Exhibit 10.8
*** Certain information contained in this agreement, marked in brackets [***],
has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
FIFTH AMENDMENT TO
CREDIT AGREEMENT
Dated as of January 14, 2011
among
POWERSECURE INTERNATIONAL, INC.,
as the Borrower,
CITIBANK, N.A.,
as Administrative Agent and Co-Syndication Agent
BRANCH BANKING AND TRUST COMPANY,
as Documentation Agent
and
The Other Lenders Party Hereto
CITIBANK, N.A.
Sole Bookrunner

 

 

--------------------------------------------------------------------------------

 

FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Fifth Amendment”), dated as of
January 14, 2011, 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, SunTrust Bank and the Administrative Agent are
parties to that certain Credit Agreement, dated as of August 23, 2007, as
amended by that certain First Amendment to Credit Agreement, dated as of
January 17, 2008, that certain Second Amendment to Credit Agreement, dated as of
April 18, 2008, that certain Third Amendment to Credit Agreement, dated as of
November 12, 2008, and that certain Fourth Amendment to Credit Agreement, dated
as of November 9, 2010 (said Credit Agreement, as amended, 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 amend the
Credit Agreement to, among other things, (i) remove SunTrust Bank (the “Exiting
Lender”) as a lender under the Credit Agreement and (ii) decrease the Aggregate
Revolving Commitments to $25,000,000.
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 defined
terms “Cash Reserve”, “Fifth Amendment Effective Date”, and “Southern Flow
Disposition” thereto in proper alphabetical order:
“Cash Reserve” means Cash and Cash Equivalents on deposit with, or in possession
of, the Administrative Agent and not subject to any Lien or restriction other
than a Lien in favor of the Administrative Agent.
“Fifth Amendment Effective Date” means the date that all conditions of
effectiveness set forth in Section 3 of the Fifth Amendment to Credit Agreement,
dated as of January 14, 2011, among the Borrower, the Lenders party thereto and
the Administrative Agent are satisfied.
“Southern Flow Disposition” means the sale by the Borrower of 100% of the
outstanding Equity Interests of Southern Flow Companies, Inc., a Delaware
corporation (“Southern Flow”), pursuant to that certain Purchase and Sale
Agreement, dated as of December 30, 2010, among Zedi USA Inc., a Delaware
corporation, Zedi Inc., a Canadian corporation, Southern Flow and the Borrower
for an aggregate consideration of not less than $15,500,000, subject to the
“Working Capital Adjustment” as provided for and defined in the Purchase and
Sale Agreement.

 

 

--------------------------------------------------------------------------------

 

(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 Fifth Amendment Effective Date, are $25,000,000.
(c) Section 4.02 of the Credit Agreement is hereby amended by adding a new
subsection (e) thereto to read as follows:
(e) After giving effect to any proposed Credit Extension prior to April 1, 2012,
the Cash Reserve shall not be less than 65% of the Total Revolving Outstandings.
(d) Section 5.13 of the Credit Agreement is hereby amended by amending the first
sentence thereof to read as follows:
As of the Fifth Amendment Effective Date, the Borrower has no Subsidiaries other
than those specifically disclosed in Part (a) of Schedule 5.13, and all of the
outstanding Equity Interests in such Subsidiaries have been validly issued, are
fully paid and non-assessable and are owned by a Loan Party in the amounts
specified in Part (a) of Schedule 5.13.
(e) Section 7.12(a) of the Credit Agreement is hereby amended to read as
follows:
(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio as of
the end of any Fiscal Quarter of the Borrower commencing on and after March 31,
2012 to be less than 1.25 to 1.00.
(f) Section 7.12(b) of the Credit Agreement is hereby amended to read as
follows:
(b) Leverage Ratio. Permit the Leverage Ratio as of the end of any Fiscal
Quarter commencing on and after March 31, 2012 to exceed 3.25 to 1.00.
(g) Section 7.12(d) of the Credit Agreement is hereby amended to read as
follows:
(d) Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth as
of the end of any Fiscal Quarter after December 31, 2010 to be less than the sum
of (i) $62,000,000, plus (ii) an amount equal to 50% of Consolidated Net Income
earned in each Fiscal Year ending after December 31, 2010 (with no reduction for
any net loss in any such Fiscal Year), which shall be added after the completion
of each Fiscal Year, plus (iii) an amount equal to 100% of the aggregate
increases in Shareholders’ Equity of the Borrower and its Subsidiaries after
December 31, 2009 by reason of the issuance and sale of Equity Interests of the
Borrower or any Subsidiary (other than issuances to the Borrower or a
wholly-owned Subsidiary), including upon any conversion of debt securities of
the Borrower into such Equity Interests, minus (iv) the amount of any non-cash
charges or losses after December 31, 2009 which do not subsequently represent a
cash charge or loss, which shall be deducted as of the Fiscal Quarter in which
they are incurred.

 

2

--------------------------------------------------------------------------------

 

(h) Section 7.12 of the Credit Agreement is hereby amended by adding a new
subsection (f) thereto to read as follows:
(f) Liquidity. Permit the Cash Reserve at any time prior to April 1, 2012 to be
less than 65% of the Total Revolving Outstandings.
(i) Schedule 2.01 to the Credit Agreement is hereby amended to be in the form of
Schedule 2.01 to this Fifth Amendment and the Revolving Commitment and Revolving
Pro Rata Share of each Lender after giving effect to this Fifth Amendment is set
forth on Schedule 2.01.
(j) Schedule 5.13 to the Credit Agreement is hereby amended to be in the form of
Schedule 5.13 to this Fifth Amendment.
(k) The Compliance Certificate is hereby amended to be in the form of Exhibit E
attached to this Fifth Amendment.
2. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof, the
Borrower represents and warrants that, as of the Fifth Amendment Effective Date:
(a) the representations and warranties contained in the Credit Agreement and the
other Loan Documents are true and correct on and as of the Fifth Amendment
Closing Date 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;
(c) (i) the Borrower has full power and authority to execute and deliver this
Fifth Amendment, the replacement Revolving Loan Note payable to the order of
Citibank in the amount of its Revolving Commitment as amended hereby and the
replacement Revolving Loan Notes payable to the order of Branch Banking and
Trust Company (collectively, the “New Notes”), (ii) this Fifth Amendment and the
New Notes have been duly executed and delivered by the Borrower, and (iii) this
Fifth Amendment, the New 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 Fifth Amendment, the
New 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 it property is
subject; and

 

3

--------------------------------------------------------------------------------

 

(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 Fifth Amendment or the New Notes or (ii) the acknowledgement by each
Guarantor of this Fifth Amendment.
3. CONDITIONS TO EFFECTIVENESS. All provisions of this Fifth Amendment shall be
effective upon satisfaction or completion of the following:
(a) the Administrative Agent shall have received counterparts of this Fifth
Amendment executed by the Lenders and acknowledged by SunTrust Bank for the
purposes of Section 5 of this Fifth Amendment only;
(b) the Administrative Agent shall have received counterparts of this Fifth
Amendment executed by the Borrower and acknowledged by each Guarantor;
(c) the Administrative Agent shall have received an opinion of the Borrower’s
counsel, in form and substance satisfactory to the Administrative Agent, with
respect to matters set forth in Sections 2(c), (d), and (e) of this Fifth
Amendment;
(d) the Administrative Agent shall have received the duly executed New Notes;
(e) the Southern Flow Disposition shall have occurred;
(f) SunTrust Bank shall have received payment in full in immediately available
funds all amounts due and owing to it under the Credit Agreement; and
(g) 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.
4. EXITING LENDER. Upon satisfaction of the conditions of effectiveness set
forth in Section 3 of this Fifth Amendment, SunTrust Bank shall (a) not (i) be a
Lender under the Credit Agreement or (ii) have any rights or obligations with
respect to being a Lender, except for those that expressly survive termination
of the Credit Agreement or termination of any Commitments thereunder and
(b) mark its Revolving Loan Note “PAID IN FULL”, and promptly return its
Revolving Loan Note to the Borrower.
5. PURCHASE BY LENDERS. Simultaneously with the satisfaction of conditions of
effectiveness set forth in Section 3 of this Fifth Amendment, to the extent
necessary, each Lender shall purchase or sell (as the case may be), without
recourse, an amount of Revolving Loans and L/C Obligations outstanding such
that, after giving effect to this Fifth Amendment, the amount of each Lender’s
Revolving Commitment that has been utilized will be equal to its Revolving Pro
Rata Share as amended by this Fifth Amendment. If, as a result of such purchase,
any Lender incurs any funding loss in respect of a Eurodollar Rate Loan, the
Borrower agrees to compensate such Lender as provided in Section 3.05 of the
Credit Agreement.

 

4

--------------------------------------------------------------------------------

 

6. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Fifth 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.
7. 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 Fifth 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).
8. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor
(a) acknowledges, consents and agrees to the execution, delivery and performance
by the Borrower of this Fifth 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 Fifth Amendment or any of
the provisions contemplated herein and (ii) cover the Aggregate Revolving
Commitments as increased by this Fifth 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.
9. EXECUTION IN COUNTERPARTS. This Fifth 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 Fifth 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.
10. GOVERNING LAW; BINDING EFFECT. This Fifth 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 Fifth Amendment or any other Loan Document, and any prohibited
assignment shall be null and void.
11. HEADINGS. Section headings in this Fifth Amendment are included herein for
convenience of reference only and shall not constitute a part of this Fifth
Amendment for any other purpose.

 

5

--------------------------------------------------------------------------------

 

12. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FIFTH 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

 

6

--------------------------------------------------------------------------------

 

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

            POWERSECURE INTERNATIONAL, INC.
      By:   /s/ Christopher T. Hutter         Christopher T. Hutter       
Executive Vice President, Chief Financial Officer and Assistant Secretary     

Signature Page

 

 

--------------------------------------------------------------------------------

 

            CITIBANK, N.A., as Administrative Agent and Lender
      By:   /s/ Gary D. Pitcock         Gary D. Pitcock        Vice President   
 

Signature Page

 

 

--------------------------------------------------------------------------------

 

            BRANCH BANKING AND TRUST COMPANY, as Lender
      By:   /s/ Stephen G. Bullard         Name:   Stephen G. Bullard       
Title:   SVP     

Signature Page

 

 

--------------------------------------------------------------------------------

 

              ACKNOWLEDGED AND AGREED FOR
PURPOSES OF SECTION 4 ONLY:
SUNTRUST BANK    
 
            By:   /s/ J. Lance Walton              
 
  Name:   J. Lance Walton    
 
  Title:   Senior Vice President    

Signature Page

 

 

--------------------------------------------------------------------------------

 

*** Certain information contained in this agreement, marked in brackets [***],
has been omitted and filed separately with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions pursuant to Rule 24b-2 of the Securities Exchange Act of 1934,
as amended.
ACKNOWLEDGED AND AGREED:
POWERSECURE, INC.
POWERSERVICES, INC.
ENERGYLITE, INC.
UTILITYENGINEERING, INC.
UTILITYDESIGN, INC.
WATERSECURE HOLDINGS, INC. (f/k/a Marcum Gas Transmission, Inc.)
REID’S TRAILER, INC.
EFFICIENTLIGHTS, LLC
POWERPACKAGES, LLC
MARCUM GAS METERING, INC. (f/k/a Metretek, Incorporated)
INNOVATIVE ELECTRONIC SOLUTIONS LIGHTING, LLC
***

         
By:
  /s/ Christopher T. Hutter    
 
       
 
  Christopher T. Hutter    
 
  Chief Financial Officer for all    

Signature Page

 

 

--------------------------------------------------------------------------------

 

SCHEDULE 2.01
REVOLVING COMMITMENTS
AND REVOLVING PRO RATA SHARES

                      Revolving     Revolving   Lender   Commitment     Pro Rata
Share  
 
               
Citibank, N.A.
  $ 16,250,000       65.00 %
Branch Banking and Trust Company
  $ 8,750,000       35.00 %
 
               
Total
  $ 25,000,000       100.00 %

Schedule 2.01

 

 

--------------------------------------------------------------------------------

 

***Certain information contained in this agreement, marked in brackets [***],
has been omitted and filed with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions
pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.
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
EfficientLights, LLC
    —     100% owned
PowerPackages, LLC
    —     100% owned
Innovative Electronic Solutions Lighting, LLC
    —     66.7% owned
***
    —     100% owned
 
               
Marcum Gas Metering, Inc. (f/k/a Metretek, Incorporated)
    —     100% owned
 
               
Marcum Gas Transmission, Inc.
    —     100% owned

Note: Does not include Inactive Subsidiaries listed on Schedule 1.01
Part (b): Other Equity Investments
Marcum Midstream 1995-2 Business Trust
Schedule 5.13

 

 

--------------------------------------------------------------------------------

 

EXHIBIT E
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 Credit Agreement, dated as of August 23, 2007
(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.]
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 E - Page 1

--------------------------------------------------------------------------------

 

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

            POWERSECURE INTERNATIONAL, INC.
      By:           Name:           Title:      

 

Exhibit E - Page 2

--------------------------------------------------------------------------------

 

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 commencing on and after March 31, 2012].
       
 
       
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 and
without duplication, non-recurring charges consisting of Founders Severance
Payments and relocation expenses of not to exceed $14,200,000 in aggregate
amount:
  $                       
 
       
7. 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:
  $                       
 
       
8. To the extent included in calculating such Consolidated Net Income,
Consolidated Interest Income for Subject Period:
  $                       
 
       
9. To the extent included in calculating such Consolidated Net Income, all
non-cash items increasing Consolidated Net Income for Subject Period:
  $                       
 
       
10. Consolidated EBITDA (Lines I.A.1. + 2. + 3. + 4. + 5. + 6. - 7. - 8. - 9.):
  $                       

 

Exhibit E

--------------------------------------------------------------------------------

 

         
B. Consolidated Lease Expense for Subject Period:
  $                       
 
       
C. Taxes based on income and paid in cash (net of tax refunds) for Subject
Period:
  $                       
 
       
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 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.10. + 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. Section 7.12(b) — Leverage Ratio [To be calculated for each Fiscal Quarter
commencing on and after March 31, 2012].
       
 
       
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:
  $                       
 
       
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:
  $                       

 

Exhibit E

--------------------------------------------------------------------------------

 

         
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. Consolidated EBITDA for Subject Period:
       
 
       
1. Consolidated EBITDA for Subject Period (See Line I.A.10.):
  $                       
 
       
C. Leverage Ratio (Line II.A.7. ¸ Line II.B.1.):
  _____ to 1.00
 
       
Maximum permitted — See Section 7.12(b) of the Agreement
    3.25 to 1.00  
 
       
III. Section 7.12(c) — Asset Coverage Ratio.
       
 
       
A. 80% of Book Value of Accounts on the determination date:
  $                       
 
       
B. 60% of Book Value of Inventory on the determination date:
  $                       
 
       
C. 50% of Book Value of Net Fixed Assets on the determination date:
  $                       
 
       
D. Consolidated Funded Indebtedness (See Line II.A.7.):
  $                       
 
       
E. Outstanding Term Loans on the determination date:
  $                       
 
       
F. Minimum Asset Coverage Ratio (Lines III.A. + III.B. + III.C.) ¸ (Lines III.D.
— III.E.):
  _____ to 1.00
 
       
Minimum required — See Section 7.12(c) of the Agreement
    1.25 to 1.00  
 
       
IV. Section 7.12(d) — Consolidated Tangible Net Worth.
       
 
       
A. Consolidated Tangible Net Worth:
  $                       
 
       
B. Minimum Consolidated Tangible Net Worth:
       
 
       
1. $62,000,000:
  $                       
 
       
2. 50% of Consolidated Net Income for each Fiscal Year beginning with each
Fiscal Year after December 31, 2010 (with no reduction for any net loss in any
such Fiscal Year):
  $                       
 
       
3. 100% of the aggregate increases in Shareholders’ Equity after December 31,
2009 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 December 31, 2009 which do not subsequently
represent a cash charge or loss:
  $                       
 
       
5. Minimum Consolidated Tangible Net Worth (Lines IV.B.1. + 2. + 3. - 4.:
  $                       

 

Exhibit E

--------------------------------------------------------------------------------

 

         
V. Section 7.12(e) — Debt to Worth Ratio.
       
 
       
A. Total Liabilities at Financial Statement Date:
  $                       
 
       
B. Consolidated Tangible Net Worth at Financial Statement Date
  $                       
 
       
C. Debt to Worth Ratio (Line V.A. ÷ Line V.B.):
    _____ to 1.00  
 
       
Maximum permitted — See Section 7.12(e) of the Agreement
    1.50 to 1.00  
 
       
VI. Section 7.12(f) — Liquidity [In effect prior to April 1, 2012].
       
 
       
A. Cash Reserve at Financial Statement Date:
  $                       
 
       
B. Total Revolving Outstandings at Financial Statement Date:
  $                       
 
       
C. Liquidity Ratio: (Line VI.A. ÷ Line VI.B):
  $                       
 
       
Minimum permitted — see Section 7.12(f) of the Agreement:
    65 %
 
       
For purposes hereof, “Subject Period” is the period of four consecutive Fiscal
Quarters ending on the Financial Statement Date.

 

Exhibit E