Exhibit 10.7





Exhibit 10.7




***  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.



FOURTH AMENDMENT TO

CREDIT AGREEMENT




Dated as of November 9, 2010




among




POWERSECURE INTERNATIONAL, INC.,

as the Borrower,




CITIBANK, N.A.,

as Administrative Agent and Co-Syndication Agent




SUNTRUST BANK,

as Co-Syndication Agent




BRANCH BANKING AND TRUST COMPANY,

as Documentation Agent




and




The Other Lenders Party Hereto




CITIBANK, N.A.

Sole Bookrunner



 


 









 







FOURTH AMENDMENT TO CREDIT AGREEMENT




THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this “Fourth Amendment”), dated as of
November 9, 2010, among POWERSECURE INTERNATIONAL, INC., a Delaware corporation (the
“Borrower”), CITIBANK, N.A., in its capacity as a lender party to the Credit Agreement
defined below (“Citibank”), SUNTRUST BANK, in its capacity as a Lender (as defined in the
Credit Agreement) (“SunTrust”) and BRANCH BANKING AND TRUST COMPANY, in its capacity as a
Lender (as defined in the Credit Agreement) (“BB&T”), Citibank, SunTrust and BB&T are
hereby collectively referred as 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 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, and that certain Third Amendment to Credit Agreement, dated as of
November 12, 2008 (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 make amendments to the
Credit Agreement.



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) The definition of “Applicable Rate” set forth in Section 1.01 of the
Credit Agreement is hereby amended to read as follows:




“Applicable Rate” means the following percentages per annum, based upon the
Leverage Ratio as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.02(a):




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Alternate	 
	 	 	 	 	 	 	 	 	 	 	Eurodollar	 	 	Base Rate for	 
	 	 	 	 	 	 	 	 	 	 	Rate for	 	 	Revolving	 
	 	 	 	 	 	 	Revolving	 	 	Revolving and	 	 	and Term	 
	Pricing Level	 	 	Leverage Ratio	 	Commitment Fee	 	 	Term Loans	 	 	Loans	 
	I	 	 	Less than 1.25 to 1.00
	 	 	0.375	 	 	 	2.000	 	 	 	0.250	 
	II	 	Greater than or equal to 1.25 to 1.00 but less than 2.25 to 1.00
	 	 	0.400	 	 	 	2.250	 	 	 	0.500	 
	III	 	Greater than or equal to 2.25 to 1.00 but less than 2.75 to 1.00
	 	 	0.450	 	 	 	2.750	 	 	 	1.000	 
	IV	 	Greater than or equal to 2.75 to 1.00
	 	 	0.5125	 	 	 	3.250	 	 	 	1.500	 





 


 









 






Any increase or decrease in the Applicable Rate resulting from a change in the Leverage
Ratio shall become effective as of the first Business Day immediately following the date a
Compliance Certificate is delivered for any Fiscal Quarter pursuant to
Section 6.02(a); provided, however, that if a Compliance Certificate is not
delivered when due in accordance with such Section 6.02(a), then Pricing Level IV
shall apply as of the first Business Day after the date on which such Compliance Certificate
was required to have been delivered and shall remain in effect until the first Business Day
immediately following the date such Compliance Certificate is actually delivered to the
Administrative Agent. Notwithstanding the foregoing, the Applicable Rate in effect from and
after the Fourth Amendment Closing Date through and including the date the Compliance
Certificate is delivered pursuant to Section 6.02(a) for the Fiscal Quarter ending
December 31, 2010 shall be Level I.




In the event that any financial statement delivered pursuant to Section 6.01(a) or
6.01(b) or any Compliance Certificate delivered pursuant to Section 6.02(a) is shown
to be inaccurate (regardless of whether this Agreement or the Commitments are in effect when
such inaccuracy is discovered), and such inaccuracy, if corrected, would have lead to a
higher Applicable Rate for any period (an “Applicable Period”) than the Applicable
Rate applied for such Applicable Period, then (i) the Borrower shall immediately deliver to
the Administrative Agent a correct Compliance Certificate for such Applicable Period,
(ii) the Applicable Rate shall be determined using the Pricing Level applicable for such
Applicable Period based upon the corrected Compliance Certificate, and (iii) the Borrower
shall immediately pay to the Administrative Agent the accrued additional interest and fees
owing as a result of such increased Applicable Rate for such Applicable Period, which
payment shall be promptly applied by the Administrative Agent in accordance with the terms
hereof. This paragraph shall not limit the rights of the Administrative Agent and the
Lenders under Section 2.08 and Article VIII and other provisions of this
Agreement. The obligations of the Borrower under this paragraph shall survive termination
of the Commitments and the repayment of all other Obligations hereunder.


 


2









 





(b) 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) November 12, 2013 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.



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




“Term Maturity Date” means (a) November 12, 2015, 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).



(d) Section 1.01 of the Credit Agreement is hereby amended by adding the defined term
“Fourth Amendment Closing Date” in proper alphabetical order to read as follows:




“Fourth Amendment Closing Date” means the date that all conditions of
effectiveness set forth in Section 4 of the Fourth Amendment to Credit Agreement,
dated as of November 9, 2010, among the Borrower, the Lenders party thereto and the
Administrative Agent are satisfied.




(e) Section 2.02(a) of the Credit Agreement is hereby amended to read as follows:




(a) The Borrower may, by notice to the Administrative Agent (who shall promptly notify
the Lenders) not later than 45 days prior to November 12, 2013, elect to convert the portion
of the aggregate amount of Revolving Loans outstanding on November 12, 2013 (not to exceed
the PowerSecure Recurring Revenue Project Capital Allowance as of such date), into term
loans (“Term Loans”) in such aggregate amount. Term Loans may not be repaid and
then reborrowed.




(f) Section 7.02(k) of the Credit Agreement is hereby amended to read as follows:




(k) Investments in the form of Permitted Acquisitions; provided,
however, (i) the aggregate Acquisition Consideration for any Permitted Acquisition
shall not exceed $10,000,000 and (ii) the aggregate Acquisition Consideration for all
Permitted Acquisitions made after November 9, 2010 shall not exceed $20,000,000.




(g) 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 to be less than 1.25 to 1.00.




 


3









 






*** 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.



(h) 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 to be less than the sum of (i) $55,000,000, 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.



(i) The Compliance Certificate is hereby amended to be in the form of Exhibit E
attached to this Fourth Amendment.



2. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof, the Borrower
represents and warrants that, as of the Fourth Amendment Closing 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 Fourth 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 Fourth
Amendment, (ii) this Fourth Amendment has been duly executed and delivered by the Borrower, and
(iii) this Fourth Amendment 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 Fourth Amendment 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;



(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


 


4









 





*** 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.



(f) execution, delivery or performance by the Borrower, of this Fourth Amendment or (ii) the
acknowledgement by each Guarantor of this Fourth Amendment; and



(g) [***], a Subsidiary of PowerSecure, Inc., has been inactive since August 6, 2010, the date
of its incorporation.



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



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



(b) the Administrative Agent shall have received counterparts of this Fourth 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 Fourth Amendment;



(d) the Administrative Agent shall have received in immediately available funds, for the
account of each Lender in connection with this Fourth Amendment, a fee in an amount equal to the
product of (i) 0.20% and (ii) such Lender’s Revolving Commitment;



(e) the documents required to be delivered pursuant to Section 6.14 of the Credit
Agreement with respect to [***] shall have been delivered; and



(f) 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. REFERENCE TO THE CREDIT AGREEMENT.



(a) Upon the effectiveness of this Fourth 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.



5. 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 Fourth 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).


 


5









 





6. GUARANTOR’S ACKNOWLEDGMENT. By signing below, each Guarantor (a) acknowledges,
consents and agrees to the execution, delivery and performance by the Borrower of this Fourth
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 Fourth Amendment
or any of the provisions contemplated herein and (ii) cover the Aggregate Revolving Commitments as
increased by this Fourth 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.



7. EXECUTION IN COUNTERPARTS. This Fourth 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 Fourth 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.



8. GOVERNING LAW; BINDING EFFECT. This Fourth 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 Fourth Amendment or any other Loan Document, and any prohibited assignment shall
be null and void.



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



10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS FOURTH 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 Fourth Amendment as of the date
first above written.



	 	 	 	 	 
	 	POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	/s/ Christopher T. Hutter
 	 
	 	 	Christopher T. Hutter 	 
	 	 	Vice President, Chief Financial Officer and 

Secretary 	 



Signature Page




 


 









 





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

 	 
	 	By:  	/s/ Gary Pitcock
 	 
	 	 	Gary D. Pitcock 	 
	 	 	Vice President 	 
	 	 	 	 	 
	 	SUNTRUST BANK, as Lender

 	 
	 	By:  	/s/ J. Lance Walton
 	 
	 	 	Name:  	J. Lance Walton 	 
	 	 	Title:  	Senior Vice President 	 
	 	 	 	 	 
	 	BRANCH BANKING AND TRUST COMPANY, 
as Lender

 	 
	 	By:  	Steven G. Ballard
 	 
	 	 	Name:  	Steven G. Ballard 	 
	 	 	Title:  	SVP 	 



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

SOUTHERN FLOW COMPANIES, INC.

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




 


 









 







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.



 


Exhibit  E - Page 1









 





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 2









 







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



	 	 	 	 	 
	 	POWERSECURE INTERNATIONAL, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 



 


Exhibit  E - Page 3









 







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.
	 	 	 	 
	 
	 	 	 	 
	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.
	 	 	 	 
	 
	 	 	 	 
	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. $55,000,000:
	 	$	                    	 
	 
	 	 	 	 
	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(d) of the Agreement
	 	 	1.50 to 1.00	 






For purposes hereof, “Subject Period” is the period of four consecutive Fiscal Quarters ending on
the Financial Statement Date.


 


Exhibit E