Exhibit 10.1

SEVENTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

This SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (“Amendment”) is
entered into effective as of September 16, 2010 (the “Effective Date”), among
NORTHWEST PIPE COMPANY, an Oregon corporation (the “Borrower”), and BANK OF
AMERICA, N.A., as Administrative Agent (the “Administrative Agent”).

RECITALS

Borrower, Administrative Agent and certain lenders party thereto from time to
time are parties to that certain Amended and Restated Credit Agreement entered
into as of May 31, 2007 (as amended, modified or supplemented from time to time,
the “Credit Agreement”). Borrower and Administrative Agent desire to amend the
Credit Agreement as set forth herein. The Required Lenders (as that term is
defined in the Credit Agreement), and Bank of America, N.A., as Swing Line
Lender and L/C Issuer, have consented to the amendments to the Credit Agreement
set forth herein as indicated by their signatures below.

NOW THEREFORE, the parties agree as follows:

AGREEMENT

1. Recitals. The Recitals are true.

2. Definitions. Capitalized terms used herein and not otherwise defined shall
have the meanings given in the Credit Agreement.

3. Waivers.

(a) Compliance with the financial covenants under Section 6.17 of the Credit
Agreement (and any requirement that Borrower deliver any additional Compliance
Certificate demonstrating compliance with such covenants for such period) is
waived for Borrower’s fiscal quarter ending June 30, 2010.

(b) Borrower has advised Administrative Agent and Lenders that it expects to
restate its financial statements for its fiscal years ending December 31 of each
of 2007, 2008 and 2009 (the “Restatement”). Any Events of Default that may have
occurred under the Credit Agreement by reason of any certification previously
provided by any officer of Borrower in any Compliance Certificate with respect
to financial statements of Borrower delivered under the Credit Agreement being
rendered inaccurate or misleading as a result of such restatement, are hereby
waived; the Restatements will not be used to retest compliance with any
financial covenants for any period through June 30, 2010.

(c) The foregoing waivers are conditioned on the Restatement being consistent in
all material respects with the draft restatement delivered by Borrower to

 

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Administrative Agent and Lenders on August 31, 2010. The foregoing waivers do
not constitute waivers of any other Default now existing or hereafter arising,
whether known or unknown by Administrative Agent. The foregoing waivers do not
represent any amendment of any provision of the Credit Agreement.

4. Amendments to Definitions.

(a) The definition of “Annualized Consolidated EBITDA” is deleted from the
Credit Agreement.

(b) The table contained in the definition of “Applicable Rate” in Section 1.01
of the Credit Agreement is amended in its entirety to read as follows:

 

Applicable Rate  

Pricing

Level

 

Consolidated Total

Leverage Ratio

 

Eurocurrency

Rate +

   

Standby

Letters of

Credit

   

Commercial

Letters of

Credit

    Commitment
Fee    

Base Rate

+ or -

  1   ³4.50:1   4.50 %    4.50 %    2.00 %    0.875 %    3.50 %  2  
³3.50:1 but <4.50:1   4.00 %    4.00 %    2.00 %    0.750 %    3.00 %  3  
³3.00:1 but <3.50:1   3.75 %    3.75 %    1.875 %    0.625 %    2.75 %  4  
³2.50: but <3.00:1   3.375 %    3.375 %    1.6875 %    0.50 %    2.375 %  5  
³2.00 but <2.50:1   2.875 %    2.875 %    1.4375 %    0.40 %    1.875 %  6  
<2.00:1   2.50 %    2.50 %    1.25 %    0.40 %    1.50 % 

The Applicable Rate from the Effective Date through the delivery date of the
Compliance Certificate required to be delivered together with the financial
statements described in Section 6.1(b) of the Credit Agreement for Borrower’s
fiscal quarter ending September 30, 2010, shall be determined based upon Pricing
Level 1.

(c) The definition of “Consolidated EBITDA” in Section 1.01 of the Credit
Agreement is amended in its entirety to read as follows:

“‘Consolidated EBITDA’” means for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries for such period, (iii) depreciation and
amortization expense and (iv) other expenses in such period reducing
Consolidated Net Income for such period which did not or will not require a cash
settlement in such period or any future period (including but not limited to
impairment charges, costs

 

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associated with exit or disposal activities and stock based compensation), minus
(b) all items increasing Consolidated Net Income for such period which did not
or will not result in a cash settlement in such period or any future period,
including any gain from the sale of assets. For purposes of calculating
Consolidated EBITDA, EBITDA for permitted acquisitions made by the Borrower,
based on financial statements and information reported to the SEC shall be
included in the calculation of Consolidated EBITDA. The permitted acquisitions’
EBITDA shall be incorporated on a decreasing pro-rata basis, with 100% of the
permitted acquisitions’ EBITDA included in the calculation for the first
calendar quarter end following the close of the acquisition, 75% included in the
second quarter end, 50% included in the third quarter end and 25% included in
the fourth quarter end. Beginning with the fifth quarter following the closing
of the acquisition, the EBITDA for the acquisitions’ prior fiscal year shall no
longer be incorporated in the calculation of Consolidated EBITDA.”

(d) The definition of “Consolidated Senior Leverage Ratio” in Section 1.01 of
the Credit Agreement is amended in its entirety to read as follows:

“‘Consolidated Senior Leverage Ratio’ means, on any date of determination, the
ratio of Consolidated Senior Funded Debt to Consolidated EBITDA for the period
of four consecutive fiscal quarters of the Borrower and its Subsidiaries then
most recently ended.”

(e) The definition of “Consolidated Total Leverage Ratio” in Section 1.01 of the
Credit Agreement is amended in its entirety to read as follows:

“‘Consolidated Total Leverage Ratio’ means, on any date of determination, the
ratio of the Consolidated Total Debt to Consolidated EBITDA for the period of
four consecutive fiscal quarters of the Borrower and its Subsidiaries then most
recently ended.”

(f) The definition of “Temporary Availability Block” in Section 1.01 of the
Credit Agreement is amended in its entirety to read as follows:

“‘Temporary Availability Block’ means from September 17, 2010, until delivery by
Borrower of the Compliance Certificate required to be delivered pursuant to
Section 6.02(b) hereof with respect to the fiscal quarter of Borrower and its
Subsidiaries ending March 31, 2011, the amount of $7,500,000, and thereafter
$0.”

 

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5. Amendment to Section 6.01(a)(i) of the Credit Agreement. Section 6.01(a)(i)
of the Credit Agreement is amended in its entirety to read as follows:

“(a)(i) as soon as available, but in any event within 288 days after the end of
Borrower’s 2009 fiscal year, and within 105 days after the end of each other
fiscal year of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal year, setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be audited and accompanied by a report and
opinion of an independent certified public accountant of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
shall not be subject to any “going concern” or like qualification or exception
or any qualification or exception as to the scope of such audit; and”

6. Amendment to Section 6.01(b)(i) of the Credit Agreement. Section 6.01(b)(i)
of the Credit Agreement is amended in its entirety to read as follows:

“(b)(i) as soon as available, but in any event within (x) 212 days after the end
of the first fiscal quarter of Borrower’s 2010 fiscal year, (y) 121 days after
the end of the second fiscal quarter of Borrower’s 2010 fiscal year, and (z) 60
days after the end of each of the other first three fiscal quarters of each
fiscal year of Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal quarter, and the related consolidated
statements of income or operations, shareholders’ equity and cash flows for such
fiscal quarter and for the portion of the Borrower’s fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and corresponding portion of the
previous fiscal year, all in reasonable detail and prepared in accordance with
GAAP, such consolidated statements to be certified by the chief executive
officer, chief financial officer, treasurer or controller of the Borrower as
fairly presenting the financial condition, results of operations, shareholders’
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year end audit adjustments and the absence of
footnotes; and”

 

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7. Amendment to Section 6.01(d) of the Credit Agreement. Section 6.01(d) of the
Credit Agreement is amended in its entirety to read as follows:

“(d)(i) Not later than the fifteenth (15th) and the thirtieth (30th) day of each
month, (i) a forecast prepared by management of the Borrower in form
satisfactory to the Administrative Agent and the Required Lenders, of the weekly
cash flows of the Borrower and its Subsidiaries for the periods commencing on
Monday of the immediately succeeding week, and ending 13 weeks thereafter,
together with a statement of the actual cash flows of the Borrower and its
Subsidiaries since the date of the then-most recently delivered cash flow
forecast and a description of material variances between forecast cash flows and
actual cash flows for such period, and (ii) not later than eighth (8th) Business
Day of each of each month, a report of the bookings and backlog of Borrower and
its Subsidiaries, in a form and containing details satisfactory to the
Administrative Agent and the Required Lenders, as of the last day of the
immediately preceding month.”

8. Amendment to Section 6.01(e) of the Credit Agreement. Section 6.01(e) of the
Credit Agreement is amended in its entirety to read as follows:

“(e) Not later than 60 days after the end of each fiscal quarter, an analysis of
the material variances between the forecasts contained in the business plan
delivered to Administrative Agent by Borrower in August 2010 for such fiscal
quarter or other applicable reporting period and Borrower’s actual financial
results for such fiscal quarter or reporting period, in form and substance
satisfactory to the Administrative Agent and the Required Lenders.”

9. Amendment to Section 6.17 of the Credit Agreement. Section 6.17 of the Credit
Agreement is amended in its entirety to read as follows:

“Section 6.17. Financial Covenants.

“(a) Consolidated Fixed Charge Coverage Ratio. The Borrower shall maintain a
Consolidated Fixed Charge Coverage Ratio of (i) not less than 1.10:1.00 for the
fiscal quarter ending June 30, 2011; and (ii) not less than 1.25:1.0 for each
fiscal quarter thereafter.

“(b) Consolidated Senior Leverage Ratio. The Borrower shall maintain a
Consolidated Senior Leverage Ratio of (i) not greater than 12.75:1.0 for the
fiscal quarter ending September 30, 2010; (ii) not greater than 7.50:1.0 for the
fiscal quarter ending December 31, 2010; (iii) not greater than 6.25:1.0 for the
fiscal quarter ending March 31, 2011; (iv) not greater than 4.75:1.0 for the
fiscal quarter ending June 30, 2011; (v) not greater than 4.00:1.0 for the
fiscal quarter ending September 30, 2011; and (vi) not greater than 3.50:1.00
for each fiscal quarter thereafter.

 

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“(c) Consolidated Total Leverage Ratio. The Borrower shall maintain a
Consolidated Total Leverage Ratio of (i) not greater than 12.75:1.0 for the
fiscal quarter ending September 30, 2010; (ii) not greater than 7.50:1.0 for the
fiscal quarter ending December 31, 2010; (iii) not greater than 6.25:1.0 for the
fiscal quarter ending March 31, 2011; (iv) not greater than 4.75:1.0 for the
fiscal quarter ending June 30, 2011; and (v) not greater than 4.00:1.0 for each
fiscal quarter thereafter.

“(d) Consolidated Tangible Net Worth. The Borrower shall maintain at all times a
Consolidated Tangible Net Worth of not less than the sum of (i) the greater of
$193,000,000 or 85 percent of Borrower’s Consolidated Tangible Net Worth as of
June 30, 2010, (ii) 50% of the Consolidated Net Income (but only if it is a
positive number) for each fiscal quarter of the Borrower ended after June 30,
2010, and (iii) 100% of the net proceeds from any offering of the equity
securities of the Borrower consummated after June 30, 2010.

“(e) Asset Coverage Ratio. The Borrower shall maintain at all times an Asset
Coverage Ratio of not less than 1.00:1.00. If the Borrower is out of compliance
with this covenant, the Borrower may cure the resulting Default by paying
Committed Loans within two (2) Business Days of learning of such non-compliance
in an amount sufficient to bring itself into compliance with this covenant. Any
prepayment of a Eurocurrency Rate Loan shall be accompanied by all accrued
interest on the amount prepaid, together with such additional amounts required
pursuant to Section 3.05. Each such prepayment shall be applied to the Committed
Loans of Lenders in accordance with their Applicable Percentages.

“(f) Minimum Consolidated EBITDA. The Borrower shall maintain a minimum
Consolidated EBITDA equal to or greater than (i) $3,600,000 for the fiscal
quarter ending on September 30, 2010, (ii) $9,400,000 for the cumulative two
fiscal quarters ending on December 31, 2010, (iii) and $18,500,000 for the
cumulative three fiscal quarters ending on March 31, 2011.

“(g) Rental and Operating Lease Expense. Beginning with the fiscal quarter
ending December 31, 2010 and continuing with each fiscal quarter thereafter, the
Borrower shall not permit the ratio of (i) the sum of rental and operating lease
expense for

 

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Borrower and its Subsidiaries (determined on a consolidated basis in accordance
with GAAP) to (ii) total revenue of the Borrower and its Subsidiaries
(determined on a consolidated basis in accordance with GAAP), in each case for
the period of four (4) consecutive fiscal quarters ended as of the end of such
fiscal quarter, to exceed 6.00%.”

10. Amendment to Exhibit D to the Credit Agreement. The form of Compliance
Certificate attached to the Credit Agreement as Exhibit D is amended in its
entirety by substituting Exhibit D attached hereto for Exhibit D to the Credit
Agreement.

11. Amendment Fees. Prior to this Amendment becoming effective, , Borrower shall
pay to Administrative Agent and the Required Lenders consenting hereto an
amendment fee of $937,500, such amendment fee to be allocated among such
Required Lenders in proportion to the amounts of their respective Commitments.

12. Release. As a material part of the consideration of Administrative Agent
entering into, and the Required Lenders consenting to, this Amendment, Borrower
hereby releases and forever discharges Administrative Agent, the Lenders and
each of their respective successors, assigns, officers, managers, directors,
shareholders, employees, agents, attorneys, representatives, parent
corporations, subsidiaries, and affiliates (all the foregoing, collectively, the
“Releasees” and individually, a “Releasee”), jointly and severally from any and
all claims, counterclaims, demands, damages, debts, agreements, covenants,
suits, contracts, obligations, liabilities, accounts, offsets, rights, actions
and causes of action of any nature whatsoever, including all claims, demands,
and causes of action for contribution and indemnity, whether arising at law or
in equity, whether presently possessed or possessed in the future, whether known
or unknown, whether liability be direct or indirect, liquidated or unliquidated,
whether presently accrued or to accrue hereafter, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted,
which Borrower may have or claim to have against Releasees (or any one or more
of them); provided, however, that neither Administrative Agent nor any Lender
nor any other Releasee shall be released hereby from: (i) any obligation to pay
to Borrower any amounts that Borrower may have on deposit with Administrative
Agent or any Lender, in accordance with applicable laws and the terms of the
documents establishing any such deposit relationship; or (ii) any claim
(including without limitation any claim for breach of the Credit Agreement or
other Loan Document) arising from any action, inaction or conduct of
Administrative Agent or the Lenders or the other Releasees after the effective
date of this Amendment.

13. No Further Amendment, Expenses. Except as expressly modified by this
Amendment, the Credit Agreement and the other Loan Documents shall remain
unmodified in full force and effect and the parties hereby ratify their
respective obligations thereunder. Without limiting the foregoing, Borrower
expressly reaffirms and ratifies its obligation to pay or reimburse
Administrative Agent and Lenders on request for all reasonable expenses,
including legal fees actually incurred by Administrative Agent and Lenders in
connection with the preparation of this Amendment, any other amendment documents
and the closing of the transaction contemplated hereby and thereby.

 

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14. Miscellaneous.

(a) Counterparts. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original, and all of which taken together
shall constitute one and the same Amendment, it being understood that the
Administrative Agent may rely on a facsimile counterpart signature page hereof
for purpose of determining whether a party hereto has executed a counterpart
hereof.

(b) Governing Law. This Amendment and the other agreements provided for herein
and the rights and obligations of the parties hereto and thereto shall be
construed and interpreted in accordance with the laws of the State of Oregon.

(c) Certain Agreements Not Enforceable. UNDER OREGON LAW, MOST AGREEMENTS,
PROMISES AND COMMITMENTS MADE BY THE LENDERS CONCERNING LOANS AND OTHER CREDIT
EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED
SOLELY BY THE BORROWER’S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION,
AND BE SIGNED BY THE LENDERS TO BE ENFORCEABLE.

[Signatures appear on the following page.]

 

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EXECUTED AND DELIVERED by the duly authorized officers of the parties as of the
date first above written.

 

BORROWER:      NORTHWEST PIPE COMPANY      By:   

 

     Name:   

 

     Title:   

 

ADMINISTRATIVE AGENT:     

BANK OF AMERICA, N.A., as

Administrative Agent

     By:   

 

     Name:   

 

     Title:   

 

CONSENTED TO BY THE REQUIRED LENDERS:      BANK OF AMERICA, N.A.           By:
  

 

     Name:   

 

     Title:   

 

 

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UNION BANK, N.A., formerly known as

Union Bank of California, N.A.

By:  

 

Name:  

 

Title:  

 

 

HSBC BANK USA, NATIONAL

ASSOCIATION

By:  

 

Name:  

 

Title:  

 

 

U.S. BANK NATIONAL ASSOCIATION By:  

 

Name:  

 

Title:  

 

CONSENTED TO BY SWING LINE

              LENDER AND L/C ISSUER

 

BANK OF AMERICA, N.A., as Swing Line

Lender and L/C Issuer

By:  

 

Name:  

 

Title:  

 

 

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EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                    ,

 

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated
as of May 31, 2007 (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined
therein being used herein as therein defined), among Northwest Pipe Company, an
Oregon corporation (the “Borrower”), the Lenders from time to time party
thereto, and Bank of America, N.A., as Administrative Agent, L/C Issuer and
Swing Line Lender.

The undersigned Responsible Officer hereby certifies as of the date hereof that
he/she is the                              of the Borrower, and that, as such,
he/she is authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of the Borrower, and that:

[Use following paragraph 1 for fiscal year-end financial statements]

1. The Borrower has delivered the year-end audited financial statements required
by Section 6.01(a) of the Agreement for the fiscal year of the Borrower ended as
of the above date, together with the report and opinion of an independent
certified public accountant required by such section.

[Use following paragraph 1 for fiscal quarter-end financial statements]

1. The Borrower has delivered the unaudited financial statements required by
Section 6.01(b) of the Agreement for the fiscal quarter of the Borrower ended as
of the above date. Such financial statements fairly present the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries in accordance with GAAP as at such date and for such period,
subject only to normal year-end audit adjustments and the absence of footnotes.

2. The undersigned has reviewed and is familiar with the terms of the Agreement
and has made, or has caused to be made under his/her supervision, a detailed
review of the transactions and condition (financial or otherwise) of the
Borrower during the accounting period covered by such financial statements.

3. A review of the activities of the Borrower during such fiscal period has been
made under the supervision of the undersigned with a view to determining whether
during such fiscal period the Borrower performed and observed all its
Obligations under the Loan Documents, and

[select one:]

 

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[to the best knowledge of the undersigned, during such fiscal period the
Borrower performed and observed each covenant and condition of the Loan
Documents applicable to it, and no Default has occurred and is continuing.]

—or—

[to the best knowledge of the undersigned, during such fiscal period the
following covenants or conditions have not been performed or observed and the
following is a list of each such Default and its nature and status:]

4. The representations and warranties of (i) the Borrower contained in Article V
of the Agreement and (ii) each Loan Party contained in each other Loan Document
or in any document furnished at any time under or in connection with the Loan
Documents, are true and correct on and as of the date hereof, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they are true and correct as of such earlier date, and
except that for purposes of this Compliance Certificate, the representations and
warranties contained in subsections (a) and (b) of Section 5.05 of the Agreement
shall be deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01 of the Agreement, including
the statements in connection with which this Compliance Certificate is
delivered.

5. The financial covenant analyses and information set forth on Schedules 1 and
2 attached hereto are true and accurate on and as of the date of this
Certificate.

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                            ,                     .

 

NORTHWEST PIPE COMPANY By:  

 

Name:  

 

Title:  

 

 

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For the Quarter/Year ended                             (“Statement Date”)

SCHEDULE 1

to the Compliance Certificate

($ in 000’s)

 

I.    Section 6.17(a) –Consolidated Fixed Charge Coverage Ratio.    A.   
Consolidated EBITDA for the four consecutive quarters

ending on Statement Date (“Subject Period”)

         1.    Consolidated Net Income for Subject Period:   
$                           2.    plus Consolidated Interest Charges for Subject
Period:    $                           3.    plus consolidated income taxes for
Subject Period:    $                           4.    plus consolidated
depreciation and amortization for Subject Period:    $                          
5.    plus other expenses in the Subject Period reducing Consolidated Net Income
for such period which did not or will not require a cash settlement in such
period or any future period:    $                           6.    minus all
items increasing Consolidated Net Income for the Subject Period which did not or
will not result in a cash settlement in such period or any future period,
including any gain from the sale of assets:    $                           7.   
Consolidated EBITDA (total of lines 1-6):    $                        B.   
Consolidated Maintenance Capital Expenditures for the Subject Period:   
$                        C.    Consolidated Fixed Charges          1.   
Consolidated Interest Charges for Subject Period:    $                          
2.    plus the consolidated current maturities of long-term debt as of Statement
Date:    $                           3.    plus the consolidated current
maturities of capital leases as of Statement Date:    $                       
   4.    Consolidated Fixed Charges (total of lines 1-3):   
$                    

 

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   C.   

Ratio ((Line I.A.7 less the greater of $4,000,000 or

Line I.B) divided by Line I.C.4):

                    to 1.00 Minimum Required:    1.10 to 1.00 for fiscal quarter
ending June 30, 2011             1.25 to 1.00 for each fiscal quarter thereafter
II.    Section 6.17(b) – Consolidated Senior Leverage Ratio.       A.   
Consolidated Senior Funded Debt as of Statement Date          1.    Consolidated
Total Debt as of Statement Date as defined:    $                           2.   
less Subordinated Debt as of Statement Date as defined:    $                    
      3.    Consolidated Senior Funded Debt as of Statement Date (line 1 less
line 2):    $                        B.    Consolidated EBITDA for the Subject
Period          1.    line I.A.7 above:    $                        C.    Ratio
(Line II.A.3 divided by Line II.B.1):                     to 1.00 Maximum
Permitted:    12.75 to 1.00 for fiscal quarter ending September 30, 2010      
      7.50 to 1.00 for fiscal quarter ending December 31, 2010             6.25
to 1.00 for fiscal quarter ending March 31, 2011             4.75 to 1.00 for
fiscal quarter ending June 30, 2011             4.00 to 1.00 for fiscal quarter
ending September 30, 2011             3.50 to 1.00 for each fiscal quarter
thereafter III.    Section 6.17(c) – Consolidated Total Leverage Ratio       A.
   Consolidated Total Debt at Statement Date          1.    as defined:      
$                        B.    Consolidated EBITDA for Subject Period         
1.    line 1.A.7 above:    $                        C.    Ratio (Line III.A.1
divided by Line III.B.1):                     to 1.00

 

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   Maximum Permitted:    12.75 to 1.00 for fiscal quarter ending September 30,
2010             7.50 to 1.00 for fiscal quarter ending December 31, 2010      
      6.25 to 1.00 for fiscal quarter ending March 31, 2011             4.75 to
1.00 for fiscal quarter ending June 30, 2011             4.00 to 1.00 for each
fiscal quarter thereafter IV.    Section 6.17(d) –Consolidated Tangible Net
Worth.       A.    Consolidated Tangible Net Worth at Statement Date:         
1.    total Shareholders’ Equity for Borrower and its Subsidiaries at Statement
Date:    $                           2.    less Intangible Assets of Borrower
and its Subsidiaries at Statement Date:    $                           3.   
Tangible Net Worth (Line IV.A.1 less Line IV.A.2):    $                       
B.    Consolidated Tangible Net Worth as of June 30, 2010:          1.    total
Shareholders’ Equity for Borrower and its Subsidiaries at June 30, 2010:   
$                           2.    less Intangible Assets of Borrower and its
Subsidiaries at June 30, 2010:    $                           3.    Tangible Net
Worth (Line IV.B.1 less Line IV.B.2):    $                        C.    Minimum
Required Consolidated Tangible Net Worth:          1.    the greater of
$193,000,000 or 85% of Line IV.B.3:    $                           2.    plus
the sum of 50% of Consolidated Net Income (without subtracting losses) earned in
each quarterly accounting period ended after June 30, 2010:   
$                           3.    plus the net proceeds from any equity
securities issued by Borrower after June 30, 2010:    $                    

 

Page 15 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

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      4.   

Minimum Required Consolidated Tangible

Net Worth (Line IV.C.1 plus Line IV.C.2

plus Line IV.C.3):

   $                        D.    Excess (deficiency) for covenant compliance   
      (Line IV.A.3 less IV.C.4):    $                     V.    Section 6.17(e)
–Asset Coverage Ratio.       A.    Eligible Assets at Statement Date          1.
   85% of Eligible Accounts Receivable at Statement Date:   
$                           2.    plus 60% of Eligible Inventory at Statement
Date:    $                           3.    plus 30% of Eligible Property, Plant
and Equipment at Statement Date:    $                           4.    Total
Eligible Assets at Statement Date:    $                        B.   
Consolidated Total Debt at Statement Date    $                           1.   
as defined:    $                        C.    Ratio (Line V.A.4 ÷ Line V.B.1):
                    to 1.00    Minimum Required:    1.00 to 1.00 VI.    Section
6.17(f) - Minimum Consolidated EBITDA       A.   

Consolidated EBITDA for the one, two or three consecutive quarters

ending on Statement Date, as applicable (“Cumulative Period”)

      1.    Consolidated Net Income for Cumulative Period:   
$                           2.    plus Consolidated Interest Charges for
Cumulative Period:    $                           3.    plus consolidated income
taxes for Cumulative Period:    $                           4.    plus
consolidated depreciation and amortization for Cumulative Period:   
$                           5.    plus other expenses in such Cumulative Period
reducing Consolidated Net Income for such period which did not or will not
require a cash settlement in such period or any future period:   
$                    

 

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      6.    minus all items increasing Consolidated Net Income for such
Cumulative Period which did not or will not result in a cash settlement in such
period or any future period, including any gain from the sale of assets:   
$                              7.    Consolidated EBITDA (total of lines 1-6):
   $                           Minimum Required:            $3,600,000 for the
fiscal quarter ending on September 30, 2010            

$9,400,000 for the cumulative two fiscal quarters ending

on December 31, 2010

  

  

        

$18,500,000 for the cumulative three fiscal quarters ending

on March 31, 2011

  

  

VII.    Section 6.17(g) – Rental and Operating Lease Expense       A.    Rental
and operating lease expense for the four consecutive fiscal quarters ending on
the Statement Date:    $                           B.    Total revenue for the
four consecutive fiscal quarters ending on the Statement Date:   
$                           C.    Ratio (Line VII.A ÷ Line VII.B)   
                           Maximum Permitted:    6.00 % 

 

Page 17 – SEVENTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT