Note 15.

Subsequent Events

Merger Agreement to Acquire PSS Holdings Inc. (“PSS”).

On February 18, 2017, the Company entered into the Merger Agreement to acquire PSS. Under the terms of the Merger Agreement, the aggregate purchase price to be paid for PSS at closing is $119.5 million in cash, subject to certain adjustments based upon closing working capital plus a portion of the value of certain tax benefits as they are realized after the closing. The purchase price will also be increased by an additional $20,000 per day if the merger is consummated after March 31, 2017 and certain conditions to the obligations of the Company to close are otherwise satisfied, such increase applicable for each day after March 31, 2017 that such conditions are so satisfied.

The consummation of the merger is subject to the satisfaction of certain conditions, including receipt of certain required third party consents. If any condition to the merger is not satisfied or waived, the merger will not be completed. In addition, the Company intends to fund the merger consideration through a combination of equity and debt financing. The Company does not presently have commitments for such financing. To the extent the merger is not completed for any reason with respect to our ability to obtain financing for the merger, we may be required to pay a termination fee of $625,000 to PSS.

On April 13, 2017, the Company received a letter from PSS purporting to terminate the Merger Agreement, unless we notify PSS that we are prepared to close and schedule the closing of the merger for no later than April 23, 2017. The Company does not believe the purported termination of the Merger Agreement is valid, and the Company is evaluating its alternatives and rights under the Merger Agreement.

Forbearance Agreement and Waiver

On February 24, 2017, we entered into a forbearance agreement with MC Admin Co LLC and the other lenders under our Credit Agreement. Under the forbearance agreement, the lenders agreed to forbear from exercising rights and remedies (including enforcement and collection actions) related to our failure to comply with the covenants related to the fixed charge coverage ratio, consolidated EBITDA and the senior secured leverage ratio, for the fiscal quarter ended December 31, 2016. The forbearance will expire no later than March 31, 2017.

The Company entered into a Limited Waiver (“the Waiver”) from MC Admin Co LLC and other lenders under the Credit Agreement as of March 31, 2017, pursuant to which the lenders waived the Company’s noncompliance with the Specified Financial Covenants as of December 31, 2016. Pursuant to the Waiver:

	·	Loans under the Credit Agreement are subject to additional interest at a rate of 2% per annum until the earliest of (x) the date on which all loans are repaid and all commitments under the Credit Agreement are terminated, (y) the date we deliver the financial statements and certificates for the quarter ending March 31, 2017 showing that we are not in default under the Credit Agreement or (z) the date on which default interest is otherwise due under the Credit Agreement;

	·	We must obtain lender consent prior to use of our revolving credit facility; and

We cannot effect a Cure Right in respect of the quarter ending March 31, 2017.