Exhibit 10.38
THIRTEENTH AMENDMENT AND
WAIVER
THIRTEENTH AMENDMENT AND WAIVER
(this “ Agreement ”), dated as of
February 17, 2009, to the Credit Agreement, dated as of
December 22, 2006 (as amended, restated, supplemented or
otherwise modified from time to time, including all schedules
thereto, the “ Credit Agreement ”), by and among
the lenders identified on the signature pages thereof (such
lenders, together with their respective successors and permitted
assigns, are referred to hereinafter each individually as a “
Lender ” and collectively as the “
Lenders ”), Wells Fargo Foothill, Inc . , a
California corporation, as the arranger and administrative agent
for the Lenders (in such capacity, together with its successors and
assigns in such capacity, the “ Agent ”),
Velocity Express Corporation, a Delaware corporation (the “
Parent ”), each of the Parent’s Subsidiaries
identified on the signature pages thereof as a Borrower (such
Subsidiaries are referred to hereinafter each individually as a
“ Borrower ”, and individually and collectively,
jointly and severally, as the “ Borrowers ”),
and each of Parent’s Subsidiaries identified on the signature
pages thereof as a Guarantor (such Subsidiaries, together with the
Parent, are referred to hereinafter each individually as a “
Guarantor ”, and individually and collectively,
jointly and severally, as the “ Guarantors ”).
Capitalized terms used in this Agreement and not defined herein
shall have the applicable meanings given to such terms in the
Credit Agreement.
WITNESSETH:
WHEREAS, one or more Events of
Default have occurred and are continuing under
Section 7.2(a) of the Credit Agreement as a result of
the noncompliance by the Parent and its Subsidiaries with
(a) the minimum EBITDA covenant set forth in
Section 6.16(a) of the Credit Agreement for
(i) the six (6) month period ending October 31,
2008, (ii) the seven (7) month period ending
November 30, 2008, and (iii) the eight (8) month
period ending on December 31, 2008, and (b) the driver
pay covenant set forth in Section 6.16(c) of the Credit
Agreement for the three week periods ending October 17,
2008, November 14, 2008 and December 12, 2008
(collectively, the “ Specified Defaults
”).
WHEREAS, the Borrowers have
requested that the Agent and the Required Lenders agree and,
subject to the terms and conditions of this Agreement, the Agent
and the Required Lenders have agreed to waive the Specified
Defaults commencing on the Amendment Effective Date (as defined
below).
NOW, THEREFORE, the Agent, the
Required Lenders and the Loan Parties hereby agree as
follows:
1. Loan Parties
Acknowledgments . The Loan Parties hereby acknowledge, confirm
and agree that:
(a) As of the close of business on
February 13, 2009, (i) the aggregate outstanding
principal amount of the Advances (not including amounts accrued but
not yet charged to the Loan Account) is $6,125,939.29 and the
aggregate stated amount of all outstanding Letters of Credit is
$2,694,891.00, and (ii) the Borrowers are
unconditionally
indebted and liable for the repayment in full of
the outstanding principal amount of all Advances, all contingent
reimbursement obligations with respect to outstanding Letters of
Credit and all other Obligations, including, without limitation,
the Applicable Prepayment Premium, the fees set forth in the Fee
Letter and the reasonable out of pocket fees and expenses of legal
counsel to the Agent, without offset, defense or counterclaim of
any kind, nature or description.
(b) All Obligations are secured by
valid, enforceable and perfected first priority Liens (except as
otherwise expressly provided in the Loan Documents) in all of the
Collateral, which Liens are enforceable without offset, defense or
counterclaim.
(c) (i) Each of the Loan
Documents to which the Loan Parties are a party has been duly
executed and delivered to the Agent and each is in full force and
effect as of the date hereof, (ii) the agreements and
obligations of the Loan Parties contained in the Loan Documents to
which they are a party constitute the legal, valid and binding
obligations of the Loan Parties, enforceable against them in
accordance with their terms, and the Loan Parties have no offset,
defense or counterclaim to the enforcement of such Obligations, and
(iii) the Agent and the other members of the Lender Group are
and shall be entitled to the rights, remedies and benefits provided
for in the Loan Documents, subject to the terms of this
Agreement.
(d) The Agent’s and the
Lenders’ execution of this Agreement shall not constitute a
novation, refinancing, discharge, extinguishment or refunding nor
is it to be construed as a release, waiver or modification of any
of the terms, conditions, representations, warranties, covenants,
rights or remedies set forth in the Credit Agreement or any of the
other Loan Documents, except as expressly provided
herein.
(e) (i) Neither the Loan Parties nor
any of their Subsidiaries or Affiliates has any claim or cause of
action against the Agent, any Agent-Related Person, any Lender or
any Lender-Related Person (or any of the directors, officers,
employees, agents, Affiliates or attorneys of the foregoing), and
(ii) the Lender Group has heretofore properly performed and
satisfied in a timely manner all of its obligations to the Loan
Parties and all of their Subsidiaries and Affiliates (if any) under
the Credit Agreement and the other Loan Documents. Notwithstanding
the foregoing, Loan Parties wish (and the Agent and Lenders agree)
to eliminate any possibility that any past conditions, acts,
omissions, events or circumstances would impair or otherwise
adversely affect the Agent or any Lenders’ rights, interests,
security and/or remedies under the Credit Agreement and the other
Loan Documents. Accordingly, for and in consideration of the
agreements contained in this Agreement and other good and valuable
consideration, the Loan Parties for themselves and their Affiliates
and the successors, assigns, heirs and representatives of each of
the foregoing) (collectively, the “ Releasors ”)
does hereby fully, finally, unconditionally and irrevocably
release, waive and forever discharge the Agent, any Agent-Related
Person, any Lender or any Lender-Related Person, together with
their respective successors, assigns, subsidiaries, affiliates,
agents and attorneys (collectively, the “ Released
Parties ”) from: (x) any and all liabilities,
obligations, duties, responsibilities, promises or indebtedness of
any kind of the Released Parties to the Releasors or any of them
and (y) all claims, demands, disputes, offsets, causes of
action (whether at law or equity), suits or defenses of any kind
whatsoever (if any), which the Releasors or any of them had from
the beginning of the world, now has or might hereafter have against
the Released Parties or any of them, in either case of clauses
(x) or (y) on account of any condition, act,
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omission, event, contract, liability,
obligation, indebtedness, claim, cause of action, defense,
circumstance or matter of any kind (1) that existed, arose or
occurred at any time from the beginning of the world to the
execution of this Agreement or (2) that could hereafter arise
as a result, directly or indirectly, of the execution of (or the
observance of the terms of) this Agreement, the Credit Agreement or
any of the other Loan Documents. For purposes of the release
contained in this clause (e), any reference to any Releasor shall
mean and include, as applicable, such Person’s successors and
assigns, including, without limitation, any receiver, trustee or
debtor-in-possession, acting on behalf of such Person. As to each
and every claim released hereunder, the Loan Parties hereby
represent that they have received the advice of legal counsel with
regard to the releases contained herein and agrees that no such
common law or statutory rule or principle shall affect the validity
or scope or any other aspect of such release.
2. Amendment . The Loan
Parties, the Lenders and the Agent wish to amend the Credit
Agreement. Accordingly, on the Amendment Effective Date, the
parties hereto hereby agree as follows:
(a) Section 6.16 of the
Credit Agreement is hereby amended by adding the following new
subsection (d) to read as follows:
“(d) Liquidity
Test . At all times during the period from
(i) February 17, 2009 through and including
February 27, 2009, the Loan Parties shall have at least
$2,400,000 of Excess Availability plus Qualified Cash and
(ii) February 28, 2009 and at all times thereafter, the
Loan Parties shall have at least $2,700,000 of Excess Availability
plus Qualified Cash.”
3. Waiver .
(a) Pursuant to the request of the
Loan Parties and in accordance with Section 14.1 of the
Credit Agreement, the Agent and Required Lenders hereby waive the
Specified Defaults.
(b) The waiver in this
Section 3 shall be effective only for the Specified Defaults
and does not allow for any other or further departure from the
terms and conditions of the Credit Agreement or any other Loan
Document, which terms and conditions shall otherwise continue in
full force and effect.
4. No Waiver; Reservation of
Rights . The Agent and the Lenders have not waived, are not by
this Agreement waiving, and have no present intention of waiving
any Events of Default (other than the Specified Defaults) which may
be continuing on the date hereof or any Events of Default which may
occur after the date hereof (whether the same or similar to the
Specified Defaults or otherwise), and nothing contained herein
shall be deemed or constitute any such waiver. The Lender Group
reserves the right, in its discretion, to exercise any or all
rights or remedies under the Credit Agreement, the other Loan
Documents, applicable law and otherwise (including, without
limitation, any rights afforded to the Agent and Lenders under the
Intercreditor Agreement) as a result of any other Events of Default
that may be continuing on the date hereof or any Events of Default
that may occur after the date hereof, and the Agent and the Lenders
have not waived any of such rights or remedies and nothing in this
Agreement, and no delay on the Agent’s and the Lenders’
part in exercising such rights or remedies, should be
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construed as a waiver of any such rights or
remedies. Each member of the Lender Group reserves the right to
request any additional information (financial or otherwise) with
respect to the Specified Defaults or any other Event of Default or
otherwise.
5. Reaffirmation of Guaranty;
Agreement as Loan Docum
