Document:

EX-10.8

 

Exhibit 10.8

April 17, 2007

Mr. David J. Sibits

6333 Rockledge Dr.

Brecksville, Ohio 44141-1745

(440)838-1560

Dear Dave,

Please accept this letter as confirmation of CBIZ, Inc.’s (“CBIZ”) offer to you of employment as
Senior Vice President, Financial Services. As agreed, your compensation will include an initial
base salary at a rate of $425,000 per annum and an opportunity to earn a bonus in accordance with
the terms of the 2007 Executive Incentive Plan, a copy of which is attached. Under that Plan, your
position is designated as one of the two “Senior Vice President of Field Operations” posts.
Beginning in 2008, your base salary and bonus opportunity will be reviewed and may be adjusted from
time to time.

The Compensation Committee of the Board of Directors will be requested to grant to you options to
purchase 20,000 shares of CBIZ’s common stock at the NYSE closing price on the date of such grant
(the “Stock Options”). The Stock Options shall vest in equal 25% increments over four years,
beginning on the first anniversary of the date of the grant, and shall expire on the sixth
anniversary of the grant date. The Compensation Committee will also be asked to award you a grant
of 12,000 restricted shares (the “Restricted Shares”). The restrictions on the Restricted Shares
shall expire in equal 25% increments over four years, beginning on the first anniversary of the
date of the grant. The Restricted Shares shall be fully vested on the fourth anniversary of the
grant date. The vesting, termination, and other terms of the Stock Options and Restricted Shares
shall occur and exist pursuant to the terms and conditions described in the Amended and Restated
2002 Stock Incentive Plan, as the same may be amended from time to time.

As an employee of CBIZ you will be eligible for all benefits provided to all other full-time
associates having a similar position, responsibility, and tenure. Katy Gisztl will provide you
detailed information on the CBIZ benefits plan as a part of your orientation. You may call Katy at
(216) 525-1941 if you have any specific questions or concerns regarding benefits. As you know, in
the ordinary course of business, pay and benefits plans evolve as laws, employee, and/or business
needs change. If, in the future, it becomes necessary to change any of the benefit or compensation
plans currently in effect, these changes will apply to you as they do to other eligible employees.

This is an exempt position initially reporting to me in my capacity as President. Your offer of
employment with CBIZ is conditioned upon your execution and delivery to CBIZ of the enclosed
Confidentiality, Non-Solicitation, and Non-Competition Agreement and upon achieving successful
results in both the reference and background checks.

This letter and the Confidentiality, Non-Solicitation, and Non-Competition Agreement do not
constitute contracts of employment. As an employee of CBIZ you are an employee-at-will.

Please evidence your acceptance of this offer by executing this letter and the enclosed
Confidentiality, Non-Solicitation, and Non-Competition Agreement and returning the original to Katy
Gisztl at your earliest convenience.

 

 

I am truly pleased to have you as part of our team and look forward to working with you. If there
is anything further I can do to assist you, please contact me at (216) 525-1999.

Welcome to CBIZ!

Sincerely,

Jerome P. Grisko, Jr.

Agreed to and accepted:

	 	 	 	 	 
	 

	 	 	 	 
	David J. Sibits

	 	Date
	 	 

Cc:     Personnel fileEX-10.13

 

Exhibit 10.13

CONTRIBUTION AGREEMENT

     THIS CONTRIBUTION AGREEMENT (this “Agreement”), dated as of [•] (the “Effective
Date”), is entered into by Holliday GP Corp., a corporation organized under the laws of
Delaware (“Holliday GP”), Holliday Fenoglio Fowler, L.P., a Texas limited partnership
(“HFF LP”) and HFF Securities L.P., a Delaware limited partnership (“HFFS”,
together with HFF LP, the “Partnerships”) on one hand and the signatory hereto (the
“Indemnitee”) on the other.

     WHEREAS, the Indemnitee currently serves as a member of the Board of Directors or as an
officer of HFF, Inc., a Delaware corporation (“HFF”);

     WHEREAS, HFF is a holding company and its sole assets are, through its wholly-owned subsidiary
HFF Partnership Holdings LLC (“Holdings LLC”), partnership units in the Partnerships and
all of the outstanding shares of Holliday GP;

     WHEREAS, HFF, after reasonable investigation, has determined that the liability insurance
coverage presently available to HFF may be inadequate in certain circumstances to cover all
possible exposure for which Indemnitee should be protected and HFF believes that the interests of
HFF and its stockholders would best be served by a combination of such insurance and the
indemnification by HFF of the directors and officers of HFF;

     WHEREAS, HFF’s Certificate of Incorporation requires HFF to indemnify its directors and
officers to the fullest extent permitted by the Delaware General Corporation Law (the
“Indemnification Obligations”). The Certificate of Incorporation also expressly provides
that the indemnification provisions set forth therein are not exclusive, and contemplate that
contracts may be entered into between HFF and its directors and officers with respect to
indemnification;

     WHEREAS, the Board of Directors has determined that the contractual provisions set forth
herein are not only reasonable and prudent but also promotes the best interests of HFF and its
stockholders;

     WHEREAS, HFF desires and has requested Indemnitee to serve or continue to serve as a director
or officer of HFF free from undue concern for unwarranted claims for damages arising out of or
related to such services to HFF; and

     WHEREAS, Indemnitee is willing to serve, continue to serve or to provide additional service
for or on behalf of HFF on the condition that he or she is ensured that HFF will possess the
resources of the Partnerships to meet the Indemnification Obligations if and when they arise;

 

 

     NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties,
covenants, agreements and conditions herein contained, and intending to be legally bound, the
parties hereto agree as follows:

     1.1. Distributions. To the extent funds are legally available for distribution, each
of the Partnerships hereby agrees and covenants to, and Holliday GP hereby agrees and covenants to
cause the Partnerships to, make distributions, in accordance with each of their respective
partnership agreements, to HFF, through Holdings LLC, sufficient in aggregate amount for HFF to
meet any and all of HFF’s Indemnification Obligations with respect to the Indemnitee as and when
such amounts are necessary.

     1.2. Other Agreements. Each of the Partnerships hereby agrees and covenants not to,
and Holliday GP hereby agrees and covenants to cause the Partnerships not to, enter into any
agreement with a third party that would impede or adversely affect the Partnerships’ ability to
fulfill their obligations in Section 1.1 above.

     1.3. Assignment. This Agreement may not be assigned by any party without the prior
written consent of the other Parties.

     1.4. Applicable Law; Consent to Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving effect to such
State’s laws and principles regarding the conflict of laws.

     1.5. No Benefit to Others. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the Parties hereto and their respective
heirs, executors, administrators, legal representatives, successors and permitted assigns, and they
shall not be construed as conferring any rights on any other Persons.

     1.6. Counterparts. This Agreement may be executed in any number of counterparts and
any party hereto may execute any such counterpart, each of which when executed and delivered shall
be deemed to be an original and all of which counterparts taken together shall constitute but one
and the same instrument. This Agreement shall become binding when one or more counterparts taken
together shall have been executed and delivered by all of the Parties.

 

 

     IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	 	HOLLIDAY GP CORP.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: John H. Pelusi, Jr.
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	HOLLIDAY FENOGLIO FOWLER, L.P.,
	 

	 	 	 	BY HOLLIDAY GP CORP.,

ITS GENERAL PARTNER
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: John H. Pelusi, Jr.
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	HFF SECURITIES L.P. ,
	 

	 	 	 	BY HOLLIDAY GP CORP.,

ITS GENERAL PARTNER
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name: John H. Pelusi, Jr.
	 

	 	 	 	Title:
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	INDEMNITEE
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:exv10w32

 

Exhibit 10.32

AMENDMENT No. 2 TO CREDIT AGREEMENT

     THIS AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 11, 2008 (the
“Amendment”), is by and among DEI SALES, INC., a Florida corporation (the
“Borrower”), those Affiliates of the Borrower identified as “Guarantors” on the signature
pages hereto (the “Guarantors”), the financial institutions party hereto (collectively, the
“Lenders”; and individually, a “Lender”), and CANADIAN IMPERIAL BANK OF COMMERCE,
acting through its New York Agency, as administrative agent for the Lenders (in such capacity, the
“Administrative Agent”) and collateral agent for the Secured Parties (in such capacity, the
“Collateral Agent”).

W I T N E S S E T H

     WHEREAS, the Borrower, the Lenders and the Administrative Agent are parties to that certain
Amended and Restated Credit Agreement dated as of September 22, 2006 (as previously amended and
modified and as amended, modified, supplemented or restated from time to time, the “Credit
Agreement”; capitalized terms used herein shall have the meanings ascribed thereto in the
Credit Agreement unless otherwise defined herein).

     WHEREAS, the Borrower has requested that the Requisite Lenders make certain amendments to the
Credit Agreement as set forth herein.

     WHEREAS, the Lenders have agreed to amend certain provisions of the Credit Agreement, in each
case on the terms and conditions set forth herein.

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

SECTION 1

AMENDMENTS

     1.1 Amendment to Credit Agreement. Subject to the satisfaction of the closing
conditions set forth in Section 2 below, from and after the Amendment No. 2 Effective Date (defined
below), the Credit Agreement is amended as follows:

(a) Section 1.1 of the Credit Agreement is hereby amended as follows:

          (i) The following definitions shall be added in alphabetical order to read as
follows:

“Consolidated Fixed Charge Coverage Ratio” shall mean, as at the
last day of any four consecutive Fiscal Quarter period ending during the
term of the Agreement, the ratio of (a) Consolidated EBITDA minus
Consolidated Capital Expenditures to (b) Consolidated Fixed Charges.

 

 

“Participating Receivables Grantor” shall mean the Borrower or any
of its Subsidiaries that is or that becomes a participant or originator in a
Permitted Receivables Financing.

“Permitted Receivables Financing” shall mean any of one or more
receivables financing, purchasing or sale programs, including, without
limitation, warehousing and securitization programs as amended,
supplemented, modified, extended, renewed, restated or refunded from time to
time, the obligations of which are non-recourse (except for customary
representations, warranties, covenants and indemnities and other customary
forms of support, in each case made in connection with such facilities) to
the Borrower and any of its Subsidiaries (other than a Receivables Entity)
providing for the sale, conveyance, or contribution to capital of
Receivables Facility Assets by Participating Receivables Grantors in
transactions purporting to be sales of Receivables Facility Assets to either
(a) a Person that is not a Subsidiary of the Borrower or (b) a Receivables
Entity that in turn funds such purchase by the direct or indirect sale,
transfer, conveyance, pledge, or grant of participation or other interest in
such Receivables Facility Assets to a Person that is not a Subsidiary of the
Borrower.

“Receivables Entity” shall mean any Person formed solely for the
purposes of (i) facilitating or entering into one or more Permitted
Receivables Financings, and (ii) in each case, engaging in activities
reasonably related or incidental thereto.

“Receivables Facility Assets” shall mean presently existing and
hereafter arising or originated Accounts, Payment Intangibles and Chattel
Paper (as each such term is defined in the UCC) owed or payable to any
Participating Receivables Grantor, and to the extent related to or
supporting any Accounts, Chattel Paper or Payment Intangibles, or
constituting a receivable, all General Intangibles and other forms of
obligations and receivables owed or payable to any Participating Receivables
Grantor, including the right to payment of any interest, finance charges,
late payment fees or other charges with respect thereto (the foregoing,
collectively, being “receivables”), all of such Participating Receivables
Grantor’s rights as an unpaid vendor (including rights in any goods the sale
of which gave rise to any receivables), all security interests or liens and
property subject to such security interests or liens from time to time
purporting to secure payment of any receivables or other items described in
this definition, all guarantees, letters of credit, security agreements,
insurance and other agreements or arrangements from time to time supporting
or securing payment of any receivables or other items described in this
definition, all customer deposits with respect thereto, all rights under any
contracts giving rise to or evidencing any receivables or other items
described in this definition, and all documents, books, records and
information (including computer programs, tapes, disks, data processing
software and related property and rights) re

-2-

 

lating to any receivables or other items described in this definition or to
any obligor with respect thereto, and all proceeds of the foregoing.

“Receivables Fees” means distributions or payments made directly or
by means of discounts with respect to any Accounts or participation interest
therein issued or sold in connection with, and other fees paid to a Person
that is not a Subsidiary of the Borrower in connection with any Permitted
Receivables Financing.

          (ii) The definition of “Applicable Percentage” is hereby amended by (A)
deleting the grid therein in its entirety and replacing it with the following:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	LIBOR Rate	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Margin for	 	Alternate	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Revolving	 	Base Rate	 	 	 	 	 	Alternate	 	 
	 	 	Consolidated	 	Loans and	 	Margin for	 	LIBOR Rate	 	Base Rate	 	 
	 	 	Total Leverage	 	Letter of	 	Revolving	 	Margin for	 	Margin for	 	Commitment
	Level	 	Ratio	 	Credit Fee	 	Loans	 	Term Loans	 	Term Loans	 	Fee
	I
	 	< 4.50 to 1.0	 	 	3.50	%	 	 	2.50	%	 	 	3.50	%	 	 	2.50	%	 	 	0.375	%
	II
	 	> 4.50 to 1.0	 	 	4.00	%	 	 	3.00	%	 	 	4.00	%	 	 	3.00	%	 	 	0.375	%

and (B) replacing the words “Level III” in the last sentence of such
definition with the words “Level II”.

          (iii) The definition of “Available Revolving Committed Amount” is amended by
(A) replacing the “$100,000,000” in clause (y) of the first sentence of such definition
with “$60,000,000“and (B) replacing the “$100,000,000” appearing in the second sentence
of such definition with “$60,000,000”.

          (iv) The definition of “Consolidated Total Debt” is amended and restated in
its entirety to read as follows:

“Consolidated Total Debt” shall mean, as at any date of
determination, (i) for purposes of calculating the Consolidated Total
Leverage Ratio with respect to Section 7.6 and the definition of “Excess
Cash Flow”, the aggregate stated balance sheet amount of all Indebtedness of
the Loan Parties and their Subsidiaries, determined on a consolidated basis
in accordance with GAAP, which for the avoidance of doubt, shall not include
any permissibly contingent obligation pursuant to a Permitted Receivables
Financing and (ii) for purposes of calculating the Consolidated Total
Leverage Ratio for determining the Applicable Margin, the aggregate amount
of all Indebtedness of the Loan Parties and their Subsidiaries whether or
not such Indebtedness would appear on the balance sheet of the applicable
Loan Party, which for the avoidance of doubt, shall include Indebtedness
with respect to any Permitted Receivables Financing.”

          (v) The definition of “Margin Determination Certificate” is amended by
replacing the “within 45 days of the last day of such fourth Fiscal Quarter” appearing

-3-

 

in clause (b) of such definition with “on or prior to the date Borrower is required
to file its annual report on Form 10-K”.

          (vi) The definition of “Net Asset Sale Proceeds” is amended and restated in
its entirety to read as follows:

“Net Asset Sale Proceeds” shall mean, with respect to any Asset Sale
or Permitted Receivables Financing, Cash payments (including any Cash
received by way of deferred payment pursuant to, or by monetization of, a
note receivable or otherwise, but only as and when so received) received
from such Asset Sale or Permitted Receivables Financing, net of any bona
fide direct costs (paid to non-Affiliates) incurred in connection with such
Asset Sale or Permitted Receivables Financing, including with respect to any
Asset Sale, (i) income taxes reasonably estimated to be actually payable
within two years of the date of such Asset Sale or Permitted Receivables
Financing as a result of any gain recognized in connection with such Asset
Sale and (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans)
that is secured by a Lien on the stock or assets in question and that is
required to be repaid under the terms thereof as a result of such Asset
Sale.

          (vii) The definition of “Permitted Encumbrances” is amended by (A) deleting
the word “and” from the end of clause (ix) thereof, (B) replacing the period at the end
of clause (x) with “; and” and (C) adding to the end of such definition the following
clause (xi):

"(xi) Liens on accounts receivable, other Receivables Facility Assets, or
accounts into which collections or proceeds of Receivables Facility Assets
are deposited, in each case arising in connection with a Permitted
Receivables Financing.”

          (viii) The definition of “Revolving Commitment” is amended by (A) deleting
the last sentence of such definition and (B) adding to the end of such definition the
following:

“On and after the Amendment No. 2 Effective Date, the aggregate amount of
the Revolving Commitments is $60,000,000, subject to the limitations in
Section 2.1(a) and the Revolving Commitment Percentage of each Revolving
Lender shall be reduced on a pro rata basis in accordance with the reduction
of the total Revolving Commitments.”

     (b) Section 2.1(a) of the Credit Agreement is hereby amended by replacing the “ONE
HUNDRED MILLION DOLLARS ($100,000,000)” appearing in the second sentence of such section
with “SIXTY MILLION DOLLARS ($60,000,000)”.

     (c) Section 2.2B(b) of the Credit Agreement is hereby amended by deleting the table
therein in its entirety and replacing it with the following:

-4-

 

	 	 	 	 	 
	Principal Amortization	 	Term Loan
	Payment Date	 	Principal Amortization Payment
	March 31, 2008
	 	$	766,901.02	 
	June 30, 2008
	 	$	766,901.02	 
	September 30, 2008
	 	$	766,901.02	 
	December 31, 2008
	 	$	766,901.02	 
	March 31, 2009
	 	$	766,901.02	 
	June 30, 2009
	 	$	766,901.02	 
	September 30, 2009
	 	$	766,901.02	 
	December 31, 2009
	 	$	5,885,803.10	 
	March 31, 2010
	 	$	766,901.02	 
	June 30, 2010
	 	$	766,901.02	 
	September 30, 2010
	 	$	766,901.02	 
	December 31, 2010
	 	$	11,144,321.20	 
	March 31, 2011
	 	$	766,901.02	 
	June 30, 2011
	 	$	766,901.02	 
	September 30, 2011
	 	$	766,901.02	 
	December 31, 2011
	 	$	11,144,321.20	 
	March 31, 2012
	 	$	766,901.02	 
	June 30, 2012
	 	$	766,901.02	 
	September 30, 2012
	 	$	766,901.02	 
	December 31, 2012
	 	$	11,144,321.20	 
	March 31, 2013
	 	$	766,901.02	 
	June 30, 2013
	 	$	766,901.02	 
	Term Loan Maturity Date
	 	The remaining principal amount of the Term Loan

It is understood that after giving effect to the Borrower’s voluntary prepayment of $39,233,098.88
of Term Loans on December 31, 2007, the foregoing principal amortization payments (other than the
payments to be made on December 31, 2009, December 31, 2010, December 31, 2011 and December 31,
2012) shall be reduced in accordance with Section 2.8(b)(ix)(A) such that the anticipated
amortization payments for each of March 31, 2008, June 30, 2008, September 30, 2008 and December
31, 2008, March 31, 2009, June 30, 2009, September 30, 2009, March 31, 2010, June 30, 2010,
September 30, 2010, March 31, 2011, June 30, 2011, September 30, 2011, March 31, 2012, June 30,
2012, September 30, 2012, March 31, 2013 and June 30, 2013 shall be $667,324.60.

          (d) Section 2.8(b)(i) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows.

          (i) Prepayments and Reductions From Net Asset Sale Proceeds. No later than
three Business Days following the date of receipt by a Loan Party or any of its
Subsidiaries of any Net Asset Sale Proceeds in respect of any Asset Sale or Permitted
Receivables Financing, Borrower shall prepay the Loans and/or the Revolving Commitments
shall be permanently reduced in an aggregate amount equal to such Net Asset Sale
Proceeds. Notwithstanding the preceding sentence, with respect to an Asset

-5-

 

Sale (other than a Permitted Receivables Financing), such prepayment shall not be
required to the extent that a Loan Party or any of its Subsidiaries reinvests the Net
Asset Sale Proceeds within 180 days after the date of such Asset Sale by making
Consolidated Capital Expenditures for productive fixed assets of a kind used or usable in
the business of the Loan Parties and their Subsidiaries.

          (e) Section 6.1(xv) of the Credit Agreement is hereby amended by replacing the words
“within 45 days of the last day of each fourth Fiscal Quarter” appearing in such section
with “on or prior to the date Borrower is required to file its annual report on Form 10-K”.

          (f) Section 6.8(A) of the Credit Agreement is hereby amended by inserting the words
“(other than a Receivables Entity)” immediately after the words “cause such Subsidiary.”

          (g) Section 7.1 of the Credit Agreement is hereby amended by (A) deleting the word
“and” from the end of clause (viii) thereof, (B) replacing the period at the end of clause
(ix) with “; and” and (C) adding to the end of such section the following clause (x):

“(x) The Borrower and its Subsidiaries may become and remain liable with
respect to Indebtedness in respect of Permitted Receivables Financings in an
amount not to exceed $40.0 million at any one time outstanding.”

          (h) Section 7.3 of the Credit Agreement is hereby amended by (A) deleting the word
“and” from the end of clause (viii), (B) redesignating clause (ix) thereof clause “(x)” and
(C) inserting immediately after clause (viii) thereof the following clause (ix):

“(ix) The Borrower and its Subsidiaries may make Investments arising as a
result of Permitted Receivables Financings; and”

          (i) Section 7.5 of the Credit Agreement is hereby amended by (A) deleting the word
“and” from the end of clause (iv) thereof, (B) replacing the period at the end of clause (v)
with “; and” and (C) adding to the end of such section the following clause (vi):

“(vi) The Borrower and its Subsidiaries may make distributions or payments
of Receivables Fees; provided that all up-front costs, legal fees
and up-front expenses in connection with all Permitted Receivables
Financings shall not exceed $1,000,000 since the Closing Date.”

     (j) Section 7.6(A) of the Credit Agreement is hereby amended by deleting the grid therein in
its entirety and replacing it with the following:

-6-

 

	 	 	 	 	 
	 	 	Maximum Consolidated
	Period	 	Total Leverage Ratio
	January 1, 2008-March 31, 2008
	 	 	5.25:1.0	 
	April 1, 2008-June 30, 2008
	 	 	5.25:1.0	 
	July 1, 2008-September 30, 2008
	 	 	5.25:1.0	 
	October 1, 2008-December 31, 2008
	 	 	5.25:1.0	 
	January 1, 2009-March 31, 2009
	 	 	5.25:1.0	 
	April 1, 2009-June 30, 2009
	 	 	4.95:1.0	 
	July 1, 2009-September 30, 2009
	 	 	4.95:1.0	 
	October 1, 2009-December 31, 2009
	 	 	4.95:1.0	 
	January 1, 2010-March 31, 2010
	 	 	3.95:1.0	 
	April 1, 2010-March 31, 2011
	 	 	3.25:1.0	 
	April 1, 2011 and thereafter
	 	 	3.00:1.0	 

     (k) Section 7.6(C) of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:

          (i) C. Minimum Fixed Charge Coverage Ratio. The Loan Parties shall not
permit the Consolidated Fixed Charge Coverage Ratio for any four consecutive Fiscal
Quarter period ending during any of the periods set forth below to be less than the
correlative ratio indicated:

	 	 	 	 	 
	 	 	Minimum
	 	 	Consolidated Fixed
	 	 	Charge Coverage
	Period	 	Period
	January 1, 2008 - September 30, 2009
	 	 	1.25:1.00	 
	October 1, 2009 and thereafter
	 	 	1.05:1.00	 

     (l) Section 7.7 of the Credit Agreement is hereby amended by:

          (i) amending and restating Section 7.7(v) in its entirety to read as follows:

“(v) The Loan Parties and their Subsidiaries may (a) sell or discount, in
each case without recourse and in the ordinary course of business, Accounts
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof and (b) sell or dispose of Receivables
Facility Assets in connection with Permitted Receivables Financing, in each
case so long as the Net Asset Sale Proceeds thereof are promptly applied to
repayment of Loans and/or reduction of Revolving Commitments pursuant to
Section 2.8(b);”

          (ii) inserting at the end of such section the following:

“To the extent the Requisite Lenders or all the Lenders, as applicable,
waive the provisions of this Section 7.7 with respect to the sale of any
Collateral, or any Collateral is sold as permitted by this Section 7.7, such

-7-

 

Collateral (unless sold to a Loan Party) shall be sold free and clear of the
Liens created by the Collateral Documents, and, so long as Borrower shall
have provided the Agents such certifications or documents as any Agent shall
reasonably request in order to demonstrate compliance with this Section 7.7,
the Agents shall take all actions they deem appropriate in order to effect
the foregoing.”

          (m) Section 7.12 of the Credit Agreement is hereby amended by adding to the end of the
first sentence of such Section the following:

“, or (iv) sales of Receivables Facility Assets in connection with any
Permitted Receivables Financing.”

          (n) Schedule 1.1(a) to the Credit Agreement is hereby amended by inserting the
following at the end of the such Schedule:

	 	•	 	To the extent deemed incurred during such period as a result of changes in
the Borrower’s accounting policies, costs and expenses incurred by the
Company in connection with its participation in the Consumer Electronics Show
in an amount not to exceed (i) $915,000 for the four Fiscal Quarter period
ending March 31, 2008, (ii) $615,000 for the four Fiscal Quarter period
ending June 30, 2008 and (iii) $310,000 for the four Fiscal Quarter period
ending September 30, 2008.
	 
	 	•	 	(A) Severance costs and facility consolidation costs in an aggregate
amount not to exceed $800,000 for the Fiscal Year ending December 31, 2008
and (B) consulting fees in an aggregate amount not to exceed $1,050,000 for
the Fiscal Year ending December 31, 2008, in each case, incurred by the
Company relating to its reduced headcount, improved process efficiency or in
connection with its restructuring.
	 
	 	•	 	To the extent incurred by the Borrower, charges relating to discontinued
operations with respect to businesses exited in the Fiscal Years ending
December 31, 2008 and December 31, 2009 in an amount not to exceed $1,000,000
in the aggregate for both Fiscal Years.
	 
	 	•	 	Non-cash charges for asset (goodwill and intangible) impairment.

     1.2 Effect of Amendment. Except as modified hereby, all of the terms and provisions
of the Credit Agreement (including the Schedules) and the other Loan Documents remain in full force
and effect.

SECTION 2

CLOSING CONDITIONS

     2.1 Conditions Precedent. This Amendment No. 2 shall become effective as of the date
hereof upon the following (the “Amendment No. 2 Effective Date”):

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          (a) Executed Agreement. Receipt by the Administrative Agent of a duly executed
signature page to this Amendment No. 2 from each of Borrower, the Guarantors, the
Administrative Agent, and the Requisite Lenders.

          (b) Consent Fee. The Borrower shall have paid a consent fee to the
Administrative Agent, for the ratable account of the applicable Lenders, equal to 0.50% of
the aggregate principal amount of Term Loans plus 0.50% of the aggregate amount of
Revolving Commitments of the Lenders, in each case, who have delivered executed consents to
this Amendment not later than the later of (i) 5:00 p.m. (New York City time) on March 11,
2008 and (ii) when the Administrative Agent has received executed consents to this Amendment
from the Requisite Lenders.

          (c) Fees and Expenses. The Agents and the Lenders shall have received from the
Borrower the aggregate amount of fees and expenses payable in connection with the
consummation of the transactions contemplated hereby.

SECTION 3

MISCELLANEOUS

     3.1 Amended Terms. The term “Credit Agreement” as used in each of the Loan Documents
shall hereafter mean the Credit Agreement as amended by this Amendment No. 2. Except as
specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and
confirmed and shall remain in full force and effect according to its terms.

     3.2 Representations and Warranties of Loan Parties. Each of the Loan Parties hereby
represents and warrants as follows:

          (a) Such Person has taken all necessary action to authorize the execution, delivery and
performance of this Amendment No. 2.

          (b) This Amendment No. 2 has been duly executed and delivered by such Person and
constitutes such Person’s legal, valid and binding obligations, enforceable in accordance
with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting
creditors’ rights generally and (ii) general principles of equity (regardless of whether
such enforceability is considered in a proceeding at law or in equity).

          (c) No consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is required in
connection with the execution, delivery or performance by such Person of this Amendment No.
2.

          (d) After giving effect to this Amendment No. 2, the representations and warranties set
forth in Section 5 of the Credit Agreement are, subject to the limitations set forth
therein, true and correct in all respects as of the date hereof (except for those which
expressly relate to an earlier date).

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          (e) After giving effect to this Amendment No. 2, no Default or Event of Default has
occurred and is continuing.

     3.3 Reaffirmation of Obligations. Each of the Loan Parties hereby acknowledges and
reaffirms their respective Obligations under the Loan Documents.

     3.4 Loan Document. This Amendment No. 2 shall constitute a Loan Document under the
terms of the Credit Agreement and shall be subject to the terms and conditions thereof (including,
without limitation, Sections 10.17 and 10.18 of the Credit Agreement).

     3.5 Entirety. This Amendment No. 2 and the other Loan Documents embody the entire
agreement between the parties hereto and supersede all prior agreements and understandings, oral or
written, if any, relating to the subject matter hereof.

     3.6 Counterparts. This Amendment No. 2 may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of which shall
constitute one and the same instrument. Delivery of executed counterparts of this Amendment No. 2
by telecopy or electronic mail shall be effective as an original and shall constitute a
representation that an original shall be delivered.

     3.7 Expenses. The Borrower agrees to pay all reasonable costs and expenses of the
Administrative Agent in connection with the preparation, negotiation, execution and delivery of
this Amendment No. 2, including, without limitation, the reasonable fees and expenses of Cahill
Gordon & Reindel llp, and all previously incurred fees and expenses which remain
outstanding on the date hereof.

     3.8 Further Assurances. The Loan Parties agree to promptly take such action, upon the
request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

     3.9 GOVERNING LAW. THIS AMENDMENT NO. 2 AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

     3.10 GENERAL RELEASE. IN CONSIDERATION OF THE LENDERS ENTERING INTO THIS AMENDMENT
NO. 2, THE LOAN PARTIES HEREBY RELEASE THE ADMINISTRATIVE AGENT, THE LENDERS, AND THE
ADMINISTRATIVE AGENT’S, AND THE LENDERS’ RESPECTIVE OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS,
COUNSEL AND DIRECTORS FROM ANY AND ALL ACTIONS, CAUSES OF ACTION, CLAIMS, DEMANDS, DAMAGES AND
LIABILITIES OF WHATEVER KIND OR NATURE, IN LAW OR IN EQUITY, NOW KNOWN OR UNKNOWN, SUSPECTED OR
UNSUSPECTED TO THE EXTENT THAT ANY OF THE FOREGOING ARISES FROM ANY ACTION OR FAILURE TO ACT UNDER
THE CREDIT AGREEMENT OR UNDER THE OTHER LOAN DOCUMENTS ON OR PRIOR TO THE DATE HEREOF.

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     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this Amendment No.
2 to be duly executed and delivered as of the date first above written.

	 	 	 	 	 	 	 
	BORROWER:	 	DEI SALES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Duffy
 

Name: Kevin Duffy

Title: Chief Financial Officer
	 	 
	 
	 	 	 	 	 	 
	GUARANTORS:	 	DIRECTED ELECTRONICS, INC.	 	 
	 	 	DEI HEADQUARTERS, INC.,	 	 
	 	 	DEI INTERNATIONAL, INC.	 	 
	 	 	POLK HOLDING CORP.	 	 
	 	 	POLK AUDIO, INC.	 	 
	 	 	BRITTANIA INVESTMENT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Kevin Duffy	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Kevin Duffy

Title: Chief Financial Officer	 	 

 

 

	 	 	 	 	 	 	 
	ADMINISTRATIVE AGENT:	 	CANADIAN IMPERIAL BANK OF	 	 
	 	 	COMMERCE, ACTING THROUGH	 	 
	 	 	ITS NEW YORK AGENCY,	 	 
	 	 	as Administrative Agent on behalf of the Lenders	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ E. Lindsay Gordon
 

Name: E. Lindsay Gordon

Title: Canadian Imperial Bank of Commerce

         Authorized Signatory

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