WAIVER AGREEMENT AND SEVENTH AMENDMENT TO CREDIT AGREEMENT

WHEREAS, Borrowers are indebted to Lenders on account of various loans and advances extended by one or more Lenders to Borrowers  (collectively, the “Loans”) pursuant to the Credit Agreement and other Loan Documents (as defined in the Credit Agreement), including, without limitation, each of the following executed by one or more Borrowers and dated September 6, 2007: (i) the Security Agreement; (ii) Open-End Mortgage and Security Agreement; (iii) Open-End Fee and Leasehold Mortgage and Security Agreement; and (iv) other Collateral Documents (as defined in the Credit Agreement); and

WHEREAS, that certain Intercreditor and Collateral Sharing Agreement (as amended and restated on or about the date hereof and as the same may be further amended, restated, modified and/or supplemented from time to time, the “Intercreditor Agreement”), dated September 6, 2007, by and among the Borrowers, Agent (on its own behalf and in its capacity as agent for the Lenders), MELF and PIDC, sets forth the respective priorities, rights and remedies with respect to payment of Borrowers’ respective obligations to Lenders, MELF and PIDC, and with respect to the Collateral; and

WHEREAS, in December 2010, Borrowers further informed Agent that, as of December 25, 2010, they did not expect to be in compliance with certain financial covenants tested as at December 25, 2010 set forth in Section 6.12 of the Credit Agreement as more particularly identified on Schedule 1 hereto (collectively with the Payment Default, but specifically excluding any defaults that may now or hereafter exist under Section 6.12 (as amended hereby) with respect to any periods other than the period ending December 25, 2010, the “Specified Defaults”, and each a “Specified Default”); and

WHEREAS, the Commitment to make Working Capital Loans (of which the Swing Line Loan facility is a subfacility) was to be reduced from $35,000,000 to $34,000,000 on December 31, 2010 and, in December 2010, the Borrowers requested that the Lenders agree to postpone the reduction until January 14, 2011; and

WHEREAS, pursuant to the Waiver Agreement and Sixth Amendment to Credit Agreement, dated December 31, 2010 (the “Sixth Amendment”), the Lenders, among other things, waived the Specified Defaults to the extent such Specified Defaults existed prior to January 15, 2011 (but not to the extent such Specified Defaults continued to exist on or after January 15, 2011), and delayed to January 14, 2011 the reduction of the Commitment to make Working Capital Loans, all subject to terms and conditions set forth in the Sixth Amendment, in order to allow Borrowers to pursue a strategy to pay in full in cash and satisfy Borrowers’ financial obligations to Lenders under the Credit Agreement and other Loan Documents; and

WHEREAS, the Q1 Budget, required by Section 9(h) hereof, has been delivered by the Borrowers on behalf of the Borrowers to Lenders, and Lenders acknowledge that the Q1 Budget is in form and substance acceptable to Lenders.

NOW THEREFORE, in consideration of the promises and mutual covenants contained herein, and the foregoing recitals being fully incorporated as if set forth below, the parties hereto hereby agree, effective as of the Effective Date (as defined below), as follows:

holds valid and perfected first-priority security interests in and against, inter alia, the Collateral, which Collateral constitutes all of the Borrowers’ assets.  Borrowers hereby reaffirm and confirm their grant to Agent and Lenders of a security interest and lien in and against all of Borrowers’ assets, including, without limitation, all fee, leasehold and other interests in real property, and tangible and intangible personal property, including but not limited to all accounts, equipment, goods, inventory, investment property and general intangibles (including, without limitation, all patents, trademarks and copyrights), whether now owned or hereafter acquired, and the cash and non-cash proceeds thereof, as such terms are defined under the Uniform Commercial Code, as adopted by the Commonwealth of Pennsylvania.  Borrowers previously agreed, and by this Agreement, reaffirm their agreement, to deliver and authorize the filing of Uniform Commercial Code Financing Statements, mortgage and leasehold mortgage agreements and intellectual property security agreements by the Agent to confirm and/or perfect the Agent’s security interests in the Borrowers’ assets, and grant power to and appoint Agent as Borrowers’ attorney-in-fact to execute and record such instruments on Borrowers’ behalf.

          b.           Waiver.  Lenders hereby waive any Specified Default, but only to the extent such Specified Default exists prior to the Waiver Termination Date.  For the sake of clarity, to the extent any Specified Default continues to exist as of the Waiver Termination Date (or, but for this Agreement, would have existed at any time from and including December 25, 2010 through the Waiver Termination Date), such Specified Default shall constitute an Event of Default under the Credit Agreement without the need for further notice to Borrowers or any other person and without any opportunity to cure as of the Waiver Termination Date.  Each Borrower hereby waives any right it may otherwise have now or in the future to notice of any Specified Default or to cure any Specified Default.  For the sake of clarity, immediately upon termination of the Waiver Period (for any reason), the Specified Defaults shall constitute Events of Default under the Credit Agreement and other Loan Documents and the Lenders shall be entitled to take any and all remedial actions and exercise any and all rights and remedies against the Borrowers and may cease making Loans under the Credit Agreement.

5.           Waiver Period.  For purposes of this Agreement, the term “Waiver Period” shall mean the period from and including the Effective Date until the earliest to occur of (the date of such occurrence, the “Waiver Termination Date”) (i) June 30, 2011; (ii) the Closing of a Sale; or (iii) the occurrence of any Default or Event of Default under the Credit Agreement (except for any Specified Default).

          a.           Deferral of Principal Payments.  The Loan Documents are hereby amended to provide that payments of principal to be paid to Lenders from the Effective Date to the Waiver Termination Date (other than payments related to the Swing Loans to the extent the Total Outstandings of Working Capital Revolver Loans, Swing Line Loans and L/C Obligations, would otherwise exceed the Aggregate Commitment for Working Capital Loans for all Lenders), shall be due and payable and shall be paid to Lenders on the Waiver Termination Date.  For the sake of clarity, Borrowers’ obligations under the Loan Documents to pay Obligations other than principal payments remain unchanged by this Agreement.

            (i)           Section 1.01 of the Credit Agreement is hereby amended to replace the definition of “L/C Sublimit” with the following: ““L/C Sublimit” means an amount equal to $20,000,000; provided, however, effective on and after the Seventh Amendment Effective Date, the L/C Sublimit shall mean an amount equal to the aggregate amount of outstanding Letters of Credit as of the Seventh Amendment Effective Date.  The L/C Sublimit is part of, and not in addition to, the Aggregate Commitments for Revolving Loans.”

            (ii)          Section 2.03(a)(i) is hereby amended to replace “(1) from time to time on any Business Day during the period from the Closing Date until the L/C Expiration Date” with “(1) from time to time on any Business Day during the period from the Closing Date until the Seventh Amendment Effective Date”.

            (iii)         This will confirm the agreement of the parties that Letters of Credit may not, from and after the Seventh Amendment Effective Date, be issued by the L/C Issuer under the Fixed Asset Revolving Loan Sublimit and no L/C Credit Extension shall be permitted under the Fixed Asset Revolving Loan Sublimit.

d.         Amendment to Schedule 2.01 to Credit Agreement.  In order to postpone the Commitment reduction with respect to Working Capital Revolver Loans that is scheduled to occur on January 14, 2011, Part A of Schedule 2.01 (Commitments and Applicable Percentages) to the Credit Agreement is hereby amended as follows: under heading “A. Working Capital Revolver Loan and L/C Obligations”, each place the date “January 14, 2011” appears, replace such date with “the Maturity Date” and delete all text following the newly inserted “the Maturity Date” in each entry under the column heading “Working Capital Revolver Loan and L/C Obligations Commitment”.

             (ii)           Section 2.13 of the Credit Agreement is hereby amended to add the following Section 2.13(e):  “(e) Notwithstanding the foregoing Sections 2.13(a) through (c), if the Working Capital Revolver Loan Maturity Date, the Swing Line Loan Maturity Date, the Fixed Asset Loan Maturity Date, the Mortgage Component Maturity Date, the Equipment Component Maturity Date, and the IP Component Maturity Date have not otherwise occurred as of the Waiver Termination Date, then each such Maturity Date shall be the Waiver Termination Date.”

             (h)           (i) on or before the Seventh Amendment Effective Date, a thirteen-week cash flow forecast for the thirteen-week period covering the period of the week ending January 14, 2011 to the week ending April 8, 2011 (the “Q1 Budget”), (ii) on or before April 1, 2011, a thirteen-week cash flow forecast reasonably acceptable to the Lenders for the thirteen-week period covering the period of the week ending April 15, 2011 to the week ending June 30, 2011 (the “Q2 Budget”), and (iii) on or before every Wednesday after the Seventh Amendment Effective Date, a thirteen-week cash flow forecast in form substantially similar to the Q1 Budget or the Q2 Budget, as applicable (each, a “Weekly Budget”), which, in the case of each of the Q1 Budget, the Q2 Budget and each Weekly Budget, projects on a weekly basis for said thirteen-week period (each, a “Budget Period”) cash revenue, receipts, expenses and disbursements and other information relevant to the Borrowers’ business and, in the case of each Weekly Budget, showing for the week most recently ended actual cash flows versus the Q1 Budget or Q2 Budget, as applicable.  Any material and adverse amendments or changes to the Q1 Budget or Q2 Budget may only be made with the prior written consent of the Agent; and

             (i)           on or before every Wednesday after the Seventh Amendment Effective Date (time being of the essence), a weekly sales flash report setting forth weekly gross sales of the Borrowers.

6.25      Sale Process.   Undertake a process (the “Sale Process”) to effectuate a Sale during the Waiver Period.  In connection with the Sale and Sale Process, the Borrowers agree to the following tasks by the dates set forth below (each a “Sale Process Milestone” and, collectively, the “Sale Process Milestones”):

(c)           By no later than the week of January 31, 2011, Borrowers shall have set up either or both of a physical or virtual due diligence room and shall have populated such due diligence room(s) with all then current data, documents, information and materials that a bona fide purchaser would reasonably deem relevant in evaluating whether to participate in a Sale.  Agent and Lenders and their representatives, consultants, advisors, attorneys and other professionals shall have access to the due diligence room(s) and all information, documents and materials (including,

In connection with the Sale Process, the Borrowers and Janney shall deliver to the Agent and its consultants and advisors written status reports, in form and substance reasonably acceptable to the Agent, regarding the Sale Process, interested parties, prospective purchasers, status of due diligence and projected timeline to a closing on a Sale, and, on each Thursday during the Waiver Period, shall meet either in person or telephonically with the Agent, Lenders and their consultants and advisors to discuss the Sale Process.  In addition to representatives of Janney, Borrowers’ Chief Financial Officer and, to the extent one exists, Chief Restructuring Officer (or if either is not available, a designee with comparable knowledge) shall participate in each such weekly meeting.

                   7.08.           Restricted Payments.  Announce, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, or issue or sell any Equity Interests except upon and as part of the consummation of a Sale in accordance with the terms of this Agreement.

          7.20           Payments to MELF, PIDC, Liberty, Liberty II and New Lenders. Make any payments to MELF, PIDC, L/S 26th Street South, L.P. (“Liberty”), L/S Three Crescent Drive, LP (“Liberty II”) or any New Lender on or after the Seventh Amendment Effective Date through the Waiver Termination Date, except that Borrowers may (x) make payments to Liberty and Liberty II for Operating Expenses first due in January 2011 or during the Waiver Period to Liberty under the Navy Yard Lease or Liberty II under the Office Lease, (y) make payments of interest to MELF and PIDC on their portion of the New Loans at per annum rates not in excess of 4.25% and 9.5%, respectively.  For purposes of this section, “Operating Expenses” shall have the meaning ascribed to such term in each of the Navy Yard Lease and the Office Lease, respectively, and (z) pay any commitment fee payable to PIDC or MELF, respectively, in connection with their portion of the New Loans.

                        (ii)          Section 9.01(f) is amended to delete the words (a) “and the appointment continues undischarged or unstayed for 60 calendar days” from the third clause of such section and (b) “and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding” from the last clause of such section.

(u)           (i) any breach by any Borrower of any of its agreements under the Waiver Agreement and Sixth Amendment to Credit Agreement (the “Sixth Amendment”), dated as of December 31, 2010 (except to the extent performance of any obligation thereunder is waived pursuant to the Seventh Amendment); (ii) any

(y)           the termination or resignation of Janney as Borrowers’ investment banker and financial advisor or other reduction in Janney’s duties or responsibilities in such roles or any act by Borrowers to inhibit Janney’s performance of its duties and responsibilities in such roles, unless (A) such termination or resignation is for the purpose of the Borrowers engaging another investment banker satisfactory to the Agent and (B) the Borrowers, in fact, engage such other investment banker within three (3) business days of Janney’s resignation or termination; or

b.           MELF and PIDC shall have agreed to postpone all payments due and owing to them by the Borrowers through at least July 1, 2011 and shall have waived all existing defaults, if any, related to the MELF Loans and PIDC Loans, respectively, pursuant to an agreement(s) in the form attached hereto as Schedule 2 (each a “MELF/PIDC Agreement”), each of which MELF/PIDC Agreement (without implying any current or future obligation on the Agent or Lenders to obtain any consent to any amendments or waivers except as expressly set forth in the Intercreditor Agreement) shall include MELF’s and PIDC’s consent to this Agreement,

d.           Borrowers shall have delivered to Agent updated insurance certificates showing, in the case of liability insurance, that "Citizens Bank of Pennsylvania, as Agent"  is an "additional insured" and, in the case of property casualty insurance, that "Citizens Bank of Pennsylvania, as Agent"  is an "additional insured and lender loss payee",

e.           Borrower shall have received not less than $5,000,000 in cash proceeds of one or more loans on terms and conditions acceptable to Agent (each such loan a “New Loan”), the payment obligations and any liens related thereto to be subordinate to the Obligations and Agent’s liens in Borrowers’ assets, subject only to the terms of the Intercreditor Agreement,

f.           each New Lender, PIDC and MELF shall have executed and delivered an Amended and Restated Intercreditor Agreement in the form attached hereto as Schedule 5 (the “New Loan Intercreditor Agreement”), and

g.           Borrowers shall have delivered to Lenders a cash flow forecast for the thirteen-week period covering the period of the week ending January 14, 2011 to the week ending April 8, 2011 (the “Q1 Budget”) in form and substance reasonably acceptable to the Lenders, which projects on a weekly basis for the period reflected therein cash revenue, receipts, expenses and disbursements and other information relevant to the Borrowers’ business.

under the laws of its state of formation, and (ii) has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under this Agreement; (b) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of the Borrowers (including, without limitation, any required shareholder approvals); (c) the execution, delivery and performance hereof, the consummation of the transactions herein contemplated and the compliance with the terms and conditions hereof do not conflict with or result in a breach of, or require consent under, the organizational documents of any Borrower, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument by which any Borrower or any of its property is bound or by which any Borrower or any of its property is subject, and do not constitute a default under any such agreement or instrument, or result in the creation or imposition of any lien or encumbrance upon any property of any Borrower pursuant to the terms of any such agreement or instrument; (d) this Agreement has been duly and validly executed and delivered by each Borrower and constitutes its legal, valid and binding obligation, enforceable against each Borrower in accordance with its terms;  (e) no authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by any Borrower of this Agreement or for the legality, validity or enforceability hereof; (f) there are no Default or Events of Default in existence under the Loan Documents other than the Specified Defaults; (g) assuming PIDC and MELF each execute a MELF/PIDC Agreement, no Borrower is aware of any facts or circumstances existing or expected to exist prior to June 30, 2011 that would constitute defaults or events of default under any Borrower’s agreement(s) with MELF or PIDC; (h) assuming Liberty and Liberty II execute the Liberty Agreement, no Borrower is aware of any facts or circumstances existing or expected to exist prior to June 30, 2011 that would constitute defaults or events of default under any Borrower’s agreement(s) with Liberty I or Liberty II, and (i) no Borrower is aware of any facts or circumstances existing or expected to exist prior to June 30, 2011 that would constitute defaults or events of default under any Borrower’s agreement(s) with any New Lender.

BORROWERS AND LENDERS EACH ACKNOWLEDGE AND AGREE THAT (I) THE INDEBTEDNESS, SECURITY INTERESTS AND OTHER LIENS GRANTED TO LENDERS SECURING THE OBLIGATIONS ARE VALID AND PERFECTED IN ACCORDANCE WITH APPLICABLE LAW; (II) THE OBLIGATIONS ARE NOT SUBJECT TO ANY SETOFF, DEFENSE, CLAIM, COUNTERCLAIM, RECOUPMENT, OR AVOIDANCE AND/OR SUBORDINATION UNDER THE BANKRUPTCY CODE OR OTHERWISE; AND (III) BORROWERS HOLD NO CLAIMS AGAINST AGENT OR ANY LENDER, INDIVIDUALLY AND/OR AS AGENT, SUCCESSOR OR ASSIGN, OR AGAINST AGENT’S OR ANY LENDER’S OFFICERS, AGENTS, DIRECTORS, REPRESENTATIVES, ATTORNEYS, AND SUCCESSORS AND ASSIGNS (COLLECTIVELY, THE “LENDER PARTIES”).  TO THE EXTENT THAT ANY BORROWER HOLDS ANY CLAIMS AGAINST ONE OR MORE OF THE LENDER PARTIES, INCLUDING BUT NOT LIMITED TO CLAIMS RELATING TO ANY EXTENSION OR NON-EXTENSION OF A LETTER OF CREDIT OR ANY ISSUANCE OR NON-ISSUANCE OF A LETTER OF CREDIT OR OTHERWISE ARISING FROM THE LOAN DOCUMENTS AND ADMINISTRATION THEREOF OR COLLECTION OF

all respects ratified and confirmed, as amended by this Agreement.  Each Borrower shall remain obligated to comply with all of its obligations contained in each Loan Document to which it is a party, except as otherwise provided by this Agreement and any other documents required by this Agreement.  This Agreement and any other documents required by this Agreement shall be deemed to be a Loan Document for all purposes under and in connection with this Agreement, the Credit Agreement and the other Loan Documents and shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.  This Agreement is not intended to confer any rights or benefits on any Person other than the parties hereto and their respective successors and assigns, except that the Lender Parties are intended third-party beneficiaries of the acknowledgment and release provisions hereof.

(c) any Event of Default that arises from Borrower’s failure to make “minimum required contributions” to Borrowers’ ERISA Plans, provided, the Borrowers shall have submitted a funding waiver request to the Internal Revenue Service.