LIMITED WAIVER AND AGREEMENT

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Section 1.                          Definitions; References.

 

(a)            Unless otherwise defined in this Waiver, each term used in this Waiver that is defined in the Credit Agreement has the meaning assigned to such term in the Credit Agreement.

 

(b)            As used herein, the following terms have the following meanings:

 

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Section 2.                          Waiver & Agreements.

 

(a)            The Lenders hereby waive the Subject Defaults; PROVIDED THAT SUCH WAIVER OF THE SUBJECT DEFAULTS SHALL AUTOMATICALLY EXPIRE AT 5:00 p.m. EASTERN TIME ON THE LIMITED WAIVER EXPIRATION DATE.  On and after the Limited Waiver Expiration Date, the Subject Defaults shall constitute Events of Default under the Credit Agreement unless and until the Required Lenders and Required Revolving Credit Lenders, in their sole discretion, enter into a permanent waiver of the Subject Defaults.  This waiver is limited to the extent described herein and shall not be construed to be a waiver of any other terms, provisions, covenants, warranties or agreements contained in the Credit Agreement or any of the Loan Documents or a waiver of any Default or Event of Default that may have occurred or may hereafter occur (other than the foregoing waiver of the Subject Defaults until the Limited Waiver Expiration Date).  Without limiting the foregoing, failure to observe or perform any agreement contained in Section 7.11(a), Section 7.11(b) or Section 7.11(c) of the Credit Agreement shall constitute a Default and Event of Default. The Administrative Agent and the Lenders reserve the right to exercise any rights and remedies available to them in connection with (a) any present or future defaults under the Credit Agreement or any other provision of any Loan Document other than the Subject Defaults, and (b) the Subject Defaults after the Limited Waiver Expiration Date.

 

(b)            The Administrative Agent, the Lenders and the Borrower hereby agree that from and including the date of this Waiver and through and including the Limited Waiver Expiration Date, (i) the Borrower shall not be entitled to, and shall not, request any Credit Extension (A) if, after giving effect to such Credit Extension, the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations would exceed $107,940,000 on or before August 30, 2014 (and thereafter, the amount of the Revolving Credit Facility), and (B) unless the Borrower has delivered to the Administrative Agent the Required Borrowing Certificate, (ii) all Letter of Credit Fees and all interest on the principal amount of all Obligations outstanding under the Credit Agreement shall, in each case, accrue at the Default Rate, (iii) no Revolving Credit Loans may be requested as, converted to or continued as Eurodollar Rate Loans, and (iv) the Borrower shall not be entitled to defer any payment required by Section 2.06 pursuant to Section 2.06(e)(i) or Section 2.06(e)(ii).

 

(c)            From and after the date immediately following the Limited Waiver Expiration Date, (i) the Required Revolving Credit Lenders hereby request pursuant to Section 2.03(h) of the Credit Agreement, and the Borrower hereby acknowledges and agrees, that all Letter of Credit Fees shall accrue at the Default Rate while any of the Subject Defaults exists, (ii) the Required Lenders hereby request pursuant to Section 2.09(b)(iii) of the Credit Agreement, and the Borrower hereby acknowledges and agrees, that all interest on the principal amount of all Obligations outstanding under the Credit Agreement shall accrue at the Default Rate while any of the Subject Defaults exists, and (iii) the Required Revolving Credit Lenders hereby declare in accordance with Section 2.02(c) of the Credit Agreement, and the Borrower hereby acknowledges and agrees, that no Revolving Credit Loans may be requested as, converted to or continued as Eurodollar Rate Loans while any of the Subject Defaults exists.

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(d)            The Borrower hereby agrees that it will not permit the aggregate actual Domestic Cash Outflows of the Loan Parties to exceed:

 

(i)            during the Calendar Week ending August 10, 2014, 120% of the Domestic Cash Outflows set forth on the Cash Flow Forecast for such Calendar Week, plus $5,300,000, which represents the one week favorable spending variance reported to the Lenders for the week ended August 3, 2014 (the "$5.3 million Favorable Spending Variance");

 

(ii)            during the two Calendar Week period ending August 17, 2014, 120% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014 and August 17, 2014, plus the $5.3 million Favorable Spending Variance;

 

(iii)            during the three Calendar Week period ending August 24, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014 and August 24, 2014, plus the $5.3 million Favorable Spending Variance;

 

(iv)            during the four Calendar Week period ending August 31, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014, August 24, 2014 and August 31, 2014, plus the $5.3 million Favorable Spending Variance;

 

(v)            during the five Calendar Week period ending September 7, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014, August 24, 2014, August 31, 2014 and September 7, 2014, plus the $5.3 million Favorable Spending Variance;

 

(vi)            during the six Calendar Week period ending September 14, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014, August 24, 2014, August 31, 2014, September 7, 2014 and September 14, 2014, plus the $5.3 million Favorable Spending Variance;

 

(vii)            during the seven Calendar Week period ending September 21, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014, August 24, 2014, August 31, 2014, September 7, 2014, September 14, 2014 and September 21, 2014, plus the $5.3 million Favorable Spending Variance; and

 

(viii)            during the eight Calendar Week period ending September 28, 2014, 115% of the aggregate Domestic Cash Outflows set forth on the Cash Flow Forecast for the Calendar Weeks ending August 10, 2014, August 17, 2014, August 24, 2014, August 31, 2014, September 7, 2014, September 14, 2014, September 21, 2014 and September 28, 2014, plus the $5.3 million Favorable Spending Variance.

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(e)            On Tuesday of each Calendar Week, beginning on August 12, 2014 and continuing through the Limited Waiver Expiration Date, the Borrower shall provide to the Administrative Agent and the Lenders (i) a variance analysis of actual Domestic Cash Outflows from the date of this Waiver through and including the immediately preceding Monday versus the Domestic Cash Outflows set forth in the Cash Flow Forecast for such period demonstrating compliance with Section 2(d) above, and (ii) a comparison of actual Cash Inflows and actual Cash Outflows for the immediately preceding Calendar Week versus the Cash Inflows and Cash Outflows set forth in the Cash Flow Forecast for such Calendar Week.

 

(f)            On Friday of each Calendar Week, beginning on August 8, 2014 and continuing through the Limited Waiver Expiration Date, the Borrower shall provide to the Administrative Agent and the Lenders a cash flow forecast for the thirteen week period beginning on the following Monday, which cash flow forecast shall be in a form substantially similar to the Cash Flow Forecast.

 

(g)            (i) If, at the end of any two consecutive Business Days, the aggregate Cash Balance in the Domestic Accounts exceeds $3,000,000 on each of such Business Days, then on the next Business Day, the Borrower shall prepay (or cause to be prepaid) Revolving Credit Loans, Swing Line Loans or Cash Collateralize the L/C Obligations, or any combination of the foregoing, in an aggregate amount equal to such excess.  (ii) If, at the end of any Business Day, the aggregate Cash Balance in the Foreign Accounts exceeds $2,000,000, then on the next Business Day, the Borrower shall cause such excess to be transferred to one or more Domestic Accounts of a Loan Party.   At the request of the Administrative Agent, the Borrower shall provide evidence reasonably satisfactory to the Administrative Agent of its compliance with this Section 2(g).

 

(h)            On or before August 27, 2014 (the "Required Commitment Letter Date"), the Borrower shall deliver to the Administrative Agent a commitment letter or letters duly executed by one or more institutions satisfactory to the Administrative Agent and the Required Lenders in their sole discretion and otherwise in form and substance satisfactory to the Administrative Agent and the Required Lenders in their sole discretion (collectively, the "Commitment Letter"), which Commitment Letter shall commit such financial institutions to, on or before September 30, 2014, either (i) provide one or more credit facilities that will cause (A) termination of the Aggregate Commitments, (B) payment in full (at par) of all Obligations (other than contingent indemnification Obligations and any Obligations under any Secured Cash Management Agreement or Secured Hedge Agreement which are not then due and payable), (C) expiration, termination or cash collateralization (in a manner satisfactory to the L/C Issuer in its sole discretion) of all Letters of Credit, and (D) termination of the Loan Documents; or (ii) (A) purchase (at par) all of the Lenders' rights and obligations in their respective capacities as Lenders under the Credit Agreement and any other documents or instruments delivered pursuant thereto (including, without limitation, all such rights and obligations in respect of the Revolving Credit Facility and the Letters of Credit and the Swing Line Loans included in such Revolving Credit Facility), pursuant to documentation in form and substance satisfactory to the Administrative Agent and the Required Lenders in their sole discretion, including by cash collateralizing (in a manner satisfactory to the L/C Issuer in its sole discretion) or replacing all Letters of Credit outstanding on such date, and (B) replace Bank of America, in its capacities as Administrative Agent, Swing Line Lender and L/C Issuer under the Credit Agreement, pursuant to documentation in form and substance satisfactory to Bank of America in its sole discretion (the consummation the items described in either of the foregoing clauses (i) or (ii) being referred to herein as the "Total Payoff").  If the Borrower fails to (i) deliver to the Administrative Agent the Commitment Letter required by this Section 2(h) (as determined by the Administrative Agent) on or before the Required Commitment Letter Date, or (ii) pay the fees and expenses of counsel and the financial advisors to the Administrative Agent in connection with this Waiver and the other Loan Documents (including the estimated fees and expenses of such counsel and financial advisors through and including September 30, 2014 (or such other date as may be agreed by the Administrative Agent)) on or before 5:00 p.m. Eastern Time September 2, 2014 (the "Required Payment Deadline"), then from and after the Required Payment Deadline, the Limited Waiver Expiration Date shall automatically be September 2, 2014 instead of September 30, 2014.

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(i)            In consideration for the Lenders entering into this Waiver, the Borrower shall pay to Bank of America (for the pro rata benefit of the Lenders), a fee equal to $1,250,000, which fee shall be (A) fully earned on the date of this Waiver, (B) payable on the Limited Waiver Expiration Date and (C) non-refundable for any reason whatsoever; provided, however, that: (1) if the Borrower delivers to the Administrative Agent the Commitment Letter required by Section 2(h) above (as determined by the Administrative Agent) on or before the Required Commitment Letter Date, such fee shall be reduced by $750,000, and (2) if the Total Payoff is consummated on or before September 30, 2014, such fee shall be reduced by $500,000.

 

(j)            From and after the date of this Waiver, for each Loan, the last Business Day of each month shall be an additional "Interest Payment Date" under and as defined in the Credit Agreement.

 

(k)            Unless prohibited by applicable law (or contrary to duties imposed thereunder) or the Loan Parties' material Contractual Obligations as in effect on the date of Waiver, before entering into discussions with any Person regarding the provision of any financing or the granting of any Lien, in either case, that would be superior to the Obligations or the Liens securing the Obligations, the Borrower agrees that it will first discuss its interest in obtaining such financing and/or granting of Liens with the Administrative Agent and the Lenders and offer the Lenders the opportunity to provide such financing.  The Loan Parties hereby represent that, as of the date of this Waiver, they are not party to any material Contractual Obligations that would prohibit them from complying with the foregoing sentence.

 

(l)            The parties hereto agree that the "Limited Waiver Expiration Date" under and as defined in that certain Limited Waiver and Agreement dated as of July 28, 2014 among the Borrower, the Subsidiary Guarantors, the Administrative Agent and the Lenders party thereto, shall be deemed to be the date of this Waiver.

 

Section 3.                          Representations and Warranties.  The Borrower represents and warrants that (a) the execution, delivery, and performance of this Waiver by each Loan Party are within the corporate or equivalent power and authority of such Loan Party and have been duly authorized by all necessary corporate or other organizational action, (b) this Waiver and the Credit Agreement constitute legal, valid, and binding obligations of each Loan Party that is a party hereto or thereto, enforceable against such Loan Party in accordance with their terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws of general applicability affecting the enforcement of creditors' rights and the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law); (c) after giving effect to this Waiver and the Second Lien Waiver (as defined below), the representations and warranties of the Borrower and each other Loan Party contained in the Credit Agreement and in each Loan Document are true and correct in all material respects as of the date of this Waiver, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date; (d)  after giving effect to this Waiver and the Second Lien Waiver, no Default or Event of Default exists under the Loan Documents; (e) the Liens under the Security Documents are valid and subsisting and secure the Obligations; and (f) as of the date of this Waiver and before giving effect to any Credit Extension made on such date, (i) the Outstanding Amount of the Revolving Credit Loans is $102,500,000.00, and (ii) the Outstanding Amount of the L/C Obligations is $440,000.00.

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Section 4.                          Effect on Loan Documents.  Except as expressly modified hereby, the Credit Agreement and all other Loan Documents remain in full force and effect as originally executed.  Except as expressly provided in Section 2(a) hereof, nothing herein shall act as a waiver of any of the Administrative Agent's or any Lender's rights under the Loan Documents, including the waiver of any Default or Event of Default, however denominated.  The Borrower acknowledges and agrees that this Waiver shall in no manner impair or affect the validity or enforceability of the Credit Agreement.  This Waiver is a Loan Document for the purposes of the provisions of the other Loan Documents.  Without limiting the foregoing, any breach of representations, warranties, and covenants under this Waiver may be a Default or Event of Default under the other Loan Documents.

 

Section 5.                          Effectiveness.  This Waiver shall become effective upon the satisfaction of the following conditions:

 

(a)            the Administrative Agent (or its counsel) shall have received counterparts hereof duly executed and delivered by a duly authorized officer of the Borrower, each Subsidiary Guarantor, and by each of the Required Lenders and the Required Revolving Credit Lenders;

 

(b)            the Administrative Agent (or its counsel) shall have received a waiver (the "Second Lien Waiver") executed and delivered by the appropriate parties under the Second Lien Credit Agreement, which waiver (i) waives (through and including the Limited Waiver Expiration Date) any default or event of default under Section 8.01(b) of the Second Lien Credit Agreement resulting from the Borrower's failure to comply with Section 7.11(a), Section 7.11(c) and Section 7.11(d) of the Second Lien Credit Agreement, (ii) waives (through and including the Limited Waiver Expiration Date) any default or event of default under Section 8.01(e) of the Second Lien Credit Agreement resulting from the existence of the Financial Covenant Defaults, (iii) waives (through and including the Limited Waiver Expiration Date) any restriction due to the application of Section 7.20 of the Second Lien Credit Agreement on the Borrower's ability to request Credit Extensions, so long as, after giving effect to any such Credit Extension, the aggregate Outstanding Amount of all Revolving Credit Loans, Swing Line Loans and L/C Obligations would not exceed $107,940,000 on or before August 30, 2014 (and thereafter, the amount of the Revolving Credit Facility), (iv) includes a consent by the appropriate parties under the Second Lien Credit Agreement and the Intercreditor Agreement to the prepayments required by Section 2(g)(i) above, and (v) is otherwise in form and substance satisfactory to the Administrative Agent;  and

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(c)            the Borrower shall have paid the fees and expenses of counsel and the financial advisors to the Administrative Agent in connection with this Waiver and the other Loan Documents (including the estimated fees and expenses of such counsel and financial advisors through and including September 2, 2014).

 

Section 6.                          Reaffirmation of Subsidiary Guaranty and Security Documents.  By its signature hereto, each Subsidiary Guarantor represents and warrants that (a) such Subsidiary Guarantor has no defense to the enforcement of the Subsidiary Guaranty, and that according to its terms the Subsidiary Guaranty will continue in full force and effect to guaranty the Borrower's obligations under the Credit Agreement and the other amounts described in the Subsidiary Guaranty following the execution of this Waiver and (b) the Liens created under the Security Documents to which such Subsidiary Guarantor is a party are valid and subsisting and will continue in full force and effect to secure the Borrower's obligations under the Credit Agreement and the other amounts described in such Security Documents following the execution of this Waiver.

 

Section 7.                          Governing Law.  THIS WAIVER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Section 8.                          Miscellaneous.  The miscellaneous provisions set forth in Article X of the Credit Agreement apply to this Waiver.  This Waiver may be signed in any number of counterparts, each of which shall be an original, and may be executed and delivered electronically or by telecopier.

 

Section 9.                          No Actions, Claims, Etc.  As of the date hereof, each Loan Party acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages or liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the L/C Issuer, the Swing Line Lender or any Lender or any of their respective Related Parties, in any case, arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement or any other Loan Document on or prior to the date of this Waiver.

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Section 10.                      General Release.  In consideration of the Administrative Agent's and the Lenders' willingness to enter into this Waiver, each Loan Party hereby releases and forever discharges the Administrative Agent, the L/C Issuer, the Swing Line Lender and each Lender and each of their respective Related Parties (all of the above, collectively, the "Lender Group"), from any and all claims, counterclaims, demands, damages, debts, suits, liabilities, actions and causes of action of any nature whatsoever, including, without limitation, all claims, demands and causes of action for contribution and indemnity, whether arising at law or in equity, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted (all of the above, collectively, "Claims"), that existed, arose or occurred at any time on or before the date of this Waiver, which any Loan Party may have or claim to have against any of the Lender Group in any way related to or connected with the Loan Documents or the transactions contemplated thereby.

 

Section 11.                      Further Assurances.  The Borrower agrees promptly to take such action, upon the request of any Lender or the Administrative Agent, as is necessary to carry out the intent of this Waiver.

 

Section 12.                   ENTIRE AGREEMENT.  THIS WAIVER AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

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