Exhibit 10.5

SIXTH AMENDMENT TO

AMENDED AND RESTATED CREDIT AGREEMENT

THIS SIXTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this “Sixth
Amendment”), dated as of November 3, 2015, among POWERSECURE INTERNATIONAL,
INC., a Delaware corporation (the “Borrower”), the lenders as identified as
Lenders on the signature pages hereof (collectively, the “Lenders”) and
CITIBANK, N.A., in its capacity as Administrative Agent (the “Administrative
Agent”).

BACKGROUND

A. The Borrower, the Lenders, and the Administrative Agent are parties to that
certain Amended and Restated Credit Agreement, dated as of December 21, 2011
(said Credit Agreement, as amended and restated, the “Credit Agreement”; the
terms defined in the Credit Agreement and not otherwise defined herein shall be
used herein as defined in the Credit Agreement).

B. The Borrower, the Lenders and the Administrative Agent desire to make certain
amendments to the Credit Agreement and waive an Event of Default.

NOW, THEREFORE, in consideration of the covenants, conditions and agreements
hereafter set forth, and for other good and valuable consideration, the receipt
and adequacy of which are all hereby acknowledged, the parties hereto covenant
and agree as follows:

1. AMENDMENTS.

(a) Section 1.01 of the Credit Agreement is hereby amended by adding the
following defined terms thereto in proper alphabetical order:

“New Revolving Lender” has the meaning specified in Section 2.17.

“Sixth Amendment” means that certain Sixth Amendment to Amended and Restated
Credit Agreement, dated as of November 3, 2015, among the Borrower, the Lenders
and the Administrative Agent.

“Sixth Amendment Closing Date” means the date that all conditions to
effectiveness of the Sixth Amendment are satisfied.

(b) The definition of “Aggregate Revolving Commitments” set forth in
Section 1.01 of the Credit Agreement is hereby amended to read as follows:

“Aggregate Revolving Commitments” means the Revolving Commitments of all
Lenders, which, as of the Sixth Amendment Closing Date, are $40,000,000.

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(c) The definition of “Revolving Commitment Increase Effective Date” set forth
in Section 1.01 of the Credit Agreement is hereby amended to read as follows:

“Revolving Commitment Increase Effective Date” has the meaning specified in
Section 2.17.

(d) The definition of “Revolving Maturity Date” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

“Revolving Maturity Date” means (a) June 30, 2020 or (b) such earlier date as
the (i) the Obligations become due and payable pursuant to this Agreement
(whether by acceleration, prepayment in full, scheduled reduction or otherwise)
or (ii) there shall exist an Event of Default under Section 8.01(f) of this
Agreement.

(e) The definition of “Term B Maturity Date” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:

“Term B Maturity Date” means (a) June 30, 2020 or (b) such earlier date as
(i) the Obligations become due and payable pursuant to this Agreement (whether
by acceleration, prepayment in full, scheduled reduction or otherwise) or
(ii) there shall exist an Event of Default under Section 8.01(f).

(f) Section 2.08(c) of the Credit Agreement is hereby amended to read as
follows:

(c) To the extent not otherwise required to be paid earlier as provided herein,
the Borrower shall repay the aggregate principal amount of the Term B Loans
outstanding on the following dates in amounts determined by multiplying the
percentage set forth opposite such dates times the initial principal amount of
the Term B Loans (which amounts may be reduced as a result of the application of
prepayments of the Term B Loans in accordance with the order of priority set
forth in Section 2.06):

 

Date

   % of Initial Aggregate Principal Amount  

March 31, 2012

     1.667 % 

June 30, 2012

     1.667 % 

September 30, 2012

     1.667 % 

December 31, 2012

     1.667 % 

March 31, 2013

     1.667 % 

June 30, 2013

     1.667 % 

September 30, 2013

     1.667 % 

December 31, 2013

     1.667 % 

March 31, 2014

     1.667 % 

June 30, 2014

     1.667 % 

September 30, 2014

     1.667 % 

December 31, 2014

     1.667 % 

 

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Date

   % of Initial Aggregate Principal Amount  

March 31, 2015

     1.667 % 

June 30, 2015

     1.667 % 

September 30, 2015

     1.667 % 

December 31, 2015

     1.667 % 

March 31, 2016

     1.667 % 

June 30, 2016

     1.667 % 

September 30, 2016

     1.667 % 

December 31, 2016

     1.667 % 

March 31, 2017

     1.667 % 

June 30, 2017

     1.667 % 

September 30, 2017

     1.667 % 

December 31, 2017

     1.667 % 

March 31, 2018

     1.667 % 

June 30, 2018

     1.667 % 

September 30, 2018

     1.667 % 

December 31, 2018

     1.667 % 

March 31, 2019

     1.667 % 

June 30, 2019

     1.667 % 

September 30, 2019

     1.667 % 

December 31, 2019

     1.667 % 

March 31, 2020

     1.667 % 

June 30, 2020

    
 
  The aggregate principal amount of all
Term B Loans outstanding on such
date   
  
  

(g) Article II of the Credit Agreement is hereby amended by adding the following
new Section 2.17 thereto to read as follows:

Section 2.17 Increase in Aggregate Revolving Commitments.

(a) Request for Increase. Provided there exists no Default, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower may
from time to time, request an increase in the Aggregate Revolving Commitments by
an amount not exceeding $20,000,000; provided that any such request shall be in
a minimum amount of $5,000,000 and in whole multiples of $2,000,000 in excess
thereof (or, if less,

 

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the entire remaining amount of the increase provided for in this Section 2.17).
At the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Revolving
Lender is requested to respond (which shall in no event be less than ten
(10) Business Days from the date of delivery of such notice to the Revolving
Lenders).

(b) Lender Elections to Increase. Each Revolving Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Revolving Commitment and, if so, whether by an amount equal to,
greater than, or less than its Revolving Pro Rata Share of such requested
increase. Any Revolving Lender not responding within such time period shall be
deemed to have declined to increase its Revolving Commitment.

(c) Notification by Administrative Agent; Additional Revolving Lenders. The
Administrative Agent shall notify the Borrower and each Revolving Lender of the
Revolving Lenders’ responses to each request made hereunder. To achieve the full
amount of a requested increase, and subject to the approval of the
Administrative Agent, the L/C Issuer and the Swing Line Lender (such approval
not to be unreasonably withheld), the Borrower may also invite additional
Eligible Assignees to become Revolving Lenders pursuant to a joinder agreement
(“New Revolving Lenders”) in form and substance reasonably satisfactory to the
Administrative Agent and its counsel.

(d) Effective Date and Allocations. If the Aggregate Revolving Commitments are
increased in accordance with this Section 2.17, the Administrative Agent and the
Borrower shall determine the effective date (the “Revolving Commitment Increase
Effective Date”) and the final allocation of such increase. The Administrative
Agent shall promptly notify the Borrower and the Revolving Lenders and any New
Revolving Lenders of the final allocation of such increase and the Revolving
Commitment Increase Effective Date.

(e) Conditions to Effectiveness of Increase. As a condition precedent to such
increase, the Borrower shall deliver to the Administrative Agent a certificate
of the Borrower dated as of the Revolving Commitment Increase Effective Date (in
sufficient copies for each Lender) signed by a Responsible Officer of the
Borrower (i) certifying and attaching the resolutions adopted by the Borrower
approving or consenting to such increase, and (ii) certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained in Article V and the other Loan Documents (i) that contain a
materiality qualification, are true and correct, on and as of the Revolving
Commitment Increase Effective Date and (ii) that do not contain a materiality
qualification, are true and correct in all material respects, on and as of the
Revolving Commitment Increase Effective Date, and except that for purposes of
this Section, the representations and warranties contained in subsections
(a) and (b) of Section 5.05 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (B) both before and after giving effect to the increase in the
Aggregate Revolving Commitments, no Default exists. The Borrower shall prepay
any Revolving Loans outstanding on the Revolving Commitment Increase Effective
Date (and pay any additional amounts required pursuant to Section 3.05) to the
extent

 

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necessary to keep the outstanding Revolving Loans ratable with any revised
Revolving Pro Rata Shares arising from any non-ratable increase in the Aggregate
Revolving Commitments under this Section 2.17.

(f) Conflicting Provisions. This Section 2.17 shall supersede any provisions in
Section 2.13 or 10.01 to the contrary.

(h) Section 7.12(b) of the Credit Agreement is hereby amended to read as
follows:

(b) Debt to Capitalization Ratio. Permit the Debt to Capitalization Ratio at the
end of any Fiscal Quarter commencing on and after September 30, 2015 to exceed
0.25 to 1.00 at any time.

(i) Schedule 1.01 of the Credit Agreement is hereby amended to be in the form of
Schedule 1.01 attached to this Sixth Amendment.

(j) Schedule 2.01 of the Credit Agreement is hereby amended to be in the form of
Schedule 2.01 attached to this Sixth Amendment.

(k) Schedule 5.13 of the Credit Agreement is hereby amended to be in the form of
Schedule 5.13 attached to this Sixth Amendment.

(l) Exhibit G, the Compliance Certificate, is hereby amended to be in the form
of Exhibit G attached to this Sixth Amendment.

2. WAIVER. Subject to satisfaction of the conditions to effectiveness to this
Sixth Amendment set forth in Section 4 hereof, the Lenders hereby waive the
Event of Default that occurred under Section 8.01(c) of the Credit Agreement as
a result of the failure of the Borrower to cause 65% of the Equity Interests of
PowerSecure Canada Energy Services, Inc., a British Columbia company
(“PowerSecure Canada”), to be pledged to secure the Secured Obligations within
the time required by Section 6.14 of the Credit Agreement.

3. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof, the
Borrower represents and warrants that, as of the date hereof, and after giving
effect to the waiver provided in Section 2 hereof:

(a) the representations and warranties contained in the Credit Agreement and the
other Loan Documents are true and correct on and as of the date hereof as made
on and as of such date, 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 the representations
contained in subsections (a) and (b) of Section 5.05 of the Credit Agreement
shall be deemed to refer to the most recent statements furnish pursuant to
subsections (a) and (b), respectively, of Section 6.01 of the Credit Agreement;

(b) no event has occurred and is continuing which constitutes a Default or an
Event of Default;

 

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(c) (i) the Borrower has full power and authority to execute and deliver this
Sixth Amendment and the Revolving Loan Notes in the principal amount of each
Revolving Lender’s Revolving Commitment, as increased by this Sixth Amendment
(the “New Revolving Loan Notes”), (ii) this Sixth Amendment and the New
Revolving Loan Notes have been duly executed and delivered by the Borrower, and
(iii) this Sixth Amendment, the New Revolving Loan Notes and the Credit
Agreement, as amended hereby, constitute the legal, valid and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable Debtor Relief Laws
and by general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law) and except as rights to indemnity may be
limited by federal or state securities laws;

(d) neither the execution, delivery and performance of this Sixth Amendment, the
New Revolving Loan Notes or the Credit Agreement, as amended hereby, nor the
consummation of any transactions contemplated herein or therein, will violate
any Law or conflict with any Organization Documents of the Borrower, or any
indenture, agreement or other instrument to which the Borrower or any of its
property is subject; and

(e) no authorization, approval, consent, or other action by, notice to, or
filing with, any Governmental Authority or other Person not previously obtained
is required for (i) the execution, delivery or performance by the Borrower, of
this Sixth Amendment or the New Revolving Loan Notes or (ii) the acknowledgement
and reaffirmation by each Guarantor of this Sixth Amendment.

4. CONDITIONS TO EFFECTIVENESS. All provisions of this Sixth Amendment shall be
effective upon satisfaction or completion of the following:

(a) the Administrative Agent shall have received counterparts of this Sixth
Amendment executed by the Lenders;

(b) the Administrative Agent shall have received counterparts of this Sixth
Amendment executed by the Borrower and acknowledged by each Guarantor;

(c) the Administrative Agent shall have received the New Revolving Loan Notes
for each Lender executed by the Borrower;

(d) the Administrative Agent shall have received certified resolutions of the
Borrower authorizing the execution, delivery and performance by the Borrower of
this Sixth Amendment and the New Revolving Loan Notes;

(e) the Administrative Agent shall have received an original stock certificate
evidencing 65% of the Equity Interests of PowerSecure Canada issued in the name
of PowerSecure, Inc., together with an undated stock power with respect to such
Equity Interests executed by PowerSecure, Inc.;

(f) the Administrative Agent shall have received in immediately available funds
for the account of each Lender an amount equal to the product of (i) 0.25% and
(ii) the Outstanding Amount of the Term B Loans owed to each such Lender as of
the date of this Sixth Amendment;

 

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(g) the Administrative Agent shall have received in immediately available funds
for its own account such fee as agreed to be paid by the Borrower in a separate
letter agreement between Borrower and Administrative Agent in connection with
this Sixth Amendment; and

(h) the Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent and its counsel, such other documents,
certificates and instruments as the Administrative Agent shall require.

5. REFERENCE TO THE CREDIT AGREEMENT.

(a) Upon the effectiveness of this Sixth Amendment, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, or words of like import shall mean
and be a reference to the Credit Agreement, as affected and amended hereby.

(b) The Credit Agreement, as amended by the amendments referred to above, shall
remain in full force and effect and is hereby ratified and confirmed.

6. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all costs and
expenses of the Administrative Agent in connection with the preparation,
reproduction, execution and delivery of this Sixth Amendment and the other
instruments and documents to be delivered hereunder (including the reasonable
fees and out-of-pocket expenses of counsel for the Administrative Agent with
respect thereto).

7. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor
(a) acknowledges, consents and agrees to the execution, delivery and performance
by the Borrower of this Sixth Amendment, (b) acknowledges and agrees that its
obligations in respect of its Guaranty (i) are not released, diminished, waived,
modified, impaired or affected in any manner by this Sixth Amendment or any of
the provisions contemplated herein and (ii) cover the Guarantied Obligations (as
defined in its Guaranty) as increased by this Sixth Amendment, (c) ratifies and
confirms its obligations under its Guaranty, and (d) acknowledges and agrees
that it has no claims or offsets against, or defenses or counterclaims to, its
Guaranty.

8. REAFFIRMATION. By signing below, each Loan Party, (a) affirms that each of
the Liens granted in or pursuant to the Collateral Documents to which it is a
party are valid and subsisting and (b) agrees that (i) this Sixth Amendment
shall in no manner impair or otherwise adversely affect any of the Liens granted
in or pursuant to the Collateral Documents and (ii) the Collateral Documents
secure the Secured Obligations as increased by this Sixth Amendment.

9. EXECUTION IN COUNTERPARTS. This Sixth Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and
all of which when taken together shall constitute but one and the same
instrument. For purposes of this Sixth Amendment, a counterpart hereof (or
signature page thereto) signed and transmitted by any Person party hereto to the
Administrative Agent (or its counsel) by facsimile machine, telecopier or
electronic mail is to be treated as an original. The signature of such Person
thereon, for purposes hereof, is to be considered as an original signature, and
the counterpart (or signature page thereto) so transmitted is to be considered
to have the same binding effect as an original signature on an original
document.

 

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10. GOVERNING LAW; BINDING EFFECT. This Sixth Amendment shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state, provided that
each party shall retain all rights arising under federal law, and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that the Borrower may not assign any of its rights arising
from this Sixth Amendment or any other Loan Document, and any prohibited
assignment shall be null and void.

11. HEADINGS. Section headings in this Sixth Amendment are included herein for
convenience of reference only and shall not constitute a part of this Sixth
Amendment for any other purpose.

12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SIXTH AMENDMENT,
AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.

REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

 

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IN WITNESS WHEREOF, the parties hereto have executed this Sixth Amendment as of
the date first above written.

 

POWERSECURE INTERNATIONAL, INC. By:  

/s/ Eric Dupont

  Eric Dupont   Chief Financial Officer

Signature Page – Sixth Amendment

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CITIBANK, N.A., as Administrative Agent and Lender By:  

/s/ Gary D. Pitcock

  Gary D. Pitcock   Senior Vice President

Signature Page – Sixth Amendment

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BRANCH BANKING AND TRUST COMPANY, as Lender By:  

/s/ Steven G. Bullard

  Name: Steven G. Bullard   Title: Senior Vice President

Signature Page – Sixth Amendment

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ACKNOWLEDGED AND AGREED:

POWERSECURE, INC.

POWERSERVICES, INC.

ENERGYLITE, INC.

UTILITYENGINEERING, INC.

UTILITYDESIGN, INC.

REID’S TRAILER, INC.

INNOVATION ENERGIES, LLC

POWERSECURE SOLAR, LLC

SOLAIS LIGHTING, INC.

POWERSECURE LIGHTING, LLC

 

By:  

/s/ Eric Dupont

  Eric Dupont   Chief Financial Officer for all

Signature Page – Sixth Amendment

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SCHEDULE 1.01

INACTIVE SUBSIDIARIES

PowerPackages, LLC (Delaware limited liability company)

PowerSecure Haiti USA, Inc. (Delaware corporation)

WaterSecure Holdings, Inc. (Colorado corporation)

Schedule 1.01 – Sixth Amendment

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SCHEDULE 2.01

REVOLVING COMMITMENTS

AND REVOLVING PRO RATA SHARES

 

Lender

   Revolving
Commitment      Revolving
Pro Rata Share  

Citibank, N.A.

   $ 28,000,000         70.00 % 

Branch Banking and Trust Company

   $ 12,000,000         30.00 % 

Total

   $ 40,000,000         100.00 % 

Schedule 2.01 – Sixth Amendment

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SCHEDULE 5.13

SUBSIDIARIES AND OTHER EQUITY INVESTMENTS

 

Part (a): Subsidiaries       PowerSecure, Inc.    -    100% owned  
UtilityEngineering, Inc.    -    100% owned   PowerServices, Inc.    -    100%
owned   EnergyLite, Inc.    -    100% owned   Reid’s Trailer, Inc.    -    100%
owned   UtilityDesign, Inc.    -    100% owned   Innovation Energies, LLC    -
   100% owned   PowerSecure Solar, LLC    -    100% owned   Solais Lighting,
Inc.    -    100% owned   PowerSecure Lighting, LLC    -    100% owned

Note: Does not include Inactive Subsidiaries listed on Schedule 1.01

Part (b): Other Equity Investments

None.

Schedule 5.13 – Sixth Amendment

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EXHIBIT G

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date:                    

To: Citibank, N.A., as Administrative Agent under the Agreement defined below

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated
as of December 21, 2011 (as amended, extended, supplemented or otherwise
modified in writing from time to time, the “Agreement;” the terms defined
therein being used herein as therein defined), among PowerSecure International,
Inc. (the “Borrower”), the Lenders from time to time party thereto, and
Citibank, N.A., as Administrative Agent.

The undersigned Responsible Officer hereby certifies as of the date hereof that
                                 he/she is the of the Borrower, 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 for Fiscal Year-end financial statements]

1. Attached hereto as Schedule 1 are the Fiscal 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 date set forth above as the Financial Statement
Date, together with the report and opinion of an independent certified public
accountant required by such section. Such financial statements fairly present in
all material respects when considered in relation to the consolidated financial
statements of the Borrower and its Subsidiaries.

[Use following for Fiscal Quarter-end financial statements]

1. Attached hereto as Schedule 1 are the unaudited financial statements required
by Section 6.01(b) of the Agreement for the Fiscal Quarter of the Borrower ended
as of the date set forth above as the Financial Statement Date. Such financial
statements fairly present in all material respects when considered in relation
to the consolidated financial statements of the Borrower and its Subsidiaries.

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 the attached 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 [add, if applicable: except as hereinafter
listed], and to the best knowledge of the undersigned as of the date hereof no
Default or Event of Default under the Agreement has occurred and is continuing
as of the date hereof [add, if applicable: except the following list of each
Default or Event of Default under the Agreement, and its nature and status, that
has occurred and is continuing as of the date of this Certificate.]

 

Exhibit G - Page 1

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4. The financial covenant analyses and information set forth on Schedule 2
attached hereto are true and accurate on and as of the date set forth above as
the Financial Statement Date.

 

Exhibit G - Page 2

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

 

POWERSECURE INTERNATIONAL, INC.

By:

 

 

 

Name:

 

Title:

 

Exhibit G – Page 3

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

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

 

I.   Section 7.12(a) – Fixed Charge Coverage Ratio [To be calculated for each
Fiscal Quarter in which there is no Excess Cash]1.   A.   Consolidated EBITDA:  
    1.   Consolidated Net Income for Subject Period:   $                 2.   To
the extent involved in calculating such Consolidated Net Income and without
duplication, Consolidated Interest Charges:   $                 3.   To the
extent included in calculating such Consolidated Net Income and without
duplication, amount of taxes, based on or measured by income, deducted in
determining such Consolidated Net Income for Subject Period:   $                
4.   To the extent included in calculating such Consolidated Net Income and
without duplication, depreciation and amortization expense deducted in
determining such Consolidated Net Income for Subject Period:   $                
5.   To the extent included in calculating such Consolidated Net Income and
without duplication, all non-cash charges or losses which do not represent a
cash charge or loss for Subject Period or in a future period:   $              
  6.   To the extent included in calculating such Consolidated Net Income,
Federal, state, local and foreign income tax credits of the Borrower and its
Subsidiaries for Subject Period:   $                 7.   To the extent included
in calculating such Consolidated Net Income, Consolidated Interest Income for
Subject Period:   $                 8.   To the extent included in calculating
such Consolidated Net Income, all non-cash items increasing Consolidated Net
Income for Subject Period:   $            

 

1  (i) For the Fiscal Quarter ending September 30, 2014, the components of the
Fixed Charge Coverage Ratio shall be calculated only for such Fiscal Quarter
ending on such date, (ii) for the Fiscal Quarter ending December 31, 2014, the
components of the Fixed Charge Coverage Ratio shall be calculated for the period
of two consecutive Fiscal Quarters ending on such date and (iii) for the Fiscal
Quarter ending March 31, 2015, the components of the Fixed Charge Coverage Ratio
shall be calculated for the period of three consecutive Fiscal Quarters ending
on such date.

 

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    9.   Consolidated EBITDA (Lines I.A.1. + 2. + 3. + 4. + 5. - 6. - 7. - 8.):
  $               B.   Consolidated Lease Expense for Subject Period:  
$               C.   Taxes based on income and paid in cash (net of tax refunds)
for Subject Period but excluding cash taxes paid in respect of the Southern Flow
Disposition and the WaterSecure Disposition:   $               D.   Consolidated
Interest Charges (excluding, to the extent included in Consolidated Lease
Expense, the interest component of Capital Leases) for Subject Period:  
$               E.   Scheduled payments of principal of Consolidated Funded
Indebtedness (excluding, to the extent included in Consolidated Lease Expense,
the principal component of Capital Leases) for Subject Period:   $              
F.   Consolidated Lease Expense for Subject Period:   $               G.  
Restricted Payments (excluding repurchases of common Equity Interests pursuant
to Stock Repurchase Program) for Subject Period:   $               H.   During
Revolving Availability Period, an amount equal to the product of (x) 0.20 and
(y) the amount by which Total Revolving Outstandings exceeds $15,000,000 on the
Financial Statement Date:   $               I.   Fixed Charge Coverage Ratio
((Line I.A.9. + I.B. – I.C.) ÷ (Lines I.D. + I.E. + I.F. + I.G. + I.H., if
applicable)):            to 1.00   Minimum permitted – See Section 7.12(a) of
the Agreement   1.25 to 1.00 II.   Leverage Ratio [For purposes of determining
Applicable Rate].   A.   Consolidated Funded Indebtedness at Financial Statement
Date:     1.   all obligations for borrowed money and all obligations evidenced
by bonds, debentures, notes, loan agreements or other similar instruments:  
$                 2.   Non-contingent obligations outstanding in respect of
letters of credit (including standby and commercial), bankers’ acceptances, bank
guaranties, surety bonds or other similar instruments:   $            

 

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    3.   all obligations to pay the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business):
  $                 4.   indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed or is limited in recourse:  
$                 5.   Attributable Indebtedness in respect of Capital Leases
and Synthetic Lease Obligations:   $                 6.   Guarantees of
Indebtedness of types specified in Lines II.A.1., II.A.2., II.A.3., II.A.4. and
II.A.5. above:   $                 7.   Consolidated Funded Indebtedness  
$                   (Lines II.A.1. + 2. + 3. + 4. + 5. + 6.):     B.   Amount,
if any, by which unrestricted cash and Cash Equivalents at Financial Statement
Date exceeds $5,000,000:   $               C.   Line II.A.7. – Line II.B.  
$               D.   Consolidated EBITDA for Subject Period:     1.  
Consolidated EBITDA for Subject Period (See Line I.A.9.):   $               E.  
Leverage Ratio (Line II.C. ÷ Line II.D.1.):            to 1.00 III.   Section
7.12(b) – Debt to Capitalization Ratio.   A.   Consolidated Funded Indebtedness
at Financial Statement Date (Line II.A.7.):   $               B.   Total
Capitalization:     1.   Consolidated Funded Indebtedness at Financial Statement
Date (Line II.A.7.):   $                 2.   Shareholders’ Equity at Financial
Statement Date:   $                 3.   Total Capitalization (Lines III.B.1. +
III.B.2.):   $            

 

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  C.   Debt to Capitalization Ratio (Line III.A. ÷ Line III.B.3.):  
         to 1.00   Maximum permitted – See Section 7.12(b) of the Agreement  
0.25 to 1.00 IV.   Section 7.12(c) – Consolidated Net Worth.   A.   Consolidated
Net Worth:   $               B.   Minimum Consolidated Net Worth:       1.  
$142,066,409:   $                 2.   50% of Consolidated Net Income for each
Fiscal Year beginning with each Fiscal Year commencing with Fiscal Year ending
December 31, 2014 (with no reduction for any net loss in any such Fiscal Year):
  $                 3.   90% of the aggregate increases in Shareholders’ Equity
after Fourth Amendment Effective Date by reason of issuance and sale of Equity
Interests of the Borrower or any Subsidiary (other than issuances to the
Borrower or a wholly-owned Subsidiary):   $                 4.   Non-cash
charges or losses after Fourth Amendment Effective Date which do not
subsequently represent a cash charge or loss:   $                 5.   Minimum
Consolidated Net Worth (Lines IV.B.1. + 2. + 3. - 4.:   $             For
purposes hereof, “Subject Period” is the period of four consecutive Fiscal
Quarters ending on the Financial Statement Date.

 

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