WAIVER TO CREDIT AGREEMENT
THIS WAIVER TO CREDIT AGREEMENT (this "Waiver") is entered into as of November 8, 2016 by and among the lenders identified on the signature pages hereof (each of such lenders, together with its successors and permitted assigns, is referred to hereinafter as a "Lender"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for each member of the Lender Group and the Bank Product Providers (in such capacity, together with its successors and assigns in such capacity, "Agent"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as sole lead arranger (in such capacity, together with its successors and assigns in such capacity, the "Sole Lead Arranger"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as sole book runner (in such capacity, together with its successors and assigns in such capacity, the "Sole Book Runner"), XXXXX XXXXX, INC., a Delaware corporation ("Xxxxx Xxxxx"), TRILLIUM SOFTWARE, INC., a Delaware corporation ("Trillium"), 3Q DIGITAL, INC., a Delaware corporation ("3Q"), XXXXX-XXXXX DATA SERVICES LLC, a Maryland limited liability company ("Data Services"), XXXXX-XXXXX DIRECT, INC., a New York corporation ("HH Direct"), XXXXX-XXXXX DIRECT MARKETING/DALLAS, INC., a Delaware corporation ("HH Dallas"), XXXXX-XXXXX DIRECT MARKETING/FULLERTON, INC., a California corporation ("XX Xxxxxxxxx"), XXXXX XXXXX DIRECT MARKETING/BALTIMORE, INC., a Maryland corporation ("HH Baltimore"), XXXXX-XXXXX DIRECT MARKETING/JACKSONVILLE, LLC, a Delaware limited liability company ("HH Jacksonville"), XXXXX-XXXXX DIRECT MARKETING/KANSAS CITY, LLC, a Delaware limited liability company ("HH Kansas City"), XXXXX-XXXXX LOGISTICS, LLC, a Florida limited liability company ("Logistics"), XXXXX-XXXXX RESPONSE MANAGEMENT/AUSTIN, INC., a Delaware corporation ("XX Xxxxxx"), XXXXX-XXXXX RESPONSE MANAGEMENT/BOSTON, INC., a Massachusetts corporation ("HH Boston"), XXXXX-XXXXX STRATEGIC MARKETING, INC., a Delaware corporation ("Strategic Marketing"), NSO, INC., an Ohio corporation ("NSO"), SALES SUPPORT SERVICES, INC., a New Jersey corporation ("Sales Support" and, together with Xxxxx Xxxxx, Trillium, 3Q, Data Services, HH Direct, HH Dallas, XX Xxxxxxxxx, HH Baltimore, HH Jacksonville, HH Kansas City, Logistics, XX Xxxxxx, HH Boston, Strategic Marketing and NSO are referred to hereinafter each individually as a "Borrower", and individually and collectively, jointly and severally, as the "Borrowers").
WHEREAS, Borrowers, Agent, and Lenders are parties to that certain Credit Agreement dated as of March 10, 2016 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, Borrowers have notified Agent and the Lenders that certain Events of Default exist under (i) Section 8.2(a) of the Credit Agreement as a result of a breach of Section 7(a) of the Credit Agreement due to Borrowers' failure to have a Fixed Charge Coverage Ratio of at least 1.1:1.0, measured for the 12 month period ending on September 30, 2016 and (ii) Section 8.2(a) of the Credit Agreement as a result of a breach of Section 7(b) of the Credit Agreement due to Borrowers' failure to have a Leverage Ratio less than or equal to 2.25:1.00 as of September 30, 2016 (collectively, the "Existing Events of Default"); and
WHEREAS, Borrowers have requested that Agent and the Lenders waive the Existing Events of Default, and Agent and the Lenders have agreed to such waiver, on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and mutual agreements herein contained, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein but not defined shall have the meanings given to such terms in the Credit Agreement.
Section 2. Waiver. Subject to the satisfaction of the conditions set forth in Section 3 below, and in reliance upon the representations and warranties of the Loan Parties set forth in Section 4 below, Agent and Lenders hereby waive the Existing Events of Default. This is a limited waiver and shall not be deemed to constitute a waiver of any other Event of Default or any future breach by the Borrowers of the Credit Agreement or any of the other Loan Documents or any other requirements of any provision of the Credit Agreement or any other Loan Documents.
Section 3. Conditions to Effectiveness of this Waiver. The effectiveness of this Waiver shall be subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties set forth in Section 5 hereof shall be true and correct (and each of the Loan Parties so certifies, by their signatures below) as of the date hereof.
(b) No Default or Event of Default. No Default or Event of Default (other than the Existing Events of Default) shall exist immediately prior to giving effect to this Waiver and no Default or Event of Default shall exist thereafter.
(c) Execution of this Waiver. The Agent shall have received a fully-executed copy of this Waiver, signed by each of the Loan Parties, the Agent and the Lenders, and such related due diligence items as the Agent shall reasonably require in connection with this Waiver.
(d) Fees and Expenses. Agent shall have received all fees and expenses set forth in Section 8 and Section 10 of this Waiver.
Section 5. Representations and Warranties. Each of the Loan Parties hereby, jointly and severally, represents and warrants to the Agent, for the benefit of the Lenders, that the following are true and correct:
(a) After giving effect to the waiver set forth in Section 2 hereof, no Default or Event of Default has occurred and is continuing.
(b) All representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) on and as of the date of this Waiver (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date).
(c) This Waiver and the other related documents to which each is a party constitutes the legal, valid and binding obligation of obligations of each Borrower and are enforceable against such Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or limiting creditors' rights generally.
Section 6. Reaffirmation. Each Loan Party hereby ratifies, affirms, acknowledges and agrees that the Credit Agreement and the other Loan Documents represent the valid, enforceable and collectible obligations of the Loan Parties, and further acknowledges that there are no existing claims, defenses, personal or otherwise, or rights of setoff whatsoever with respect to the Credit Agreement or any other Loan Document. Each Loan Party hereby agrees that this Waiver in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The Liens and rights securing payment of the Obligations are hereby ratified and confirmed by each Loan Party in all respects.
Section 7. Release.
(a) In consideration of the agreements of Agent and Lenders contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each Borrower and each other Loan Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally and irrevocably releases, remises and forever discharges Agent and Lenders, and their successors and assigns, and their present and former shareholders, affiliates, subsidiaries, divisions, predecessors, directors, officers, attorneys, employees, agents and other representatives (Agent, each Lender and all such other Persons being hereinafter referred to collectively as the "Releasees" and individually as a "Releasee"), of and from all demands, actions, causes of action, suits, covenants, contracts, controversies, agreements, promises, sums of money, accounts, bills, reckonings, damages and any and all other claims, counterclaims, defenses, rights of set-off, demands and liabilities whatsoever (individually, a "Claim" and collectively, "Claims") of every name and nature, known or unknown, suspected or unsuspected, both at law and in equity, which any such Loan Party or any of their respective successors, assigns, or other legal representatives may now or hereafter own, hold, have or claim to have against the Releasees or any of them for, upon, or by reason of any circumstance, action, cause or thing whatsoever in relation to, or in any way in connection with any of the Credit Agreement, or any of the other Loan Documents or transactions thereunder or related thereto which arises at any time on or prior to the day and date of this Waiver.
(b) Each Borrower and each other Loan Party understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction
against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(c) Each Borrower and each other Loan Party agrees that no fact, event, circumstance, evidence or transaction existing or arising on or prior to the date hereof which could now be asserted or which may hereafter be discovered shall affect in any manner the final, absolute and unconditional nature of the release set forth above.
Section 8. Miscellaneous.
(a) Effect of this Waiver. The execution, delivery and effectiveness of this Waiver shall not operate as a waiver of any right, power or remedy of the Agent under the Credit Agreement or any other Loan Document, nor constitute a waiver of any provision of the Credit Agreement or any other Loan Document, except as specifically set forth herein.
(b) Expenses. Borrowers jointly and severally agree to pay on demand all Lender Group Expenses of Agent and all Lenders (including, without limitation, the reasonable and documented fees and expenses of outside counsel for Agent and all Lenders) in connection with the preparation, negotiation, execution, delivery and administration of this Waiver and all other instruments or documents provided for herein or delivered or to be delivered hereunder or in connection herewith. All obligations provided herein shall survive any termination of this Waiver and the Credit Agreement as modified hereby.
(c) Counterparts. This Waiver may be executed in any number of counterparts and by the different parties on separate counterparts, and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Delivery of the executed counterpart of this Waiver by facsimile or electronic mail shall be as effective as delivery of a manually executed counterpart to this Waiver.
Section 9. Governing Law. THIS WAIVER SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF. THE CHOICE OF LAW AND VENUE AND JURY TRIAL WAIVER SET FORTH IN SECTION 12 OF THE CREDIT AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE AND SHALL APPLY IN ALL RESPECTS TO THIS WAIVER.
Section 10. Waiver Fee. The Loan Parties hereby agree to pay to the Agent for the benefit of the Lenders, on or prior to the date hereof a fee in the amount of $75,000, which fee shall be deemed fully earned and non-refundable as of the date hereof and shall be chargeable to the Loan Account.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly executed by their respective authorized officers as of the day and year first above written.
BORROWERS: | XXXXX XXXXX, INC. |
TRILLIUM SOFTWARE, INC. | |
XXXXX-XXXXX RESPONSE MANAGEMENT/BOSTON, INC. | |
XXXXX-XXXXX LOGISTICS, LLC | |
XXXXX XXXXX DIRECT MARKETING/BALTIMORE, INC. | |
XXXXX-XXXXX DIRECT, INC. | |
XXXXX-XXXXX DIRECT MARKETING/JACKSONVILLE, LLC | |
XXXXX-XXXXX DIRECT MARKETING/KANSAS CITY, LLC | |
XXXXX-XXXXX STRATEGIC MARKETING, INC. | |
XXXXX-XXXXX RESPONSE MANAGEMENT/AUSTIN, INC. | |
SALES SUPPORT SERVICES, INC. | |
3Q DIGITAL, INC. | |
XXXXX-XXXXX DATA SERVICES LLC | |
XXXXX-XXXXX DIRECT MARKETING/DALLAS, INC. | |
XXXXX-XXXXX DIRECT MARKETING/FULLERTON, INC. | |
NSO, INC. | |
By: | /s/ Xxxxxxx X. Xxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxx | |
Title: | Authorized Officer | |
Signature Page to Waiver to Credit Agreement
XXXXX FARGO BANK, NATIONAL ASSOCIATION, a | |
national banking association, as Agent, as Sole Lead Arranger as | |
Sole Book Runner and as a Lender | |
By: | /s/ Xxxx Xxxxx | |
Name: | Xxxx Xxxxx | |
Its: | Authorized Signatory | |
Signature Page to Waiver to Credit Agreement
LBC III WF FUNDING, LLC | |
As a Lender | |
By: LBC Credit Management L.P | |
Its: Designated Manager | |
By: | /s/ Xxxxx X. Xxxxxxx | |
Name: | Xxxxx X. Xxxxxxx | |
Its: | Vice President | |
LBC III KB FUNDING, LLC | |
As a Lender | |
By: LBC Credit Management L.P | |
Its: Designated Manager | |
By: | /s/ Xxxxx X. Xxxxxxx | |
Name: | Xxxxx X. Xxxxxxx | |
Its: | Vice President | |
Signature Page to Waiver to Credit Agreement
CONSENT AND REAFFIRMATION
The undersigned hereby (i) acknowledges receipt of a copy of the foregoing Waiver to Credit Agreement (the "Waiver"); (ii) consents to Borrowers' execution and delivery of the Waiver; (iii) agrees to be bound by the Waiver; and (iv) affirms that nothing contained therein shall modify in any respect whatsoever any Loan Documents (other than as specifically provided in the Waiver) to which the undersigned is a party and reaffirms that the Loan Documents to which it is a party shall continue to remain in full force and effect. Although each of the undersigned has been informed of the matters set forth herein and has acknowledged and agreed to same, the undersigned understands that Agent and Lenders have no obligation to inform the undersigned of such matters in the future or to seek the undersigned's acknowledgment or agreement to future amendments, waivers or consents, and nothing herein shall create such a duty.
IN WITNESS WHEREOF, the undersigned has executed this Consent and Reaffirmation on and as of the date of the Waiver.
BORROWERS: | XXXXX-XXXXX FLORIDA, INC. |
XXXXX-XXXXX PRINT, INC. | |
XXXXX-XXXXX STS, INC. | |
By: | /s/ Xxxxxxx X. Xxxxxxx | |
Name: | Xxxxxxx X. Xxxxxxx | |
Title: | Authorized Officer | |
Signature Page to Waiver to Credit Agreement
