WAIVER

Exhibit 10.36

WAIVER

WAIVER (this “ Agreement ”), dated as of October 14, 2008, 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)  Section 5.3 of the Credit Agreement as a result of the Loan Parties failure to deliver consolidated and consolidating financial statements of the Parent and its Subsidiaries for the 2008 fiscal year without a “going concern” qualification from an independent certified public accountant and (b) the driver pay covenant set forth in Section 6.16(c) of the Credit Agreement for the three week periods ending May 16, 2008, June 13, 2008, July 11, 2008, August 15, 2008 and September 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 Waiver 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 October 13, 2008, (i) the aggregate outstanding principal amount of the Advances (not including amounts accrued but not yet charged to the Loan Account) is $7,867,778.00 and the aggregate stated amount of all outstanding Letters of Credit is $2,743,651.00, 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 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, 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. 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 2 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 otherw