <U>Other Notices</U>. In case at any time: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(1) the Company shall declare any dividend upon its Common Stock payable in cash or stock or make any other distribution to the holders of its Common Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">(2) the Company shall offer for subscription pro rata to the holders of its Common Stock any additional shares of such stock of any class or other rights; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(3) there shall be any capital reorganization or reclassification of the Capital Stock of the Company, or a consolidation or merger of the Company with,
or a sale of all or substantially all its assets to, another corporation; or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">then, in any one or more of such occurrences, the Company shall give, by first class mail,
postage prepaid, addressed to each holder of any shares of Series Q Preferred Stock at the address of such holder as shown on the books of the Company: (i)&nbsp;at least 15 days prior written notice of the date on which the books of the Company
shall close or a record shall be taken for such dividend, distribution or subscription rights or for determining rights to vote in respect of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding
up; and (ii)&nbsp;in the case of any such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding up, at least 15 days&#146; prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause (i)&nbsp;shall also specify, in the case of any such dividend, distribution or subscription rights, the date on which the holders of Common Stock shall be entitled thereto, and such notice in accordance with the
foregoing clause (ii)&nbsp;shall also specify the date on which the holders of Common Stock shall be entitled to exchange their Common Stock for securities or other property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up, as the case may be. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5L. <U>Stock to be Reserved</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(1) The Company will at all times reserve and keep available out of its authorized but unissued Common Stock solely for the purpose of issuance upon the
conversion of the Series Q Preferred Stock as herein provided, 150 percent of such number of shares of Common Stock as shall then be issuable upon the conversion of all outstanding shares of Series Q Preferred Stock. </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">19 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">All shares of Common Stock which shall be so issued shall be duly and validly issued and fully paid and nonassessable and free from all liens, duties and
charges arising out of or by reason of the issue thereof (including, without limitation, in respect of taxes) and, without limiting the generality of the foregoing, the Company covenants that it will from time to time take all such action as may be
required to insure that the par value per share of the Common Stock is at all times equal to or less than the effective Conversion Price. The Company will take all such action within its control as may be necessary on its part to assure that all
such shares of Common Stock may be so issued without violation of any applicable law or regulation, or of any requirements of any national securities exchange upon which the Common Stock of the Company may be listed. The Company will not take any
action which results in any adjustment of the Conversion Price if after such action the total number of shares of Common Stock issued and outstanding and thereafter issuable upon exercise of all Options and conversion of Convertible Securities,
including upon conversion of the Series Q Preferred Stock, would exceed the total number of shares of such class of Common Stock then authorized by the Company&#146;s Certificate of Incorporation, or result in a Conversion Price less than the par
value. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(2) The Company will at all times reserve and keep available out of its authorized but unissued Series Q Preferred Stock such
number of shares of Series Q Preferred Stock as is equal to the number of shares of Series Q Preferred Stock then outstanding for use as PIK Shares. All shares of Series Q Preferred Stock, which shall be so issued shall be duly and validly issued
and fully paid and nonassessable and free from all liens, duties and charges arising out of or by reason of the issue thereof (including, without limitation, in respect of taxes). </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5M. <U>Issue Tax</U>. The issuance of certificates for shares of Common Stock upon conversion of the Series Q Preferred Stock shall be made without
charge to the holders thereof for any issuance tax, stamp tax, transfer tax, duty or charge in respect thereof, provided that the Company shall not be required to pay any tax, duty or charge which may be payable in respect of any transfer involved
in the issuance and delivery of any certificate in a name other than that of the holder of the Series Q Preferred Stock which is being converted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">5N. <U>Closing of Books</U>. The Company will at no time close its transfer books against the transfer of any Series Q Preferred Stock or of any shares of Common Stock issued or issuable upon the conversion of any shares of Series Q
Preferred Stock in any manner which interferes with the timely conversion of such Series Q Preferred Stock; <U>provided</U>, <U>however</U>, that nothing herein shall be construed to prevent the Company from setting record dates for the holders of
its securities. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5O. <U>Limitation on Conversion</U>. A holder of Series Q Preferred Stock shall not have the right to convert any shares
of Series Q Preferred Stock that would result in such holder having a beneficial ownership of Common Stock which would be in excess of the sum of (i)&nbsp;the number of shares of Common Stock beneficially owned by the holder and its affiliates after
giving effect to such conversion, and (ii)&nbsp;the number of shares of Common Stock issuable upon the conversion of such holder&#146;s Series Q Preferred Stock, which would result in beneficial ownership by the holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock. For the purposes of this Section&nbsp;5O, beneficial ownership shall be determined in accordance with Section&nbsp;13(d) of the Exchange Act and Rule 13d-3 thereunder. Subject to the foregoing,
the holder shall not be limited to successive conversions which would result in the </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">20 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">aggregate issuance of more than 4.99% (the &#147;Maximum Percentage&#148;). By written notice to the Company, a holder may, from time to time, increase or
decrease the Maximum Percentage to any other percentage not in excess of 9.99% specified in such notice; provided that (i)&nbsp;any such increase will not be effective until the sixty-first (61st)&nbsp;day after such notice is delivered to the
Company, and (ii)&nbsp;any such increase or decrease will apply only to the holder providing such written notice and not to any other holder of Series Q Preferred Stock. Notwithstanding the foregoing, any holder may revoke the application of the
conversion limitation described in this Section&nbsp;5O to such holder, in whole or in part, upon 61 days prior notice to the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">6. <U>Offering
Restrictions</U>. For so long as any shares of Series Q Preferred Stock remain outstanding, the Company will not enter into any Equity Line of Credit (as defined below) or similar agreement, nor issue nor agree to issue any floating or Variable
Priced Equity Linked Instruments nor any of the foregoing or equity with Price Reset Rights. For purposes of such restriction: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) the term
&#147;Equity Line of Credit&#148; means a financing structure that would allow the Company to &#147;draw down&#148; against a pre-determined amount of capital committed to by a purchaser during a specified period of time (the Company &#147;draws
down&#148; the Equity Line of Credit by making periodic sales of its securities to the purchaser); and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) &#147;Variable Priced Equity
Linked Instruments&#148; is a transaction involving the purchase of common stock or the conversion price of a convertible security which fluctuates in relation to the market price of the stock of a corporate issuer, and in which the effective price
will ultimately depend upon the direction of the market price of an issuer&#146;s stock; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) &#147;Price Reset&#148; means where the
price of common stock or the conversion price of a convertible security is set after a closing date and subject to adjustment (downward or upward) based on various criteria that can include fundamental performance, a specified event, or the stock
price of a corporate issuer at a given point in time after closing. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">7. <U>Rights of First Refusal</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Sale Notice</U>. If at any time during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, the
Company proposes to issue and sell Capital Stock (a &#147;Equity Offering&#148;) to one or more third parties in a transaction, the primary purpose of which is a financing (an &#147;Equity Financing&#148;), then the Company shall give written notice
(the &#147;Sale Notice&#148;) to the holders of shares of Series Q Preferred Stock of the Company&#146;s intention to consummate such Equity Financing. The Sale Notice shall state (i)&nbsp;a description of the Capital Stock to be sold (&#147;Offered
Shares&#148;), (ii)&nbsp;the identity of the prospective purchaser(s) and (iii)&nbsp;the consideration and the material terms and conditions upon which the proposed Equity Financing is to be made. The Sale Notice shall certify that the Company has
received a firm offer from the prospective purchaser(s) and in good faith believes a binding agreement for the Equity Financing is obtainable on the terms set forth in the Sale Notice. The Sale Notice shall also include a copy of any written
proposal, term sheet or letter of intent or other agreement relating to the proposed Equity Financing. An Equity Financing shall not include any issuance of Excluded Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">21 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Purchase Option</U>. Each holder of Series Q Preferred Stock shall have the option for a period of
twenty (20)&nbsp;days from such holder&#146;s receipt of the Sale Notice from the Company set forth in Section&nbsp;7(a) to elect to purchase such holder&#146;s pro rata share of the Offered Shares at the same price and subject to the same material
terms and conditions as described in the Sale Notice. Each holder may exercise such purchase option and, thereby, purchase all or any portion of his, her or its pro rata share (with any reallotments as provided below) of the Offered Shares, by
notifying the Company in writing, before expiration of the twenty (20)&nbsp;day period as to the number of such shares which he, she or it wishes to purchase (including any reallotment). Each holder&#146;s pro rata share of the Offered Shares shall
be a fraction of the Offered Shares, of which the number of shares of Common Stock issuable upon conversion of the Series Q Preferred Stock owned by such holder on the date of the Sale Notice shall be the numerator and the total number of shares of
Common Stock issuable upon conversion of the Series Q Preferred Stock held by all holders of Series Q Preferred Stock on the date of the Sale Notice shall be the denominator. Each holder shall have a right of reallotment such that, if any other
holder fails to exercise the right to purchase its full pro rata share of the Offered Shares, the other participating holders may exercise an additional right to purchase, on a pro rata basis, the Offered Shares not previously purchased. Each holder
shall be entitled to apportion Offered Shares to be purchased among its partners and affiliates, provided that such holder notifies the Company of such allocation. If a holder gives the Company notice that it desires to purchase its pro rata share
of the Offered Shares and, if applicable, its reallotment, then payment for the Offered Shares shall be by check or wire transfer, against delivery of the Offered Shares to be purchased at a place agreed upon between the parties and at the time of
the scheduled closing therefor, which shall be no later than forty-five (45)&nbsp;days after the holder&#146;s receipt of the Sale Notice, unless the Sale Notice contemplated a later closing with the prospective third party purchaser(s). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">8. <U>No Waiver</U>. Except as otherwise modified or provided for herein, the holders of Series Q Preferred Stock shall also be entitled to, and shall not be deemed
to have waived, any other applicable rights granted to such holders under the Delaware General Corporation Law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">9. <U>No Impairment</U>. The Company will
not, through any reorganization, transfer of assets, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by
the Company but will at all times in good faith assist in the carrying out of all the provisions hereunder and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights and liquidation preferences
granted hereunder of the holders of the Series Q Preferred Stock against impairment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">10. <U>Amendment; Waiver</U>. Except as expressly provided for
otherwise herein, any term of the Series Q Preferred Stock may be amended or waived (including the adjustment provisions included in Section&nbsp;5E hereof) upon the vote or written consent of the Company and the holders of at least 70% of the
Series Q Preferred Stock then outstanding; <U>provided</U>, <U>however</U> that an amendment or waiver relating to the right to convert the Series Q Preferred Stock or the Conversion Price thereof shall only be binding upon a holder who has given a
vote or written consent in favor thereof. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">22 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">11. <U>Action By holders</U>. Any action or consent to be taken or given by the holders of the Series Q Preferred Stock
may be given either at a meeting of the holders of the Series Q Preferred Stock called and held for such purpose or by written consent. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">12. <U>Notice of
Stockholder Approval</U>. Within two (2)&nbsp;Business Days after stockholder approval of the issuance of the Common Stock upon conversion of the Series Q Preferred Stock is effective in compliance with Nasdaq Marketplace Rule 4350(i)(1) and
Regulation 14C under the Exchange Act, the Company will (i)&nbsp;send written notification to each holder of Series Q Preferred Stock that such holder may exercise its conversion rights in accordance with the terms of the Series Q Preferred Stock
and (ii)&nbsp;amend the Certificate of Designations, Rights and Preferences for the Series Q Preferred Stock to reflect such stockholder approval. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">13.
<U>Registration Rights Agreement</U>. Holders of the Series Q Preferred Stock shall be entitled to the benefits of the Registration Rights Agreement (subject to the terms and conditions set forth therein). The Company shall provide to each holder of
Series Q Preferred Stock, upon request, and without charge, a copy of the Registration Rights Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">[Execution Page Follows]
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">23 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF</B>, the undersigned has executed this Certificate of Designations, Preferences and
Rights this 30th day of June, 2006. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>VELOCITY EXPRESS CORPORATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Edward W. Stone</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Edward W. Stone</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">24 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.2
<SEQUENCE>3
<FILENAME>dex32.htm
<DESCRIPTION>AMENDED CERTIFICATE OF DESIGNATION
<TEXT>
<HTML><HEAD>
<TITLE>Amended Certificate of Designation</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 3.2 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">AMENDED CERTIFICATE OF DESIGNATION </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">OF </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"
ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">VELOCITY EXPRESS CORPORATION </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Velocity Express Corporation, a corporation organized
and existing under the laws of the state of Delaware (the &#147;Company&#148;), hereby certifies that no shares of the Company&#146;s Series Q Convertible Preferred Stock have been issued and that the following resolution was adopted by the Board of
Directors of the Company pursuant to Section 151 of the Delaware General Corporation Law: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">RESOLVED, that Section 1 of the Certificate of Designations,
Rights and Preferences of Series Q Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by amending the following definitions (<I><U>changes from the current Certificate are marked</U></I>):
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Notes</U>&#148; shall mean the Company&#146;s 12% Senior Secured Notes due 2010 issued pursuant to the Indenture dated <B><U>July
3</U></B>, 2006 by and between the Company and Wells Fargo, N.A., as Trustee (the &#147;Indenture&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Registration Rights
Agreement</U>&#148; means the Registration Rights Agreement dated as of <B><U>July 3</U></B>, 2006 by and among the Company, the purchasers of Series Q Preferred Stock, the purchasers of the Company&#146;s 12% Senior Secured Notes and Warrants and
the other parties named therein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">&#147;<U>Series Q Preferred Stock Purchase Agreement</U>&#148; means that certain Stock Purchase
Agreement dated <B><U>July 3</U></B>, 2006 by and among the Company and the investors named therein for the purchase and sale of Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">&#147;<U>Target Acquisition</U>&#148; means the merger of Cobra Acquisition Corp., a newly-formed wholly-owned Subsidiary of the Company (&#147;Merger Sub&#148;), and Target, pursuant to the terms of an Agreement and
Plan of Merger dated <B><U>July 3</U></B>, 2006 (&#147;Merger Agreement&#148;), by and among the Company, Merger Sub and Target. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">&#147;<U>Warrants</U>&#148; shall mean stock purchase warrants of the Company issued pursuant to that certain Note and Warrant Purchase Agreement dated <B><U>July 3</U></B>, 2006 by and among the Company and the investors named therein.
</FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">[Execution Page Follows] </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF</B>, the undersigned has executed this Certificate of Amendment at 8:00 a.m. EDT
this 3rd day of July, 2006. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>VELOCITY EXPRESS CORPORATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-bottom:1px;border-bottom:1px solid #000000"><FONT FACE="Times New Roman" SIZE="2">/s/ Edward W. Stone</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Edward W. Stone</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>dex101.htm
<DESCRIPTION>REIMBURSEMENT AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Reimbursement Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.1 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>REIMBURSEMENT AGREEMENT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This Reimbursement Agreement (this &#147;<B><I>Agreement</I></B>&#148;) is
entered into as of the 29th day of June, 2006 (the &#147;<B><I>Effective Date</I></B>&#148;), by and between Velocity Express Corporation, a Delaware corporation (the &#147;<B><I>Company</I></B>&#148;), and TH Lee Putnam Ventures, a Delaware
partnership (the &#147;<B><I>Sponsor</I></B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS</B>, certain affiliates of the Sponsor have provided equity financing to
the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>WHEREAS</B>, Sponsor and its affiliates have incurred costs and expenses in connection with providing such services to the
Company and expect to incur future costs and expenses on the Company&#146;s behalf. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>NOW, THEREFORE</B>, in consideration of the
premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">1. <U>Prior Costs and Expenses</U>. The Company and Sponsor agree that the Company is indebted to Sponsor as of the Effective Date for: </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) for costs and expenses incurred on behalf of the Company in the amount of $89,551.47; </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Sponsor&#146;s overfunding of a credit facility provided by Sponsor for the benefit of the Company in the amount of $130,000;
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) merger and acquisition services provided by Sponsor to the Company in connection with the pending CD&amp;L merger; and
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d) credit enhancements provided to the Company in the form of loan guarantees. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">The Company shall reimburse Sponsor in cash for the amount set forth in (a)&nbsp;above promptly upon demand made by Sponsor. The Company&#146;s obligation to Sponsor
with respect to (b)&nbsp;above shall be paid by the Company&#146;s issuance to Sponsor of approximately 118,181 shares of the Company&#146;s Series Q Convertible Preferred Stock. The Company shall compensate Sponsor for the services described in
(c)&nbsp;and (d)&nbsp;above by issuing to Sponsor four-year warrants to purchase 250,000 and 547,500 shares, respectively, of the Company&#146;s common stock, $.004 par value per share, at a price of $.01 per share. Such warrants will be
substantially similar to the warrant instruments issuable to purchasers of the Company&#146;s 12 percent senior secured notes. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <U>Legal Fees and Expenses</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) Sponsor and the Company acknowledge and agree that the Company is obligated to pay to Kirkland&nbsp;&amp; Ellis LLP fees and expenses
in the amount of $149,489.86 for legal work related to strategic planning and corporate finance arranged by Sponsor for the exclusive benefit of the Company. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Sponsor and the Company acknowledge and agree that the Company is to pay all reasonable legal fees and expenses incurred by Sponsor
with respect to its investment in the Company&#146;s Series Q Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Reimbursement of Future Costs and Expenses</U>.
Subject to the terms and conditions set forth herein, the Company shall pay on demand and in cash all out of pocket and other third-party costs and expenses incurred by Sponsor on behalf of the Company. Prior to incurring any costs or expenses
reimbursable by the Company, Sponsor shall obtain the written consent of the Company&#146;s Chief Executive Officer or Chief Financial Officer, who shall take such actions necessary to ensure that such consent is not provided unless and until:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) all conditions for approval of transactions with affiliates and stockholders contained in the Certificates of
Designation of Preferences and Rights for the Company&#146;s Series M and Series N Convertible Preferred Stock have been satisfied; </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(b) the Company has complied with the terms and conditions of the Company&#146;s Senior Secured Note Indenture, including without limitation Section&nbsp;4.14 thereof; and </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) the Company has satisfied any and all contractual and other restrictions imposed on such transactions by documents and instruments
governing the Company&#146;s debt and equity financing arrangements. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Sponsor shall provide to the Company copies of all invoices and other documentation
substantiating the nature and amount of all costs and expenses for which reimbursement is requested pursuant to this Agreement. The Company shall effect such reimbursements via wire transfer of immediately available funds to an account(s) specified
in writing by the Sponsor for such purpose. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">4. <U>Registration Rights</U>. The Company shall register the Common Stock underlying the
Company&#146;s Series Q Convertible Preferred Stock and the four-year warrants referred to in Section&nbsp;1 of this agreement at the same time as it registers the securities of other purchasers of Series Q Convertible Preferred Stock and warrants,
pursuant to the terms of a registration rights agreement between the Company and such purchasers. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">5. <U>Term</U>. The term of this
Agreement commence on the Effective Date and continue in full force and effect until terminated: (a)&nbsp;by Sponsor on at least 30 days prior written notice to the Company, or (b)&nbsp;automatically on the date which Sponsor no longer beneficially
owns equity securities of the Company. Upon any termination of this Agreement, any and all owed and unpaid obligations of the Company under Sections 1, 2 and 3 above survive. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">6. <U>Indemnification</U>. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) The Company will indemnify and hold harmless Sponsor, its affiliates and their respective partners (both general and limited), members
(both managing and otherwise), officers, directors, employees, agents and representatives (each such entities and persons being an &#147;Indemnified Party&#148;) from and against any and all losses, claims, damages and liabilities, expenses of any
nature (including reasonable attorneys&#146; fees and disbursements), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings (the &#147;Liabilities&#148;), related to, arising out of
or in connection with: (i)&nbsp;any action taken within the scope of this Agreement in good faith by an Indemnified Party on behalf of the Company and (ii)&nbsp;any breach by the Company of any of the terms of this Agreement, except, in each case,
if a court, in a final judgment from which no further appeal may be taken, determines that the Liability resulted primarily from the gross negligence or willful misconduct by an Indemnified Party (an &#147;Indemnified Party Fault&#148;). </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) The Company will reimburse any Indemnified Party for all costs and expenses (including reasonable attorneys&#146; fees and
expenses) as they are incurred in connection with investigating, preparing, pursuing, defending or assisting in the defense of any action, claim, suit, investigation or proceeding for which the Indemnified Party would be entitled to indemnification
hereunder, subject to repayment by the Indemnified Party in the case of an Indemnified Party Fault. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">7. <U>Assignment.</U> Neither the
Company nor Sponsor shall have the right to assign this Agreement without the written consent of the other party, which consent may be withheld for any reason. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">8. <U>Amendments and Waivers</U>. No amendment or waiver of any term, provision or condition of this Agreement shall be effective, unless in writing and executed by Sponsor and the Company. No course of dealing of any
party nor any delay or omission in exercising any right or remedy shall constitute an amendment of this Agreement or a waiver of any right or remedy of any party hereto. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">9. <U>Miscellaneous</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(a) Choice of Law. This Agreement shall be governed by and
construed in accordance with the substantive laws of the state of New York without giving effect to any choice or conflict of law provision or rule contained therein. </FONT></P> <P
STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(b) Consent to Jurisdiction. Each of the parties agrees that all actions, suits or proceedings arising out of or based upon this Agreement
or the subject matter hereof shall be brought and maintained exclusively in the federal and state courts of the State of New York. Each of the parties hereto by execution hereof: (i)&nbsp;hereby irrevocably submits to the jurisdiction of the federal
and state courts in the State of New York for the purpose of any action, suit or proceeding arising out of or based upon this Agreement or the subject matter hereof; and (ii)&nbsp;hereby waives to the extent not prohibited by applicable law, and
agrees not to assert, by way of motion, any defense to such jurisdiction. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(c) Entire Agreement. This Agreement contains the entire understanding of the parties
with respect to the subject matter hereof and supersedes any prior communication or agreement with respect thereto. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(d)
Severability. If in any judicial or arbitral proceedings a court or arbitrator shall refuse to enforce any provision of this Agreement, then such unenforceable provision shall be deemed eliminated from this Agreement for the purpose of such
proceedings to the extent necessary to permit the remaining provisions to be enforced to the maximum extent permitted by law. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(e) Counterparts. This Agreement may be executed in any number of counterparts and by each of the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which together shall
constitute one and the same agreement. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(f) Prevailing Party. If any legal action or other proceedings is brought for a
breach of this Agreement or any of the warranties herein, the prevailing party shall be entitled to recover its reasonable attorneys&#146; fees and other costs incurred in bringing such action or proceeding, in addition to any other relief to which
such party may be entitled. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(g) Waiver of Jury Trial. Each of the parties hereto hereby waives any right to train by jury
in any action, matter, or proceeding regarding this Agreement or any provision hereof. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">10. <U>Notice</U>. All notices, demands, and
communications of any kind which any party may require or desire to serve upon any other party under this Agreement shall be in writing and shall be served upon such other party and such other party&#146;s copied persons as specified below by
personal delivery to the address set forth for it below or to such other address as such party shall have specified by notice to each other party or by mailing a copy thereof by certified or registered mail, or by Federal Express or any other
reputable overnight courier service, postage prepaid, with return receipt requested, addressed to such party and copied persons at such addresses. In the case of service by personal delivery, it shall be deemed complete on the first business day
after the date of actual delivery to such address. In case of service by mail or by overnight courier, it shall be deemed complete, whether or not received, on the third day after the date of mailing as shown by the registered or certified mail
receipt or courier service receipt. Notwithstanding the foregoing, notice to any party or copied Person of change of address shall be deemed complete only upon actual receipt by an officer or agent of such party or copied person. </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">If to the Company, to it at:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">One Morningside Drive North,</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Building B, Suite 200</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Westport, CT 06880</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attention: Edward W. Stone</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telecopier: (203)&nbsp;349-4160</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">


<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">with a copy (which shall not constitute notice) to:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Briggs and Morgan, P.A.</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">2200 IDS Center</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">80 South Eighth Street</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Minneapolis, MN 55402</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attention: Avron L. Gordon or Brett D. Anderson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telephone: (612)&nbsp;977-8400</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telecopy: (612)&nbsp;977-8650</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">If to the Sponsor:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">TH Lee Putnam Fund Ventures</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">200 Madison Avenue</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">New York, New York 10016</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attention: Jim Brown / Fred Coulson</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">fred.coulson@thlpv.com</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telecopier: (212)&nbsp;951-8655</FONT></TD></TR>
<TR>
<TD HEIGHT="24"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">with a copy (which shall not constitute notice) to:</FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Golenbock Eiseman Assor Bell&nbsp;&amp; Peskoe LLP</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">437 Madison Avenue</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">New York, NY 10022</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attention: Andrew C. Peskoe, Esq.</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">apeskoe@golenbock.com</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telecopier: (212)&nbsp;754-0330</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">* * * * * </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">[SIGNATURE PAGE FOLLOWS] </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF</B>, each of the parties has caused this Agreement to be executed on its behalf as
an instrument under seal as of the Effective Date by its officer or representative thereunto duly authorized. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="16%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="83%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">VELOCITY EXPRESS CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">/s/ Edward W. Stone</FONT></P> <P STYLE="font-size:1px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Edward W. Stone</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Chief Financial Officer</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Sponsor:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="10%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="89%"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">TH LEE PUTNAM VENTURES</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">TH Lee Putnam Fund Advisors, L.P.,</FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px"><FONT FACE="Times New Roman" SIZE="2">its general
partner</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">/s/ Fred Coulson</FONT></P> <P STYLE="font-size:1px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT FACE="Times New Roman" SIZE="2">Vice President</FONT></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>5
<FILENAME>dex102.htm
<DESCRIPTION>FORM OF VOTING, CONSENT, AMENDMENT AND WAIVER AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Form of Voting, Consent, Amendment and Waiver Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.2 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><U>VOTING, CONSENT, AMENDMENT AND WAIVER AGREEMENT </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This VOTING, CONSENT, AMENDMENT AND WAIVER
AGREEMENT (this &#147;<U>Agreement</U>&#148;) is dated effective June 29, 2006, and entered into by and among Velocity Express Corporation, a Delaware corporation (the &#147;<U>Company</U>&#148;) and each of the stockholder signatories hereto
constituting the holders (collectively, the &#147;<U>Holders</U>&#148;) of at least: (i)&nbsp;62.5 percent of the issued and outstanding Series M Convertible Preferred Stock, par value $.004 per share (the &#147;<U>Series M Holders</U>&#148;),
(ii)&nbsp;62.5 percent of the issued and outstanding Series N Convertible Preferred Stock, par value $.004 per share (the &#147;<U>Series N Holders</U>&#148;), and (iii)&nbsp;62.5 percent of the issued and outstanding Series O Convertible Preferred
Stock, par value $.004 per share (the &#147;<U>Series O Holders</U>&#148;) (such series of preferred stock are referred to collectively herein as the &#147;<U>Existing Preferred</U>&#148;), together with the Holders of at least 50.1 percent of the
Company&#146;s issued and outstanding common stock (&#147;<U>Common Stock</U>&#148;), par value $.004 per share (including outstanding shares of other classes or series of the Company&#146;s capital stock entitled to vote on any matter on which the
holders of Common Stock are entitled to vote (collectively, the &#147;<U>Common Stock Holders</U>&#148;)). </FONT></P> <P STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">W I T N E S S E T H: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company and certain new investors (the &#147;<U>Series Q Purchasers</U>&#148;) intend to enter into a stock purchase agreement (the
&#147;<U>Stock Purchase Agreement</U>&#148;) pursuant to which the Company will issue to the Series Q Purchasers up to 45,000,000 shares of the Company&#146;s Series Q Convertible Preferred Stock, par value $.004 per share, (&#147;<U>Series Q
Preferred Stock</U>&#148;) convertible into an equal number of shares of Common Stock, subject to adjustment, on the terms and conditions set forth in the Stock Purchase Agreement; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the proposed Certificate of Designations, Preferences and Rights of the Series Q Preferred Stock provides for the payment of dividends thereon,
at the option of the Company, in the form of shares of Series Q Preferred Stock (&#147;<U>PIK Shares</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, certain rights
and preferences set forth in the proposed Series Q Preferred Stock Certificate of Designations, Preferences and Rights are inconsistent with the rights and preferences of each series of the Existing Preferred, necessitating amendments to the
Certificates of Designations, Preferences and Rights of each of the Existing Preferred; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Certificates of Designations,
Preferences and Rights of the Existing Preferred preclude the designation of the preferences and rights of the Series Q Preferred Stock and the issuance of the Series Q Preferred Stock in the absence of prior written consent from the holders of not
less than 62.5 percent of the outstanding shares of each series of the Existing Preferred; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the purchase agreements governing the
Company&#146;s sale of the Existing Preferred to the Holders provide for rights of participation applicable to the Company&#146;s proposed issuance and sale of the Series Q Preferred Stock; </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company intends to enter into purchase agreements (the &#147;<U>Note and Warrant Purchase
Agreements</U>&#148;) with certain investors (the &#147;<U>Senior Note Investors</U>&#148;), pursuant to which the Company will issue Senior Secured Notes (the &#147;<U>Notes</U>&#148;) and four-year warrants (each a &#147;<U>Note Warrant</U>&#148;)
to purchase an aggregate of approximately 26,000,000 shares of Common Stock, subject to adjustment, at an exercise price of $1.45 per share, subject to adjustment; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition precedent to the Company entering into the Stock Purchase Agreement and the Note and Warrant Purchase Agreements; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, proceeds from the issuance and sale of the Series Q Preferred, the Notes and the Warrants, together with the issuance of shares of Common
Stock, or securities convertible into or exercisable for Common Stock or a combination thereof with an aggregate fair value of approximately $3,200,000 (&#147;<U>Exeter Securities</U>&#148;), will be used to effect the purchase of a portion of the
issued and outstanding capital stock, and securities convertible into shares of the capital stock, of another company (the &#147;<U>Proposed Acquisition</U>&#148;); </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">WHEREAS, in connection with the transactions contemplated by the Stock Purchase Agreement and the Note and Warrant Purchase Agreements, the Company proposes to issue to Jefferies and Company, Broadband Capital,
Meritage Funds and Terra Nova Trading, LLC, in payment of placement agent and finders fees, an aggregate of approximately 2,550,000 shares of Series Q Preferred Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">WHEREAS, the Company proposes to issue to TH Lee Putnam Ventures, a stockholder of the Company, warrants (&#147;<U>THLPV Warrants</U>&#148;) to purchase up to 250,000 and 547,500 shares, respectively, of Common Stock
at a price of $.01 per share, in consideration for merger and acquisition services and credit enhancements in the form of loan guarantees provided to the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">WHEREAS, in connection with the Proposed Acquisition, the Company intends to issue: (i)&nbsp;warrants to purchase up to 400,000 shares of Common Stock at a price of $1.50 per share (the &#147;<U>Scura Rise
Warrants</U>&#148;) to Scura Rise&nbsp;&amp; Partners, LLC in satisfaction of investment banking fees; and (ii)&nbsp;up to approximately 500,000 shares of Common Stock to certain individuals in payment for consulting services; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company proposes to issue 375,000 shares of Series Q Preferred Stock to Pequot Capital Management, a stockholder of the Company, in
consideration for credit enhancements in the form of loan guarantees provided for the benefit of the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the shares of
Common Stock issuable: (a)&nbsp;upon conversion of the Series Q Preferred Stock, (b)&nbsp;upon conversion of PIK Shares issuable as dividends on the Series Q Preferred Stock, (c)&nbsp;upon exercise of the Note Warrants, THLPV Warrants and Scura Rise
Warrants, and (d)&nbsp;in connection with the Exeter Securities, together with the shares of Common Stock issuable in payment for consulting services: (i)&nbsp;will have aggregate voting power equal to or in excess of 20 percent of the voting power
of the Company&#146;s presently issued and outstanding shares of Common Stock; (ii)&nbsp;will have an aggregate share denomination equal to or in excess of 20 percent of the Company&#146;s presently issued and outstanding shares of Common Stock; and
(iii)&nbsp;may result in a change of control of the Company; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, certain of the proposed issuances of securities described above may result in the issuance of
Common Stock at an effective price less than the greater of the book value or market value of the Company&#146;s Common Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS,
Marketplace Rule 4350(i)(1) promulgated by The Nasdaq Stock Market, Inc. (&#147;<U>Nasdaq</U>&#148;) requires stockholder consent prior to the issuance of shares of Common Stock or securities convertible into shares of Common Stock that will result
in the acquisition of the stock or assets of another company if: (i)&nbsp;the present or potential issuance of Common Stock will have upon issuance voting power equal to or in excess of 20 percent of the voting power outstanding before such issuance
or potential issuance, or (ii)&nbsp;the number of shares of Common Stock to be issued is or will be equal to or greater than 20 percent of the Company&#146;s presently issued and outstanding shares of Common Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, Marketplace Rule 4350(i)(1) requires stockholder consent prior to the issuance of shares of Common Stock or securities convertible into shares
of Common Stock a price less than the greater of the book value or market value of the Company&#146;s Common Stock if: (i)&nbsp;the Common Stock will have upon issuance voting power equal to or in excess of 20 percent of the voting power outstanding
before such issuance or potential issuance, or (ii)&nbsp;the number of shares of Common Stock to be issued is or will be equal to or greater than 20 percent of the Company&#146;s presently issued and outstanding shares of Common Stock; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, Marketplace Rule 4350(i)(1) also requires stockholder consent prior to the issuance of shares of Common Stock or securities convertible into
shares of Common Stock that will result in a change of control of the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, in order to induce the Series Q Purchasers and the
Senior Note Investors to consummate their proposed investment transactions for the benefit of all stockholders of the Company, including the Holders, the Company has requested, and the Holders have agreed, to enter into this Agreement; and
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, it is the intent of the parties to this Agreement that the consents set forth herein are provided pursuant to, and in compliance
with, Section&nbsp;228 of the General Corporation Law of the state of Delaware. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the mutual promises
made herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">A G R E E M E N T: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(1) <U>Common Stock Holder Consents</U>. Each Common Stock Holder hereby consents to
the Company&#146;s issuance of: (i)&nbsp;the Series Q Preferred Stock as described in the preceding paragraphs, together with any PIK Shares issuable in payment of dividends on the Series Q Preferred Stock, (ii)&nbsp;the Note Warrants, THLPV
Warrants and Scura Rise Warrants, (iii)&nbsp;the Exeter Securities, and (iv)&nbsp;effective upon the 20th calendar day following the Company&#146;s mailing </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">to its stockholders a related information statement prepared in compliance with Regulation 14C promulgated under the Securities Exchange Act of 1934, as
amended, the shares of Common Stock issuable upon conversion of the Series Q Preferred Stock and any PIK Shares, and upon the exercise of the Note Warrants, THLPV Warrants and Scura Rise Warrants, and the shares of Common Stock issuable in
consideration for consulting services and in connection with the Exeter Securities, with the understanding that the issuance of such securities by the Company: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(a) may be at an effective price per share of Common Stock less than the greater of the book value or market value of the Company&#146;s Common Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) will result in the issuance of Common Stock with voting power equal to or in excess of 20 percent of the voting power of the Company&#146;s presently
issued and outstanding shares of Common Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) will result in the issuance of Common Stock in an aggregate share denomination equal to
or in excess of 20 percent of the Company&#146;s presently issued and outstanding shares of Common Stock; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) may result in a change
in control of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">Each Common Stock Holder hereby consents to and ratifies the Certificate of Amendment to Amended and Restated Certificate of
Incorporation attached as <U>Exhibit A</U> hereto. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(2) <U>Series M Holder Consent, Waiver, and Amendment</U>. Each of the undersigned
Series M Holders hereby: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) consents to the Company&#146;s designation of the preferences and rights of the Series Q Preferred Stock,
including without limitation the superiority of the Series Q Preferred Stock in right of preference as to dividends and distributions made upon the liquidation of the Company, and the proposed issuance and sale of the Series Q Preferred Stock as
described in the preceding paragraphs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) consents to and ratifies the Certificate of Amendment to Amended and Restated Certificate of
Incorporation attached as <U>Exhibit A</U> hereto; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) waives, in connection with the issuance of the Series Q Preferred Stock, the Note
Warrants, THLPV Warrants, Scura Rise Warrants, Exeter Securities and the Common Stock, all as described in the preceding paragraphs, the application of Section&nbsp;4D of the Series M Certificate of Designations, Preferences and Rights to reduce the
Conversion Price to an amount less than $2.10 per share; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) consents to and ratifies each of the transactions described in the
Company&#146;s Proxy Statement for Annual Meeting of Stockholders to be held June&nbsp;28, 2006 under the caption &#147;Certain Relationships and Related Transactions.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(3) <U>Series N Holder Consent, Waiver, and Amendment</U>. Each of the undersigned Series N Holders
hereby: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) consents to the Company&#146;s designation of the preferences and rights of the Series Q Preferred Stock, including without
limitation the superiority of the Series Q Preferred Stock in right of preference as to dividends and distributions made upon the liquidation of the Company, and the proposed issuance and sale of the Series Q Preferred Stock as described in the
preceding paragraphs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) consents to and ratifies the Certificate of Amendment to Amended and Restated Certificate of Incorporation
attached as <U>Exhibit A</U> hereto; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) waives, in connection with the issuance of the Series Q Preferred Stock, the Note Warrants, THLPV
Warrants, Scura Rise Warrants, Exeter Securities and the Common Stock, all as described in the preceding paragraphs, the application of Section&nbsp;4D of the Series N Certificate of Designations, Preferences and Rights to reduce the Conversion
Price to an amount less than $2.10 per share; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) consents to and ratifies each of the transactions described in the Company&#146;s
Proxy Statement for Annual Meeting of Stockholders to be held June&nbsp;28, 2006 under the caption &#147;Certain Relationships and Related Transactions.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">(4) <U>Series O Holder Consent, Waiver, and Amendment</U>. Each of the undersigned Series O Holders hereby: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(a) consents to the Company&#146;s designation of the preferences and rights of the Series Q Preferred Stock, including without limitation the superiority of the Series Q Preferred Stock in right of preference as to dividends and
distributions made upon the liquidation of the Company, and the proposed issuance and sale of the Series Q Preferred Stock as described in the preceding paragraphs; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(b) consents to and ratifies the Certificate of Amendment to Amended and Restated Certificate of Incorporation attached as <U>Exhibit A</U> hereto; and </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) waives, in connection with the issuance of the Series Q Preferred Stock, the Note Warrants, THLPV Warrants, Scura Rise Warrants, Exeter Securities
and the Common Stock, all as described in the preceding paragraphs, the application of: (i)&nbsp;Section&nbsp;4D of the Series O Certificate of Designations, Preferences and Rights to reduce the Conversion Price to an amount less than $2.10 per
share; and (ii)&nbsp;the Right of First Refusal on Future Financings set forth in Section&nbsp;5 of the stock purchase agreement governing the sale of the Series O Convertible Preferred Stock to the Series O Holder. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(5) <U>Notice to Holders</U>. Within 30 days following the issuance of the Series Q Preferred Stock as contemplated in the preceding paragraphs, the
Company shall deliver written notice to the undersigned Holders of the Existing Preferred that the Conversion Price for their shares of Series M, N and O Preferred Stock has been reduced to $2.10 per share pursuant to the terms of this Agreement.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(6) <U>Voting and Support</U>. At all times throughout the four-month period commencing on the date of the first signature appearing on
the signature pages hereto (the &#147;<U>Term</U>&#148;), each Holder does hereby irrevocably agree to consent or vote (or cause to be voted) all of the Shares </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">beneficially owned by such Holder at every annual, special or adjourned meeting of the stockholders (including any written consent in lieu of a meeting) of
the Company: (i)&nbsp;in favor of the adoption of each of the Proposals substantially as set forth on <U>Exhibit B</U> attached hereto, (ii)&nbsp;against any proposal relating to any action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company under the Stock Purchase Agreement or the Note and Warrant Purchase Agreements or which would result in any of the conditions to the Company&#146;s obligations under the
Stock Purchase Agreement or the Note and Warrant Purchase Agreements not being fulfilled, (iii)&nbsp;in favor of any other matter relating to the consummation of the transactions contemplated by the Stock Purchase Agreement and the Note and Warrant
Purchase Agreements, and (iv)&nbsp;except as specifically requested in writing by the Company in advance, against any other action which is intended or would reasonably be expected to impede, interfere with, delay, postpone, discourage or materially
adversely affect the transactions contemplated by the Stock Purchase Agreement and the Note and Warrant Purchase Agreements or the contemplated economic benefits of any of the foregoing. During the Term, the Holders will not enter into any agreement
or understanding with any Person to vote in any manner inconsistent with this <U>Section (5)</U>. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(7) <U>IRREVOCABLE PROXY</U>. EACH
HOLDER DOES HEREBY GRANT TO, AND APPOINT VINCENT WASIK AND EDWARD STONE, AND EACH OF THEM INDIVIDUALLY, IN THEIR RESPECTIVE CAPACITIES AS OFFICERS OR REPRESENTATIVES OF THE COMPANY, AND ANY INDIVIDUAL WHO SHALL HEREAFTER SUCCEED TO ANY OFFICE OF THE
COMPANY HELD THEREBY, AS ITS IRREVOCABLE PROXY AND ATTORNEY-IN-FACT (WITH FULL POWER OF SUBSTITUTION) TO VOTE ITS SHARES OR PROVIDE ANY CONSENT AS PROVIDED IN <U>SECTION&nbsp;(5)</U> ABOVE AND WITH RESPECT TO ANY OTHER VOTE OR CONSENT SET FORTH IN
SECTIONS (1)&nbsp;THROUGH (4)&nbsp;ABOVE (TO THE EXTENT NOT ALREADY GIVEN AND EFFECTIVE) AND ANY OF THE TERMS, CONDITIONS AND OTHER PROVISIONS CONTAINED IN THIS AGREEMENT DURING THE TERM. EACH HOLDER INTENDS THIS PROXY TO BE IRREVOCABLE AND COUPLED
WITH AN INTEREST AND WILL TAKE SUCH FURTHER ACTION AND EXECUTE AND DELIVER SUCH OTHER INSTRUMENTS AS MAY BE NECESSARY TO EFFECTUATE THE INTENT OF THIS IRREVOCABLE PROXY AND HEREBY REVOKES ANY PROXY PREVIOUSLY GRANTED BY SUCH HOLDER WITH RESPECT TO
THE SHARES. NOTWITHSTANDING THE FOREGOING, THIS IRREVOCABLE PROXY WILL BE AUTOMATICALLY REVOKED WITHOUT ANY FURTHER ACTION ON THE PART OF THE HOLDERS OR THE COMPANY AT THE END OF THE TERM. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(8) <U>Conduct of Holders</U>. None of the Holders will: (i)&nbsp;take, agree or commit to take any action that would make any representation and
warranty of the Holders hereunder inaccurate in any respect at any time during the Term, or (ii)&nbsp;omit, or agree or commit to omit, to take any action necessary to prevent any representation or warranty from being inaccurate in any respect at
any time during the Term, in each case except to the extent required by applicable law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(9) <U>Further Assurances</U>. During the Term,
the Holders will take such further actions and execute such further documents and instruments as may reasonably be requested by the Company to further and facilitate the purposes of this Agreement. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(10) <U>Representations and Warranties</U>. Each Holder represents and warrants, severally and not
jointly, to the Company as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Access to Information</U>. Such Holder has been provided with any and all documents describing
the proposed transactions contemplated by this Agreement requested by such Holder, and has been provided access to officers of the Company and other members of its management to obtain any other information deemed relevant to the Holder&#146;s
decision whether or not to enter into this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Valid Title, etc.</U> With respect to the Existing Preferred and Common Stock
such Holder beneficially owns (as defined in Rule 13d-3 of the Securities and Exchange Act of 1934 (each a &#147;<U>Share</U>&#148; and collectively, the &#147;<U>Shares</U>&#148;) there are no restrictions on the rights of disposition pertaining
thereto, except for any restrictions contemplated herein or arising under applicable securities laws, such Holder has exclusive power to vote, exclusive power of disposition and exclusive power to agree to all of the matters set forth in this
Agreement, in each case with respect to all of such Holder&#146;s Shares with no limitations, qualifications or restrictions on these rights. Each Holder represents that neither the Holder nor any of the Holder&#146;s affiliates is party to or bound
by any agreement with respect to the voting (by proxy or otherwise), sale or other disposition of the Shares (other than this Agreement). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(c) <U>Non-Contravention</U>. The execution and delivery of this Agreement by such Holder and the performance by such Holder of such Holder&#146;s obligations under this Agreement: (i)&nbsp;are within such Holder&#146;s powers, have been
duly authorized by all necessary action (including any consultation, approval or other action by or with any other person), (ii)&nbsp;require no action by or in respect of, or filing with, any governmental body, agency, official or authority, and
(iii)&nbsp;do not and will not contravene or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any right or obligation of such Holder or to a loss of any material benefit of such Holder under, any
provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on him or result in the imposition of any lien on any asset of such Holder other than any conflicts, breaches,
violations, defaults, obligations, rights or losses that individually or in the aggregate would not: (x)&nbsp;impair the ability of such Holder to perform the Holder&#146;s obligations under this Agreement or (y)&nbsp;prevent or delay the
consummation of any of the transactions contemplated hereby. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(11) <U>Binding Effect; Indemnification</U>. This Agreement has been duly
executed and delivered by such Holder, and this Agreement is the valid and binding agreement of the Holder, enforceable against the Holder in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors&#146; rights and remedies generally and to general principles of equity. Holder acknowledges and agrees that the provisions of this Agreement are enforceable against Holder, subject to
the limitations referred to above, regardless of the effect of this Agreement on persons not a party hereto. Holder may not sell, transfer or otherwise dispose of, in any manner (&#147;<U>Transfer</U>&#148;) any shares of Existing Preferred without
delivering to the Company the written consent of the transferee binding the transferee to the terms and conditions of this Agreement and Holder shall indemnify the Company from and against any costs, expenses, liabilities, losses or damages of any
other kind or nature arising from any Transfer of Holder&#146;s shares of Existing Preferred in contravention of this covenant. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(12) <U>Notices</U>. Any notices provided for in this Agreement shall be in writing and shall be either
personally delivered, sent by reputable overnight courier service, faxed or mailed by first class mail, return receipt requested, to the recipient at the address below indicated: </FONT></P> <P
STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="84%" BORDER="0" ALIGN="center">

<TR>
<TD WIDTH="100%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><U>if to the Company:</U></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">One Morningside Drive</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Suite 200</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Westport, CT 06880</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Telecopy: (203)&nbsp;349-4198</FONT></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Attention: Edward Stone</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><U>if to a Holder:</U></FONT></TD></TR>
<TR>
<TD HEIGHT="8"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">At the address for such Holder as set forth in the records of the Company.</FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">or such other address or to the attention of such other person as the recipient party shall have specified by
prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(13) <U>Miscellaneous</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Each Holder acknowledges and agrees that this Agreement constitutes a binding agreement of such
Holder and that the Company may be irreparably damaged if for any reason such Holder fails to perform any of its obligations hereunder, and that the Company would not have an adequate remedy at law for money damages in that event. Accordingly, the
Company will be entitled to specific performance and injunctive and other equitable relief to enforce the performance of this Agreement by the Holders. This provision is without prejudice to any other rights that the Company may have against any
Holder for any failure to perform its respective obligations under this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) This Agreement may be executed in separate counterparts, each of which is
deemed to be an original and all of which taken together constitute one and the same agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) This Agreement, together with any
Exhibit hereto, embodies the complete agreement and understanding among the parties concerning the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral,
with respect to the subject matter hereof. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>Governing Law; Jurisdiction; Waiver of Jury Trial</U>. THE PROVISIONS OF THIS AGREEMENT AND THE
DOCUMENTS DELIVERED PURSUANT HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (EXCLUDING ANY CONFLICT OF LAW RULE OR PRINCIPLE THAT WOULD REFER TO THE LAWS OF ANOTHER JURISDICTION). EACH PARTY HERETO
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OR ANY DELAWARE STATE COURT, IN ANY ACTION OR PROCEEDING THAT IS OTHERWISE PERMITTED UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION
WITH THIS AGREEMENT, AND EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MUST BE BROUGHT AND/OR DEFENDED IN SUCH COURT. EACH PARTY HERETO HEREBY CONSENTS TO SERVICE OF PROCESS BY ANY MEANS
AUTHORIZED BY THE APPLICABLE LAW OF THE FORUM IN ANY ACTION BROUGHT UNDER OR ARISING OUT OF THIS AGREEMENT, AND EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT EFFECTIVELY, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) This Agreement shall be binding upon and inure solely to the benefit of: (i)&nbsp;each party hereto, (ii)&nbsp;the Series Q Purchasers,
(iii)&nbsp;the Senior Note Investors, and (iv)&nbsp;all other proposed recipients of the Company&#146;s securities identified herein, together with the respective successors, assigns and transferees of each of the above, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(g) <U>Confidentiality</U>. Each Holder acknowledges that this Agreement and its terms, until otherwise disclosed by the Company are confidential
information and that the Holder has received and will continue to receive additional confidential information regarding the Company. Accordingly, the Holders agree to use their reasonable efforts to prevent the unauthorized disclosure of any
confidential information concerning the Company that has been or is disclosed to it or its agents in connection with the entry of the parties in to this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, any Holder
may make confidential information available to the Holder&#146;s counsel, accountants and financial advisors; <U>provided</U>, <U>however</U>, the disclosing Holder shall remain liable to the Company and all other parties hereto damaged by any
unauthorized disclosure by the Holder&#146;s representative. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(h) The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(i) All costs and expenses incurred in connection with this Agreement will be paid by the party incurring
such cost or expense. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(j) No amendment, modification or waiver shall be binding or effective with respect to any provision hereof without
the prior written consent of the holders of at least 62.5 percent of each series of Existing Preferred outstanding, voting as a separate class, and a majority of the outstanding Common Stock (including other classes or series of capital stock
entitled to vote on any matter on which the holders of Common Stock are entitled to vote) at the time such action is taken. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">* * *
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">[SIGNATURE PAGES FOLLOW] </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">10 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have executed this Voting, Consent, Amendment and Waiver Agreement as
of the dates indicated below. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="93%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">VELOCITY EXPRESS CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

<DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">EXHIBIT A </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">CERTIFICATE OF AMENDMENT </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">TO </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">CERTIFICATE OF INCORPORATION </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">OF </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">VELOCITY EXPRESS CORPORATION </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Velocity Express Corporation, a Delaware corporation (the
&#147;<U>Corporation</U>&#148;), does hereby certify that: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FIRST: This Certificate of Amendment amends the provisions of the
Corporation&#146;s Certificate of Incorporation, as amended (the &#147;<U>Certificate of Incorporation</U>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">SECOND: The Amendment
to the Corporation&#146;s Certificate of Incorporation set forth below was duly adopted in accordance with the provisions of Section&nbsp;242 and has been consented to in writing by stockholders of the Corporation in accordance with Section&nbsp;228
of the General Corporation Law of the state of Delaware. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">THIRD: Sections 2 and 3 of the Certificate of Designations, Rights and
Preferences of Series M Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, are hereby amended by deleting Sections 2 and 3 in their entirety and replacing them with the following (<I><U>changes from the current
Certificate are marked</U></I>): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <U>Dividends</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(a) Each holder of Series M Preferred Stock, in preference and priority to the holders of all other classes of stock other than holders of the Company&#146;s Series P Convertible Preferred Stock (&#147;Series P
Preferred&#148;) and Series Q Convertible Preferred Stock (&#147;Series Q Preferred&#148;), shall be entitled to receive, with respect to each share of Series M Preferred Stock then outstanding and held by such holder of Series M Preferred Stock,
dividends, commencing from the date of issuance of such share of Series M Preferred Stock, at the rate of six percent (6%)&nbsp;per annum of the Series M Stated Value (the &#147;Series M Preferred Dividends&#148;). The Series M Preferred Dividends
shall be cumulative, whether or not earned or declared, and shall be paid quarterly in arrears on the first day of March, June, September and December in each year. During the first two (2)&nbsp;years following the date of issuance, the Series M
Preferred Dividends shall be paid by issuing to each holder of Series M Preferred Stock such number of shares of Series M Preferred Stock equal to the Series M Preferred Dividend divided by the Series M Stated Value (&#147;PIK Shares&#148;). From
and after the second anniversary of the date of issuance, the Company shall have the option to pay the Series M Preferred Dividends in PIK Shares or in cash out of legally available funds therefor. Any election by the Company to pay dividends in
shares of Series M Preferred Stock or cash shall be made uniformly with respect to all outstanding shares of Series M Preferred Stock for a given dividend period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(b) No dividends shall be paid on any Common Stock of the Company or any other capital stock of the Company other than the Series Q Preferred during any fiscal year of the Company until all outstanding Series M
Preferred Dividends (with respect to the current fiscal year and all prior fiscal years) shall have been paid or declared and set apart for payment to the holders of Series M Preferred Stock. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company shall at any time pay a dividend on the Common Stock (other than a
dividend payable solely in shares of Common Stock) or any other class or series of capital stock of the Company other than the Series Q Preferred, the Company shall, at the same time, pay to each holder of Series M Preferred Stock a dividend equal
to the dividend that would have been payable to such holder if the shares of Series M Preferred Stock held by such holder had been converted into Common Stock on the date of determination of holders of Common Stock entitled to receive such
dividends. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Liquidation; Redemption</U>. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the holders of the shares of Series M Preferred Stock shall rank (i)&nbsp;senior to the holders of the Common Stock and any other class or series of capital stock of the Company other than the Series Q Preferred and (ii)&nbsp;junior to
the holders of the Series Q Preferred, as to such distributions, and shall be entitled to be paid an amount per share equal to the Series M Stated Value plus any accrued and unpaid Series M Preferred Dividends (the &#147;Liquidation
Preference&#148;). If upon such liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the assets to be distributed among the holders of the Series M Preferred Stock and any class or Series of capital stock ranking
on a parity with the Series M Preferred Stock as to such distributions shall be insufficient to permit payment to the holders of the Series M Preferred Stock and any such class or series of capital stock of their respective liquidation amount, then
the entire assets of the Company to be distributed shall be distributed pro rata to the holders of Series M Preferred Stock and the holders of such class or series of capital stock ranking on a parity with the Series M Preferred Stock as to such
distributions according to the preferential amounts due thereon. Unless waived in writing by the holders of at least 62.5 percent of the Series M Preferred Stock then outstanding, voting together as one class, a consolidation or merger of the
Company into or with any other entity or entities, or the sale or transfer by the Company of all or substantially all its assets, in each case under circumstances in which the holders of a majority in voting power of the outstanding capital stock of
the Company, immediately prior to such a merger, consolidation or sale, own less than a majority in voting power of the outstanding capital stock of the corporation or the surviving or resulting corporation or acquirer, as the case may be,
immediately following such a merger, consolidation or sale (each such transaction being hereinafter referred to as a &#147;Corporate Transaction&#148;) shall be deemed to be a liquidation within the meaning of this Section&nbsp;3; <U>provided</U>,
<U>however</U>, that the holder(s) of any share or shares of Series M Preferred Stock shall have the right, at its option, upon consummation of a Corporate Transaction, to require the Company to redeem such holder(s) share or shares of Series M
Preferred Stock for an amount equal to such holder&#146;s Liquidation Preference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FOURTH: The definition of the term &#147;Excluded
Stock&#148; appearing in Section&nbsp;1 of the Certificate of Designations, Rights and Preferences of Series M Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by replacing the word
&#147;and&#148; which precedes &#147;(E)&#148; with a comma &#147;,&#148; and inserting at the end of the sentence: &#147;and (F)&nbsp;any issuance of shares of Series N, O, P or Q Convertible Preferred Stock, including without limitation any
issuance in payment of dividends with respect to the same series of preferred stock.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FIFTH: Section&nbsp;6 of the Certificate of Designations, Rights and Preferences of Series M Convertible
Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by striking the text appearing in subsection (e)&nbsp;and replacing it with &#147;(not used)&#148;. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">SIXTH: The Certificate of Designations, Rights and Preferences of Series M Convertible Preferred Stock set forth in the Certificate of Incorporation, as
amended, is further amended by inserting a Section&nbsp;11 containing the following text: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><U>Transactions with Affiliates</U>. The Company
shall not enter into any transaction with an Affiliate or stockholder of the Company unless the same is approved by: (i)&nbsp;the Audit Committee of the Company&#146;s Board of Directors or (ii)&nbsp;a majority of the members of the Company&#146;s
Board of Directors who fall within the definition of &#147;independent&#148; employed within the listing standards promulgated by The Nasdaq Stock Market, Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">SEVENTH: Sections 2 and 3 of the Certificate of Designations, Rights and Preferences of Series N Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, are hereby amended by deleting
Sections 2 and 3 in their entirety and replacing them with the following (<I><U>changes from the current Certificate are marked</U></I>): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">2. <U>Dividends</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Each holder of Series N Preferred Stock, in preference and priority to the holders of all other classes
of stock other than holders of the Company&#146;s Series M Convertible Preferred Stock (&#147;Series M Preferred&#148;), Series P Convertible Preferred Stock (&#147;Series P Preferred&#148;) and Series Q Convertible Preferred Stock (&#147;Series Q
Preferred&#148;), shall be entitled to receive, with respect to each share of Series N Preferred Stock then outstanding and held by such holder of Series N Preferred Stock, dividends, commencing from the date of issuance of such share of Series N
Preferred Stock, at the rate of six percent (6%)&nbsp;per annum of the Series N Stated Value (the &#147;Series N Preferred Dividends&#148;). The Series N Preferred Dividends shall be cumulative, whether or not earned or declared, and shall be paid
quarterly in arrears on the first day of March, June, September and December in each year. During the first two (2)&nbsp;years following the date of issuance, the Series N Preferred Dividends shall be paid by issuing to each holder of Series N
Preferred Stock such number of shares of Series N Preferred Stock equal to the Series N Preferred Dividend divided by the Series N Stated Value (&#147;PIK Shares&#148;). From and after the second anniversary of the date of issuance, the Company
shall have the option to pay the Series N Preferred Dividends in PIK Shares or in cash out of legally available funds therefor. Any election by the Company to pay dividends in shares of Series N Preferred Stock or cash shall be made uniformly with
respect to all outstanding shares of Series N Preferred Stock for a given dividend period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) No dividends shall be paid on any Common
Stock of the Company or any other capital stock of the Company other than the Series M Preferred, Series P Preferred and the Series Q Preferred during any fiscal year of the Company until all outstanding Series N Preferred Dividends (with respect to
the current fiscal year and all prior fiscal years) shall have been paid or declared and set apart for payment to the holders of Series N Preferred Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company shall at any time pay a dividend on the Common Stock (other than a
dividend payable solely in shares of Common Stock) or any other class or series of capital stock of the Company other than the Series M Preferred, Series P Preferred and the Series Q Preferred, the Company shall, at the same time, pay to each holder
of Series N Preferred Stock a dividend equal to the dividend that would have been payable to such holder if the shares of Series N Preferred Stock held by such holder had been converted into Common Stock on the date of determination of holders of
Common Stock entitled to receive such dividends. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Liquidation; Redemption</U>. Upon any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of the shares of Series N Preferred Stock shall rank (i)&nbsp;senior to the holders of the Common Stock and any other class or series of capital stock of the Company other than the Series M
Preferred, Series P Preferred and the Series Q Preferred and (ii)&nbsp;junior to the holders of the Series M Preferred, Series P Preferred and the Series Q Preferred, as to such distributions, and shall be entitled to be paid an amount per share
equal to the Series N Stated Value plus any accrued and unpaid Series N Preferred Dividends (the &#147;Liquidation Preference&#148;). If upon such liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the assets to
be distributed among the holders of the Series N Preferred Stock and any class or Series of capital stock ranking on a parity with the Series N Preferred Stock as to such distributions shall be insufficient to permit payment to the holders of the
Series N Preferred Stock and any such class or series of capital stock of their respective liquidation amount, then the entire assets of the Company to be distributed shall be distributed pro rata to the holders of Series N Preferred Stock and the
holders of such class or series of capital stock ranking on a parity with the Series N Preferred Stock as to such distributions according to the preferential amounts due thereon. Unless waived in writing by the holders of at least 62.5 percent of
the Series N Preferred Stock then outstanding, voting together as one class, a consolidation or merger of the Company into or with any other entity or entities, or the sale or transfer by the Company of all or substantially all its assets, in each
case under circumstances in which the holders of a majority in voting power of the outstanding capital stock of the Company, immediately prior to such a merger, consolidation or sale, own less than a majority in voting power of the outstanding
capital stock of the corporation or the surviving or resulting corporation or acquirer, as the case may be, immediately following such a merger, consolidation or sale (each such transaction being hereinafter referred to as a &#147;Corporate
Transaction&#148;) shall be deemed to be a liquidation within the meaning of this Section&nbsp;3; <U>provided</U>, <U>however</U>, that the holder(s) of any share or shares of Series N Preferred Stock shall have the right, at its option, upon
consummation of a Corporate Transaction, to require the Company to redeem such holder(s) share or shares of Series N Preferred Stock for an amount equal to such holder&#146;s Liquidation Preference. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">EIGHTH: The definition of the term &#147;Excluded Stock&#148; appearing in Section&nbsp;1 of the Certificate of Designations, Rights and Preferences of
Series N Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by replacing the word &#147;and&#148; which precedes &#147;(D)&#148; with a comma &#147;,&#148; and inserting at the end of the
sentence: &#147;and (E)&nbsp;any issuance of shares of Series M, O, P or Q Convertible Preferred Stock, including without limitation any issuance in payment of dividends with respect to the same series of preferred stock.&#148; </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">NINTH: Section&nbsp;6 of the Certificate of Designations, Rights and Preferences of Series N Convertible
Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by striking the text appearing in subsection (e)&nbsp;and replacing it with &#147;(not used)&#148;. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">TENTH: The Certificate of Designations, Rights and Preferences of Series N Convertible Preferred Stock set forth in the Certificate of Incorporation, as
amended, is further amended by inserting a Section&nbsp;11 containing the following text: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%"><FONT FACE="Times New Roman" SIZE="2"><U>Transactions with Affiliates</U>. The Company
shall not enter into any transaction with an Affiliate or stockholder of the Company unless the same is approved by: (i)&nbsp;the Audit Committee of the Company&#146;s Board of Directors or (ii)&nbsp;a majority of the members of the Company&#146;s
Board of Directors who fall within the definition of &#147;independent&#148; employed within the listing standards promulgated by The Nasdaq Stock Market, Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">ELEVENTH: Sections 2 and 3 of the Certificate of Designations, Rights and Preferences of Series O Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, are hereby amended by deleting
Sections 2 and 3 in their entirety and replacing them with the following (<I><U>changes from the current Certificate are marked</U></I>): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">2. <U>Dividends</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Each holder of Series O Preferred Stock, in preference and priority to the holders of all other classes
of stock other than holders of the Company&#146;s Series M Convertible Preferred Stock (&#147;Series M Preferred&#148;), Series N Convertible Preferred Stock (&#147;Series N Preferred&#148;), Series P Convertible Preferred Stock (&#147;Series P
Preferred&#148;) and Series Q Convertible Preferred Stock (&#147;Series Q Preferred&#148;), shall be entitled to receive, with respect to each share of Series O Preferred Stock then outstanding and held by such holder of Series O Preferred Stock,
dividends, commencing from the date of issuance of such share of Series O Preferred Stock, at the rate of six percent (6%)&nbsp;per annum of the Series O Stated Value (the &#147;Series O Preferred Dividends&#148;). The Series O Preferred Dividends
shall be cumulative, whether or not earned or declared, and shall be paid quarterly in arrears on the first day of March, June, September and December in each year. During the first two (2)&nbsp;years following the date of issuance, the Series O
Preferred Dividends shall be paid by issuing to each holder of Series O Preferred Stock such number of shares of Series O Preferred Stock equal to the Series O Preferred Dividend divided by the Series O Stated Value (&#147;PIK Shares&#148;). From
and after the second anniversary of the date of issuance, the Company shall have the option to pay the Series O Preferred Dividends in PIK Shares or in cash out of legally available funds therefor. Any election by the Company to pay dividends in
shares of Series O Preferred Stock or cash shall be made uniformly with respect to all outstanding shares of Series O Preferred Stock for a given dividend period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(b) No dividends shall be paid on any Common Stock of the Company or any other capital stock of the Company other than the Series M Preferred, Series N Preferred, Series P Preferred and the Series Q Preferred during
any fiscal year of the Company until all outstanding Series O Preferred Dividends (with respect to the current fiscal year and all prior fiscal years) shall have been paid or declared and set apart for payment to the holders of Series O Preferred
Stock. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company shall at any time pay a dividend on the Common Stock (other than a
dividend payable solely in shares of Common Stock) or any other class or series of capital stock of the Company other than the Series M Preferred, Series N Preferred, Series P Preferred and the Series Q Preferred, the Company shall, at the same
time, pay to each holder of Series O Preferred Stock a dividend equal to the dividend that would have been payable to such holder if the shares of Series O Preferred Stock held by such holder had been converted into Common Stock on the date of
determination of holders of Common Stock entitled to receive such dividends. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Liquidation; Redemption</U>. Upon any liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, the holders of the shares of Series O Preferred Stock shall rank (i)&nbsp;senior to the holders of the Common Stock, and (ii)&nbsp;junior to the holders of the Series M
Preferred, Series N Preferred, Series P Preferred and the Series Q Preferred, as to such distributions, and shall be entitled to be paid an amount per share equal to the Series O Stated Value plus any accrued and unpaid Series O Preferred Dividends
(the &#147;Liquidation Preference&#148;). If upon such liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the assets to be distributed among the holders of the Series O Preferred Stock and any class or Series of
capital stock ranking on a parity with the Series O Preferred Stock as to such distributions shall be insufficient to permit payment to the holders of the Series O Preferred Stock and any such class or series of capital stock of their respective
liquidation amount, then the entire assets of the Company to be distributed shall be distributed pro rata to the holders of Series O Preferred Stock and the holders of such class or series of capital stock ranking on a parity with the Series O
Preferred Stock as to such distributions according to the preferential amounts due thereon. Unless waived in writing by the holders of at least 62.5 percent of the Series O Preferred Stock then outstanding, voting together as one class, a
consolidation or merger of the Company into or with any other entity or entities, or the sale or transfer by the Company of all or substantially all its assets, in each case under circumstances in which the holders of a majority in voting power of
the outstanding capital stock of the Company, immediately prior to such a merger, consolidation or sale, own less than a majority in voting power of the outstanding capital stock of the corporation or the surviving or resulting corporation or
acquirer, as the case may be, immediately following such a merger, consolidation or sale (each such transaction being hereinafter referred to as a &#147;Corporate Transaction&#148;) shall be deemed to be a liquidation within the meaning of this
Section&nbsp;3; <U>provided</U>, <U>however</U>, that the holder(s) of any share or shares of Series O Preferred Stock shall have the right, at its option, upon consummation of a Corporate Transaction, to require the Company to redeem such holder(s)
share or shares of Series O Preferred Stock for an amount equal to such holder&#146;s Liquidation Preference. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">TWELFTH: The definition of
the term &#147;Excluded Stock&#148; appearing in Section&nbsp;1 of the Certificate of Designations, Rights and Preferences of Series O Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by
replacing the word &#147;and&#148; which precedes &#147;(D)&#148; with a comma &#147;,&#148; and inserting at the end of the sentence: &#147;and (E)&nbsp;any issuance of shares of Series M, N, P or Q Convertible Preferred Stock, including without
limitation any issuance in payment of dividends with respect to the same series of preferred stock.&#148; </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">THIRTEENTH: Sections 2 and 3 of the Certificate of Designations, Rights and Preferences of Series P
Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by deleting Sections 2 and 3 in their entirety and replacing them with the following (<I><U>changes from the current Certificate are
marked</U></I>): </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <U>Dividends</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(a) Each Holder of Series P Preferred Stock, in preference and priority to the Holders of all other classes of stock other than Holders of the Company&#146;s Series M Convertible Preferred Stock (the &#147;Series M Preferred&#148;) and the
Series Q Convertible Preferred Stock (the &#147;Series Q Preferred&#148;), shall be entitled to receive, with respect to each share of Series P Preferred Stock then outstanding and held by such Holder of Series P Preferred Stock, dividends,
commencing from the date of issuance of such share of Series P Preferred Stock, at the rate of eight percent (8%)&nbsp;per annum of the Series P Stated Value (the &#147;Series P Preferred Dividends&#148;); provided, however, that from and after the
Company&#146;s issuance of not less than 36,000,000 shares of Series Q Preferred, the Series P Preferred dividend rate shall be reduced to six percent (6%)&nbsp;per annum. The Series P Preferred Dividends shall be cumulative, whether or not earned
or declared, and shall be paid quarterly in arrears on the first day of February, May, August and November in each year. At the election of the Company, the Series P Preferred Dividends shall be paid by (a)&nbsp;issuing each Holder of Series P
Preferred Stock such number of shares of Series P Preferred Stock equal to the Series P Preferred Dividend divided by the Series P Stated Value (&#147;PIK Shares&#148;), or (b)&nbsp;cash out of legally available funds therefor. Any election by the
Company to pay dividends in shares of Series P Preferred Stock or cash shall be made uniformly with respect to all outstanding shares of Series P Preferred Stock for a given dividend period. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) No dividends shall be paid on any Common Stock of the Company or any other capital stock of the Company other than the Series M Preferred and the
Series Q Preferred during any fiscal year of the Company until all outstanding Series P Preferred Dividends (with respect to the current fiscal year and all prior fiscal years) shall have been paid or declared and set apart for payment to the
Holders of Series P Preferred Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company shall at any time pay a dividend on the Common Stock or any other
class or series of capital stock of the Company other than the Series M Preferred and the Series Q Preferred, the Company shall, at the same time, pay to each Holder of Series P Preferred Stock a dividend equal to the dividend that would have been
payable to such Holder if the shares of Series P Preferred Stock held by such Holder had been converted into Common Stock on the date of determination of Holders of Common Stock entitled to receive such dividends. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">3. <U>Liquidation; Redemption</U>. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the Holders of the
shares of Series P Preferred Stock shall rank (i)&nbsp;senior to the Holders of the Common Stock and the Company&#146;s Series N Convertible Preferred Stock and Series O Convertible Preferred, (ii)&nbsp;junior to the Holders of Series Q Preferred,
and (iii)&nbsp;on parity with the Holders of the Series M Preferred, as to such distributions, and shall be entitled to be paid an amount per share equal to the Series P Stated Value plus any accrued and unpaid Series P Preferred Dividends (the
&#147;Liquidation Preference&#148;). No modification of this Liquidation Preference shall be made without the prior written approval </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">of at least 62.5% of the then outstanding Series P Preferred. If upon such liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the assets to be distributed among the Holders of the Series P Preferred Stock and any class or Series P capital stock ranking on a parity with the Series P Preferred Stock as to such distributions shall be insufficient to permit
payment to the Holders of the Series P Preferred Stock and any such class or series of capital stock of their respective liquidation amount, then the entire assets of the Company to be distributed shall be distributed pro rata to the Holders of
Series P Preferred Stock and the Holders of such class or series of capital stock ranking on a parity with the Series P Preferred Stock as to such distributions according to the preferential amounts due thereon. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FOURTEENTH: The definition of the term &#147;Excluded Stock&#148; appearing in Section&nbsp;1 of the Certificate of Designations, Rights and Preferences
of Series P Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by replacing the word &#147;and&#148; which precedes &#147;(C)&#148; with a comma &#147;,&#148; and inserting at the end of the
sentence: &#147;and (D)&nbsp;any issuance of shares of Series M, N, O or Q Convertible Preferred Stock, including without limitation any issuance in payment of dividends with respect to the same series of preferred stock.&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">FIFTEENTH: The defined term &#147;Event of Default&#148; and the definition of such term appearing thereafter in Section&nbsp;1 of the Certificate of
Designations, Rights and Preferences of Series P Convertible Preferred Stock, together with Section&nbsp;4(c) thereof are hereby stricken in their entirety. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">[SIGNATURE PAGE FOLLOWS] </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by its officer
thereunto duly authorized this <B></B><U>&nbsp;&nbsp;&nbsp;&nbsp;</U> day of June<B>, </B>2006. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">EXHIBIT B </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><U>PROPOSALS </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(1) To approve the designation of the preferences and rights of the Series Q Convertible
Preferred Stock, and the issuance of up to 50,000,000 shares of the Company&#146;s Series Q Convertible Preferred Stock, par value $.004 per share, convertible into an equal number of shares of Common Stock, subject to adjustment, together with the
potential future issuance of additional shares of Series Q Preferred Stock in payment of dividends, which shares shall also be convertible into shares of Common Stock. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">(2) To approve the issuance of four-year warrants to purchase up to 26,000,000 shares of Common Stock, subject to adjustment, at an exercise price of $1.45 per share, subject to adjustment, in connection with the
Company&#146;s issuance of its senior secured notes. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(3) To approve the issuance of issuance of shares of Common Stock, or securities
convertible into or exercisable for Common Stock or a combination thereof with an aggregate fair value of approximately $3,200,000, in connection with the acquisition of the capital stock and securities convertible into the capital stock of another
company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(4) To approve the issuance of four-year warrants to purchase up to 250,000 and 547,500 shares, respectively, of Common Stock,
subject to adjustment, at an exercise price of $.01 per share in consideration for merger and acquisition services and credit enhancements in the form of loan guarantees. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">(5) To approve the issuance of four-year warrants to purchase up to 400,000 shares of Common Stock, subject to adjustment, at an exercise price of $1.50 per share in satisfaction of investment banking fees.
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(6) To approve the issuance of up to 500,000 shares of Common Stock in consideration for consulting services. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">B-1 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>6
<FILENAME>dex103.htm
<DESCRIPTION>FORM OF CONSENT, AMENDMENT AND WAIVER AGREEMENT
<TEXT>
<HTML><HEAD>
<TITLE>Form of Consent, Amendment and Waiver Agreement</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.3 </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><U>CONSENT, AMENDMENT AND WAIVER AGREEMENT </U></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This CONSENT, AMENDMENT AND WAIVER AGREEMENT (this
&#147;<U>Agreement</U>&#148;) is dated effective June 29, 2006, and entered into by and among Velocity Express Corporation, a Delaware corporation (the &#147;<U>Company</U>&#148;) and each of the stockholder signatories hereto constituting the
holders (collectively, the &#147;<U>Holders</U>&#148;) of a majority of the issued and outstanding Series P Convertible Preferred Stock, par value $.004 per share (the &#147;<U>Series P Preferred Stock</U>&#148;). </FONT></P> <P
STYLE="margin-top:24px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">W I T N E S S E T H: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company
and certain new investors (the &#147;<U>Series Q Purchasers</U>&#148;) intend to enter into a stock purchase agreement (the &#147;<U>Stock Purchase Agreement</U>&#148;) pursuant to which the Company will issue to the Series Q Purchasers up to
45,000,000 shares of the Company&#146;s Series Q Convertible Preferred Stock, par value $.004 per share, (&#147;<U>Series Q Preferred Stock</U>&#148;) convertible into an equal number of shares of Common Stock, subject to adjustment, on the terms
and conditions set forth in the Stock Purchase Agreement; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the proposed Certificate of Designations, Preferences and Rights of the
Series Q Preferred Stock provides for the payment of dividends thereon, at the option of the Company, in the form of shares of Series Q Preferred Stock (&#147;<U>PIK Shares</U>&#148;); </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, certain rights and preferences set forth in the proposed Series Q Preferred Stock Certificate of Designations, Preferences and Rights are
inconsistent with the rights and preferences of the Series P Preferred Stock, necessitating an amendment to the Certificate of Designations, Preferences and Rights of the Series P Preferred Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Certificate of Designations, Preferences and Rights of the Series P Preferred Stock precludes the designation of the preferences and rights
of the Series Q Preferred Stock and the issuance of the Series Q Preferred Stock in the absence of prior written consent from the holders of a majority of the Series P Preferred Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the purchase agreements governing the Company&#146;s sale of the Series P Preferred Stock to the Holders provide for rights of participation and
exchange applicable to the Company&#146;s proposed issuance and sale of the Series Q Preferred Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company intends to
enter into purchase agreements (the &#147;<U>Note and Warrant Purchase Agreements</U>&#148;) with certain investors (the &#147;<U>Senior Note Investors</U>&#148;), pursuant to which the Company will issue Senior Secured Notes (the
&#147;<U>Notes</U>&#148;) and four-year warrants (each a &#147;<U>Note Warrant</U>&#148;) to purchase an aggregate of approximately 26,000,000 shares of Common Stock, subject to adjustment, at an exercise price of $1.45 per share, subject to
adjustment; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the execution and delivery of this Agreement by the parties hereto is a condition precedent to the Company entering
into the Stock Purchase Agreement and the Note and Warrant Purchase Agreements; </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, proceeds from the issuance and sale of the Series Q Preferred, the Notes and the Warrants,
together with the issuance of shares of Common Stock, or securities convertible into or exercisable for Common Stock or a combination thereof with an aggregate fair value of approximately $3,200,000 (&#147;<U>Exeter Securities</U>&#148;) , will be
used to effect the purchase of a portion of the issued and outstanding capital stock, and securities convertible into shares of the capital stock, of another company (the &#147;<U>Proposed Acquisition</U>&#148;); </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, in connection with the transactions contemplated by the Stock Purchase Agreement and the Note and Warrant Purchase Agreements, the Company
proposes to issue to Jefferies and Company, Broadband Capital, Meritage Funds and Terra Nova Trading, LLC, in payment of placement agent and finders fees, an aggregate of approximately 2,550,000 shares of Series Q Preferred Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company proposes to issue to TH Lee Putnam Ventures, a stockholder of the Company, warrants (&#147;<U>THLPV Warrants</U>&#148;) to purchase
up to 250,000 and 547,500 shares, respectively, of Common Stock at a price of $.01 per share, in consideration for merger and acquisition services and credit enhancements in the form of loan guarantees provided to the Company; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, in connection with the Proposed Acquisition, the Company intends to issue: (i)&nbsp;warrants to purchase up to 400,000 shares of Common Stock at
a price of $1.50 per share (the &#147;<U>Scura Rise Warrants</U>&#148;) to Scura Rise&nbsp;&amp; Partners, LLC in satisfaction of investment banking fees; and (ii)&nbsp;up to approximately 500,000 shares of Common Stock to certain individuals in
payment for consulting services; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, the Company proposes to issue 375,000 shares of Series Q Preferred Stock to Pequot Capital
Management, a stockholder of the Company, in consideration for credit enhancements in the form of loan guarantees provided for the benefit of the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">WHEREAS, the shares of Common Stock issuable upon: (a)&nbsp;conversion of the Series Q Preferred Stock, (b)&nbsp;conversion of PIK Shares issuable as dividends on the Series Q Preferred Stock, (c)&nbsp;upon exercise
of the Note Warrants, THLPV Warrants and Scura Rise Warrants, and (d)&nbsp;in connection with the Exeter Securities, together with the shares of Common Stock issuable in payment for consulting services: (i)&nbsp;will have aggregate voting power
equal to or in excess of 20 percent of the voting power of the Company&#146;s presently issued and outstanding shares of Common Stock; (ii)&nbsp;will have an aggregate share denomination equal to or in excess of 20 percent of the Company&#146;s
presently issued and outstanding shares of Common Stock; and (iii)&nbsp;may result in a change of control of the Company; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, in
order to induce the Series Q Purchasers and the Senior Note Investors to consummate their proposed investment transactions for the benefit of all stockholders of the Company, including the Holders, the Company has requested, and the Holders have
agreed, to enter into this Agreement; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">WHEREAS, it is the intent of the parties to this Agreement that the consents set forth herein
are provided pursuant to, and in compliance with, Section&nbsp;228 of the General Corporation Law of the state of Delaware. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the mutual promises made herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A G R E E M E N T:
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(1) <U>Consent, Waiver, and Amendment</U>. Each of the undersigned Holders (together with the Company as to item (c)&nbsp;below) hereby:
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) consents to the Company&#146;s designation of the preferences and rights of the Series Q Preferred Stock, including without limitation
the superiority of the Series Q Preferred Stock in right of preference as to dividends and distributions made upon the liquidation of the Company, and the issuance and sale of the Series Q Preferred Stock; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) consents to and ratifies the amendment to the Series P Certificate of Designations, Preferences and Rights set forth on <U>Exhibit A</U> attached
hereto; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) consents to the establishment of a Conversion Price of $1.23 per share, subject to adjustment as a result of applicable future
transactions, if any (but not pursuant to, or in connection with, any of the transactions described in the preceding paragraphs), in compliance with the terms of the Series P Certificate of Designations, Preferences and Rights, as amended;
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) waives, in connection with the issuance and sale of the Series Q Preferred Stock the application of the Right of First Refusal on
Future Financings set forth in Section&nbsp;6 of the stock purchase agreement governing the sale of the Series P Preferred Stock to the Holder; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman"
SIZE="2">(e) consents to an amendment of the stock purchase agreement governing the sale of the Series P Preferred Stock to the Holder to delete Section&nbsp;6 thereof in its entirety effective upon the closing of the sale of the Series Q Preferred
Stock contemplated by the Stock Purchase Agreement; and </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) consents to an amendment of Section&nbsp;2(a)(iii) of that certain
Registration Rights Agreement, dated October&nbsp;14, 2005, by and among the Company and each of the Investors (as defined therein), pursuant to which the following text is hereby inserted at the end of the sentence appearing in such
Section&nbsp;2(a)(iii): &#147;; <U>provided</U>, <U>however</U>, that in connection with any underwritten Piggyback Registration of securities, the right of holders of Registrable Securities to participate in such registration shall be subject to:
(i)&nbsp;the judgment of the managing underwriter regarding the number of Registrable Securities that may participate without adversely affecting the public offering; and (ii)&nbsp;the right of holders of Common Stock issued or issuable upon
conversion of Series Q Preferred Stock to participate in the underwritten offering in priority over the holders of Registrable Securities.&#148; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">(2) <U>Binding Effect; Indemnification</U>. This Agreement has been duly executed and delivered by such Holder, and this Agreement is the valid and binding agreement of the Holder, enforceable against the Holder in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors&#146; rights and remedies generally and to general principles of equity. Holder </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">acknowledges and agrees that the provisions of this Agreement are enforceable against Holder, subject to the limitations referred to above, regardless of the
effect of this Agreement on persons not a party hereto. Holder may not sell, transfer or otherwise dispose of, in any manner (&#147;<U>Transfer</U>&#148;) any shares of Series P Preferred Stock without delivering to the Company the written consent
of the transferee binding the transferee to the terms and conditions of this Agreement and Holder shall indemnify the Company from and against any costs, expenses, liabilities, losses or damages of any other kind or nature arising from any Transfer
of Holder&#146;s shares of Series P Preferred Stock in contravention of this covenant. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(3) <U>Representations and Warranties</U>. Each
Holder represents and warrants, severally and not jointly, to the Company as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) <U>Access to Information</U>. Such Holder has
been provided with any and all documents describing the proposed transactions contemplated by this Agreement requested by such Holder, and has been provided access to officers of the Company and other members of its management to obtain any other
information deemed relevant to the Holder&#146;s decision whether or not to enter into this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) <U>Valid Title, etc.</U> With
respect to the Series P Preferred Stock such Holder beneficially owns (as defined in Rule 13d-3 of the Securities and Exchange Act of 1934 (each a &#147;<U>Share</U>&#148; and collectively, the &#147;<U>Shares</U>&#148;) there are no restrictions on
the rights of disposition pertaining thereto, except for any restrictions contemplated herein or arising under applicable securities laws, such Holder has exclusive power to vote, exclusive power of disposition and exclusive power to agree to all of
the matters set forth in this Agreement, in each case with respect to all of such Holder&#146;s Shares with no limitations, qualifications or restrictions on these rights. Each Holder represents that neither the Holder nor any of the Holder&#146;s
affiliates is party to or bound by any agreement with respect to the voting (by proxy or otherwise), sale or other disposition of the Shares (other than this Agreement). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(c) <U>Non-Contravention</U>. The execution and delivery of this Agreement by such Holder and the performance by such Holder of such Holder&#146;s obligations under this Agreement: (i)&nbsp;are within such
Holder&#146;s powers, have been duly authorized by all necessary action (including any consultation, approval or other action by or with any other person), (ii)&nbsp;require no action by or in respect of, or filing with, any governmental body,
agency, official or authority, and (iii)&nbsp;do not and will not contravene or constitute a default under, or give rise to a right of termination, cancellation or acceleration of any right or obligation of such Holder or to a loss of any material
benefit of such Holder under, any provision of applicable law or regulation or of any agreement, judgment, injunction, order, decree, or other instrument binding on him or result in the imposition of any lien on any asset of such Holder other than
any conflicts, breaches, violations, defaults, obligations, rights or losses that individually or in the aggregate would not: (x)&nbsp;impair the ability of such Holder to perform the Holder&#146;s obligations under this Agreement or
(y)&nbsp;prevent or delay the consummation of any of the transactions contemplated hereby. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) <U>Notices</U>. Any notices provided for in this Agreement shall be in writing and shall be either
personally delivered, sent by reputable overnight courier service, faxed or mailed by first class mail, return receipt requested, to the recipient at the address below indicated: </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><U>if to the Company</U>: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">One Morningside Drive </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Suite 200 </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Westport, CT 06880 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">Telecopy: (203)&nbsp;349-4198 </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Attention: Edward Stone </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2"><U>if to a Holder</U>: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">At the address for such Holder as set forth in the records of the Company. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">or such other address or to the attention of
such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent or mailed. </FONT></P> <P
STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(4) <U>Miscellaneous</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Each Holder
acknowledges and agrees that this Agreement constitutes a binding agreement of such Holder and that the Company may be irreparably damaged if for any reason such Holder fails to perform any of its obligations hereunder, and that the Company would
not have an adequate remedy at law for money damages in that event. Accordingly, the Company will be entitled to specific performance and injunctive and other equitable relief to enforce the performance of this Agreement by the Holders. This
provision is without prejudice to any other rights that the Company may have against any Holder for any failure to perform its respective obligations under this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(b) Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement
or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and
the same agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(d) This Agreement, together with any Exhibit hereto, embodies the complete agreement and understanding among the
parties concerning the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, with respect to the subject matter hereof. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(e) <U>Governing Law; Jurisdiction; Waiver of Jury Trial</U>. THE PROVISIONS OF THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (EXCLUDING ANY CONFLICT OF LAW RULE OR PRINCIPLE THAT WOULD REFER TO THE LAWS OF ANOTHER JURISDICTION). EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY
FEDERAL COURT LOCATED IN THE SOUTHERN DISTRICT OF THE STATE OF NEW YORK OR ANY NEW YORK STATE COURT, IN ANY ACTION OR PROCEEDING THAT IS OTHERWISE PERMITTED UNDER THIS AGREEMENT OR ANY OTHER AGREEMENT EXECUTED IN CONNECTION WITH THIS AGREEMENT, AND
EACH PARTY HERETO HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MUST BE BROUGHT AND/OR DEFENDED IN SUCH COURT. EACH PARTY HERETO HEREBY CONSENTS TO SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY THE APPLICABLE
LAW OF THE FORUM IN ANY ACTION BROUGHT UNDER OR ARISING OUT OF THIS AGREEMENT, AND EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT EFFECTIVELY, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT. EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING HEREUNDER. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(f) This Agreement shall be binding upon and inure solely to the benefit of: (i)&nbsp;each party hereto, (ii)&nbsp;the Series Q Purchasers,
(iii)&nbsp;the Senior Note Investors, and (iv)&nbsp;all other proposed recipients of the Company&#146;s securities identified herein, together with the respective successors, assigns and transferees of each of the above, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(g) <U>Confidentiality</U>. Each Holder acknowledges that this Agreement and its terms, until otherwise disclosed by the Company are confidential
information and that the Holder has received and will continue to receive additional confidential information regarding the Company. Accordingly, the Holders agree to use their reasonable efforts to prevent the unauthorized disclosure of any
confidential information concerning the Company that has been or is disclosed to it or its agents in connection with the entry of the parties in to this Agreement and the transactions contemplated hereby. Notwithstanding the foregoing, any Holder
may make confidential information available to the Holder&#146;s counsel, accountants and financial advisors; <U>provided</U>, <U>however</U>, the disclosing Holder shall remain liable to the Company and all other parties hereto damaged by any
unauthorized disclosure by the Holder&#146;s representative. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(h) The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(i) All costs and expenses
incurred in connection with this Agreement will be paid by the party incurring such cost or expense. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(j) No amendment, modification or
waiver shall be binding or effective with respect to any provision hereof without the prior written consent of the holders of at least a majority of the Series P Preferred Stock outstanding at the time such action is taken. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">* * * </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">[SIGNATURE PAGES FOLLOW] </FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">IN WITNESS WHEREOF, the undersigned have executed this Consent, Amendment and Waiver Agreement as of the
dates indicated below. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="6%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="93%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2">VELOCITY EXPRESS CORPORATION</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Its:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
</TABLE></DIV> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD WIDTH="12%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="87%"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3"> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000">&nbsp;</P></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Name:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Title:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
<TR>
<TD VALIGN="top"><FONT FACE="Times New Roman" SIZE="2">Date:</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"></TD></TR>
</TABLE></DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2">EXHIBIT A </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2">AMENDMENTS TO CERTIFICATE OF DESIGNATIONS, RIGHTS AND PREFERENCES </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">OF SERIES P CONVERTIBLE PREFERRED STOCK
</FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Sections 2 and 3 of the Certificate of Designations, Rights and Preferences of Series P Convertible Preferred Stock set forth in the
Certificate of Incorporation, as amended, is hereby amended by deleting Sections 2 and 3 in their entirety and replacing them with the following (<I><U>changes from the current Certificate are marked</U></I>): </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">2. <U>Dividends</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(a) Each Holder of
Series P Preferred Stock, in preference and priority to the Holders of all other classes of stock other than Holders of the Company&#146;s Series M Convertible Preferred Stock (the &#147;Series M Preferred&#148;) and the Series Q Convertible
Preferred Stock (the &#147;Series Q Preferred&#148;), shall be entitled to receive, with respect to each share of Series P Preferred Stock then outstanding and held by such Holder of Series P Preferred Stock, dividends, commencing from the date of
issuance of such share of Series P Preferred Stock, at the rate of eight percent (8%)&nbsp;per annum of the Series P Stated Value (the &#147;Series P Preferred Dividends&#148;); provided, however, that from and after the Company&#146;s issuance of
not less than 36,000,000 shares of Series Q Preferred, the Series P Preferred dividend rate shall be reduced to six percent (6%)&nbsp;per annum. The Series P Preferred Dividends shall be cumulative, whether or not earned or declared, and shall be
paid quarterly in arrears on the first day of February, May, August and November in each year. At the election of the Company, the Series P Preferred Dividends shall be paid by (a)&nbsp;issuing each Holder of Series P Preferred Stock such number of
shares of Series P Preferred Stock equal to the Series P Preferred Dividend divided by the Series P Stated Value (&#147;PIK Shares&#148;), or (b)&nbsp;cash out of legally available funds therefor. Any election by the Company to pay dividends in
shares of Series P Preferred Stock or cash shall be made uniformly with respect to all outstanding shares of Series P Preferred Stock for a given dividend period. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
FACE="Times New Roman" SIZE="2">(b) No dividends shall be paid on any Common Stock of the Company or any other capital stock of the Company other than the Series M Preferred and the Series Q Preferred during any fiscal year of the Company until all
outstanding Series P Preferred Dividends (with respect to the current fiscal year and all prior fiscal years) shall have been paid or declared and set apart for payment to the Holders of Series P Preferred Stock. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT FACE="Times New Roman" SIZE="2">(c) In the event that the Company shall at any time pay a dividend on the Common Stock or any other class or series of capital stock of the Company other
than the Series M Preferred and the Series Q Preferred, the Company shall, at the same time, pay to each Holder of Series P Preferred Stock a dividend equal to the dividend that would have been payable to such Holder if the shares of Series P
Preferred Stock held by such Holder had been converted into Common Stock on the date of determination of Holders of Common Stock entitled to receive such dividends. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">3. <U>Liquidation; Redemption</U>. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the Holders of the shares of Series P Preferred Stock shall rank (i)&nbsp;senior to
the Holders of the Common Stock and the Company&#146;s Series N </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-1 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <P STYLE="margin-top:0px;margin-bottom:0px">
<FONT FACE="Times New Roman" SIZE="2">Convertible Preferred Stock and Series O Convertible Preferred, (ii)&nbsp;junior to the Holders of Series Q Preferred, and (iii)&nbsp;on parity with the
Holders of the Series M Preferred, as to such distributions, and shall be entitled to be paid an amount per share equal to the Series P Stated Value plus any accrued and unpaid Series P Preferred Dividends (the &#147;Liquidation Preference&#148;).
No modification of this Liquidation Preference shall be made without the prior written approval of at least 62.5% of the then outstanding Series P Preferred. If upon such liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, the assets to be distributed among the Holders of the Series P Preferred Stock and any class or Series P capital stock ranking on a parity with the Series P Preferred Stock as to such distributions shall be insufficient to permit
payment to the Holders of the Series P Preferred Stock and any such class or series of capital stock of their respective liquidation amount, then the entire assets of the Company to be distributed shall be distributed pro rata to the Holders of
Series P Preferred Stock and the Holders of such class or series of capital stock ranking on a parity with the Series P Preferred Stock as to such distributions according to the preferential amounts due thereon. </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The definition of the term &#147;Excluded Stock&#148; appearing in Section&nbsp;1 of the Certificate of Designations, Rights and Preferences of Series P
Convertible Preferred Stock set forth in the Certificate of Incorporation, as amended, is hereby amended by replacing the word &#147;and&#148; which precedes &#147;(C)&#148; with a comma &#147;,&#148; and inserting at the end of the sentence:
&#147;and (D)&nbsp;any issuance of shares of Series M, N, O or Q Convertible Preferred Stock, including without limitation any issuance in payment of dividends with respect to the same series of preferred stock.&#148; </FONT></P> <P
STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The defined term &#147;Event of Default&#148; and the definition of such term appearing thereafter in Section&nbsp;1 of the Certificate of Designations,
Rights and Preferences of Series P Convertible Preferred Stock, together with Section&nbsp;4(c) thereof are hereby stricken in their entirety. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">A-2 </FONT></P>

</BODY></HTML>
</TEXT>
</DOCUMENT>
</SUBMISSION>
