TESS » Topics » SECTION 4.1 Interest; Late Charges, Etc .

This excerpt taken from the TESS 8-K filed Jun 6, 2007.

SECTION 4.1         Interest; Late Charges, Etc.

(a)           Subject to the provisions of Subsection 4.1(d) hereof, the aggregate amount of all Loans shall bear interest at a floating and fluctuating per annum rate of interest equal to the applicable LIBOR Index plus the Applicable Margin.

(b)           Accrued interest on the Loans shall be payable monthly on the first (1st) day of each month commencing on July 1, 2007.

(c)           The Applicable Margin provided for in Section 4.1(a) with respect to the Loans shall for each fiscal quarter be determined by reference to the Borrowers’ ratio of Funded Debt to EBITDA as of the end of the fiscal quarter immediately preceding the delivery of the applicable Officer’s Compliance Certificate as follows:

Funded Debt to EBITDA

 

Applicable Margin

 

Greater than or equal to 3.5 to 1.0

 

2.75

%

Greater than or equal to 3.0 to 1.0 , but less than 3.5 to 1.0

 

2.50

%

Greater than or equal to 2.5 to 1.0 but less than 3.0 to 1.0

 

2.15

%

Greater than or equal to 2.0 to 1.0 but less than 2.5 to 1.0

 

1.85

%

Greater than or equal to 1.5 to 1.0 but less than 2.0 to 1.0

 

1.65

%

Less than 1.50 to 1.0

 

1.25

%

 

Adjustments, if any, in the Applicable Margin shall be made by the Agent on the tenth (10th) Business Day after receipt by the Agent of quarterly financial statements for the Borrowers and their Subsidiaries and the accompanying Officer’s Compliance Certificate setting forth the ratio of Funded Debt to EBITDA of the Borrowers and their Subsidiaries as of the most recent fiscal quarter end.  Subject to Section 4.1(d), in the event the Borrowers fail to deliver such financial statements and

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certificate within the time required by Section 7.2 hereof, the Applicable Margin shall be the highest Applicable Margin set forth above until the delivery of such financial statements and certificate.

(d)           Default Rate.  Subject to Section 11.3, upon the occurrence and during the continuance of an Event of Default, all outstanding Loans shall bear interest at a rate per annum three percent (3%) in excess of the rate then applicable to Loans.  Interest shall continue to accrue on the Note after the filing by or against any or all of the Borrowers of any petition seeking any relief in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

(e)           Interest Payment and Computation.  All interest rates, fees and commissions provided hereunder shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed.  The interest rate payable hereunder shall be adjusted monthly upon any change in the LIBOR Index, or daily upon any change in the Prime Rate, as applicable.

(f)            Maximum Rate.  In no contingency or event whatsoever shall the aggregate of all amounts deemed interest hereunder or under the Note charged or collected pursuant to the terms of this Agreement or pursuant to the Note exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto.  In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Agent’s option (i) promptly refund to the Borrowers any interest received by the Lenders in excess of the maximum lawful rate or (ii) shall apply such excess to the principal balance of the Obligations.  It is the intent hereof that the Borrowers not pay or contract to pay, and that neither the Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the Borrowers under Applicable Law.

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