REVOLVING CREDIT AGREEMENT

Exhibit 10.11

 

EXECUTION COPY

 

Published CUSIP Number:             

 

REVOLVING CREDIT AGREEMENT

 

Dated as of March 31, 2005

 

among

 

MUSTANG MSC-FLORIDA ACQUISITION, INC.,

 

as the Borrower,

 

MCP-MSC ACQUISITION, INC.,

 

as Holdings,

 

BANK OF AMERICA, N.A.,

as Administrative Agent and L/C Issuer,

 

and

 

The Other Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC,

 

as Sole Lead Arranger and Sole Book Manager

 

 

MSC Credit Agreement

 

TABLE OF CONTENTS

 

 

MSC Credit Agreement

 

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iii

 

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iv

SCHEDULES

 

 

EXHIBITS

 

 

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REVOLVING CREDIT AGREEMENT

 

This REVOLVING CREDIT AGREEMENT (“ Agreement ”) is entered into as of March 31, 2005, among MUSTANG MSC-FLORIDA ACQUISITION, INC., a Florida corporation (the “ Initial Borrower ”), MCP-MSC ACQUISITION, INC., a Delaware corporation (“ Holdings ”), each lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), and BANK OF AMERICA, N.A., as Administrative Agent and L/C Issuer.

 

PRELIMINARY STATEMENTS :

 

(1) Monitor Clipper Equity Partners II, L.P. and Monitor Clipper Equity Partners II (NQP), L.P. (together, “ Monitor Clipper ”) and certain affiliates have formed Holdings, which has in turn formed the Initial Borrower to acquire (the “ Acquisition ”) all of the stock of MSC Acquisition, Inc., a Florida corporation, (“ MSCAI ”), the sole asset of which is all of the stock of MSC-Medical Services Company, a Florida corporation (“ MSC ”; and, together with MSCAI, collectively, the “ Company ”) pursuant to the Stock Purchase Agreement dated March 7, 2005, as amended by the First Amendment to Stock Purchase Agreement dated as of March 31, 2005 (the “ Purchase Agreement ”) by and among Holdings and MSC Acquisition, Inc. and its stockholders and warrantholders.

 

(2) Immediately subsequent to, and substantially concurrent with, the consummation of the Acquisition, the Initial Borrower shall be merged with MSCAI, with the Initial Borrower to be the surviving entity of the merger, and immediately subsequent to, and substantially concurrent with the consummation of such merger, the Initial Borrower as survivor thereof shall be merged (both such mergers, collectively, the “ Merger ”) with and into MSC, with MSC as the ultimate survivor of the Merger (the “ Surviving Corporation ”). After giving effect to the Acquisition and the Merger, Holdings will be a holding company that directly owns, and the sole asset of which is, all of the equity interests in the Borrower.

 

(3) Simultaneously herewith, (a) the Initial Borrower will issue at least $175,000,000 in Senior Notes (as hereinafter defined) or borrow $175,000,000 in loans under the Bridge Facility (as hereinafter defined) and (b) Holdings shall receive cash proceeds from a capital contribution to its equity from the Equity Investors (as hereinafter defined) in an amount equal to at least the sum of (i) $184,402,520 and (ii) such additional amounts as may be necessary to finance the Transaction to the extent that the aggregate purchase price, refinancings, fees, expenses and all other amounts payable in respect of the Transaction exceed $368,402,521, and Holdings shall contribute all such cash proceeds to the Initial Borrower (the “ Equity Contribution ”).

 

(4) The Initial Borrower has requested that (a) immediately upon the consummation of the Acquisition, the Lenders lend to the Initial Borrower up to $13,000,000 minus the estimated amount of Post-Closing Transaction Expenses, which will be applied, together with the proceeds of the Senior Notes or the Bridge Facility, as applicable, and the Equity Contribution, to finance the Acquisition, to refinance all existing Indebtedness of the Company and its Subsidiaries, and to pay certain fees and expenses incurred in connection with the Transaction (as hereinafter defined) and (b) from time to time, the Lenders lend to the

 

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Borrower and the L/C Issuer (as hereinafter defined) issue Letters of Credit (as hereinafter defined) for the account of the Borrower to provide a revolving credit facility for the Borrower and its Subsidiaries (as hereinafter defined).

 

(5) The Lenders have indicated their willingness to lend and the L/C Issuer has indicated its willingness to so issue Letters of Credit, in each case, on the terms and subject to the conditions set forth herein.

 

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below:

 

“ Acquisition ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Administrative Agent ” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

 

“ Administrative Agent’s Office ” means the Administrative Agent’s address and, as appropriate, account as set forth on Schedule 11.02 , or such other address or account as the Administrative Agent may from time to time notify to the Borrower and the Lenders.

 

“ Administrative Questionnaire ” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

 

“ Affiliate ” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

“ Aggregate Commitments ” means, at any time, the Commitments of all the Lenders at such time.

 

“ Aggregate Exposure ” means, at any time, with respect a Lender, the sum of (a) the Outstanding Amount of all Revolving Credit Loans and L/C Obligations owing to such Lender (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition) and (b) unused Commitments of such Lender.

 

“ Agreement ” means this Credit Agreement.

 

“ Applicable Percentage ” means, with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Revolving Credit Facility represented by such Lender’s Commitment at such time. If the Commitment of each Lender to make

 

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Revolving Credit Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 , or if the Commitments have expired, then the Applicable Percentage of each Lender in respect of the Revolving Credit Facility shall be determined based on the Applicable Percentage of such Lender in respect of the Revolving Credit Facility most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender in respect of the Revolving Credit Facility is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

 

“ Applicable Rate ” means, in respect of the Revolving Credit Facility, (a) from the Closing Date through delivery of the Compliance Certificate for the second full and complete fiscal quarter following the Closing Date (as provided below), 3.00%  per annum for Eurodollar Rate Loans and 2.00%  per annum for Base Rate Loans and (b) thereafter, a percentage per annum determined by reference to the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b) :

 

Applicable Rate

 

 

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b) ; provided , however , that if a Compliance Certificate is not delivered when due in accordance with such Section 6.02(b) , then Pricing Level 4 shall apply in respect of the Revolving Credit Facility as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered until such Compliance Certificate is so delivered.

 

“ Appropriate Lender ” means, at any time, with respect to the Revolving Credit Facility, a Lender that has a Commitment at such time.

 

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“ Arranger ” means Banc of America Securities LLC, in its capacity as sole lead arranger and sole bookrunning manager.

 

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b) ), and accepted by the Administrative Agent, in substantially the form of Exhibit D or any other form approved by the Administrative Agent.

 

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“ Assumption Agreement ” has the meaning specified in Section 4.01(a) .

 

“ Attributable Indebtedness ” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP and (b) in respect of any Synthetic Lease Obligation of any Person, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capitalized Lease.

 

“ Audited Financial Statements ” means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended December 31, 2004, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

 

“ Auto-Extension Letter of Credit ” has the meaning specified in Section 2.03(b)(iii) .

 

“ Auto-Reinstatement Letter of Credit ” has the meaning specified in Section 2.03(b)(iv) .

 

“ Bank of America ” means Bank of America, N.A. and its successors.

 

“ Base Rate ” means for any day a fluctuating rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate.” The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

 

“ Base Rate Loan ” means a Revolving Credit Loan that bears interest based on the Base Rate.

 

“ Borrower ” means (a) prior to the Merger, the Initial Borrower and (b) from and after the Merger, the Surviving Corporation.

 

“ Borrowing Base ” means, at any time, an amount equal to 85% of the value of all Eligible Receivables.

 

“ Borrowing Availability ” means, at any time, the amount by which (a) the lesser of (i) the Borrowing Base at such time and (ii) the Revolving Credit Facility at such time exceeds (b) the sum of (i) the aggregate principal amount of the Revolving Credit Loans outstanding at such time plus (ii) the aggregate amount of the L/C Obligations outstanding at such time.

 

“ Borrowing Base Certificate ” means a certificate in substantially the form of Exhibit J , together with any modifications thereto necessary to take into account any changes in

 

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the criteria or factors for determining Eligible Receivables in accordance with the definition thereof.

 

“ Borrowing Base Deficiency ” means, at any time, the failure of the Borrowing Availability at such time to exceed $0.

 

“ Bridge Collateral Documents ” means the Bridge Security Agreement dated as of the date of this Agreement by each of the Loan Parties in favor of the Bridge Facility Agent in substantially the form of Exhibit A of the Bridge Intercreditor Agreement and any mortgages, collateral assignments, security agreements, pledge agreements or other similar agreements and any supplements thereto contemplated by the Bridge Security Agreement and otherwise permitted under the Bridge Intercreditor Agreement.

 

“ Bridge Covenant Release ” means, after the earlier of (a) the occurrence of the Covenant Release Date (as defined in the Bridge Loan Agreement) and the release and discharge of the covenants under the Bridge Loan Agreement as provided in Section 2.03(d) of the Bridge Loan Agreement, and (b) the date on which all amounts and other obligations outstanding under the Bridge Facility Documents have been paid in full and all commitments thereunder terminated or expired.

 

“ Bridge Facility ” means the $175,000,000 senior secured bridge loans, if any, of the Borrower borrowed on the Closing Date under the Bridge Facility Documents, together with any rollover loans and exchange notes issued in exchange for such bridge loans pursuant to the Bridge Facility Documents.

 

“ Bridge Facility Agent ” means Banc of America Bridge LLC, as the Administrative Agent pursuant to the Bridge Loan Agreement, together its successors and assigns.

 

“ Bridge Facility Documents ” means the Bridge Loan Agreement, the Bridge Collateral Documents and each of the notes, guaranties, agreements, instruments or other documents issued or entered into by the Loan Parties pursuant thereto, including, without limitation, the Exchange Note Indenture and any Exchange Notes (as such terms are defined in the Bridge Loan Agreement).

 

“ Bridge Intercreditor Agreement ” means the Intercreditor Agreement dated as of the date of this Agreement by each of the Loan Parties, the Administrative Agent and Bridge Facility Agent in substantially the form of Exhibit H .

 

“ Bridge Loan Agreement ” means the Senior Secured Bridge Loan Agreement dated as of the date hereof among Holdings, the Borrower, Banc of America Bridge LLC, as initial Bridge Lender, and the Bridge Facility Agent in respect of the Bridge Facility.

 

“ Business Day ” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

 

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“ Capital Expenditures ” means, with respect to any Person for any period, without duplication, all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during such period for equipment, fixed assets, real property or improvements, or for replacements or substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP, reflected as additions to property, plant or equipment on a consolidated balance sheet of such Person; provided , that any such expenditures made with the net cash proceeds of (a) any Disposition of any fixed or capital assets permitted under Section 7.05(f) shall not constitute Capital Expenditures if such expenditures are made within 180 days of such Disposition for the acquisition of replacement or substitute assets, and (b) the casualty and condemnation proceeds received as a result of any loss, casualty or condemnation of fixed or capital assets shall not constitute Capital Expenditures; provided , further , that any acquisitions made in accordance with Section 7.03(h) shall not be deemed to constitute Capital Expenditures.

 

“ Capitalized Leases ” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

 

“ Cash Collateral ” has the meaning specified in Section 2.03(g) .

 

“ Cash Collateral Account ” means a blocked deposit account of one or more of the Loan Parties at Bank of America (or another commercial bank selected in compliance with Section 6.17 ) in the name of the Collateral Agent and under the dominion and control of the Collateral Agent in accordance with the provisions of the Security Agreement and otherwise established in a manner satisfactory to the Administrative Agent.

 

“ Cash Collateralize ” has the meaning specified in Section 2.03(g) .

 

“ Cash Equivalents ” means any of the following types of Investments:

 

(a) readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided that the full faith and credit of the United States of America is pledged in support thereof;

 

(b) time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c)  of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case, with maturities of not more than 360 days from the date of acquisition thereof;

 

(c) commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 360 days from the date of acquisition thereof; and

 

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(d) Investments, classified in accordance with GAAP as Current Assets of the Borrower or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and substantially all the portfolios of which consist of Investments of the character, quality and maturity described in clauses (a), (b) and (c)  of this definition.

 

“ CERCLA ” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

 

“ CERCLIS ” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

 

“ CFC ” means a Person that is a controlled foreign corporation under Section 957 of the Code.

 

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.

 

“ Change of Control ” means an event or series of events by which:

 

(a) Prior to a Qualifying IPO, (i) the Sponsor shall cease to own and control legally and beneficially, either directly or indirectly, equity securities in Holdings representing a majority of the combined voting power of all of the equity securities entitled to vote for members of the board of directors or equivalent governing body of such Person on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or (ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the MCP Control Group becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “ option right ”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 40% or more of the equity securities of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right); or

 

(b) After a Qualifying IPO, any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than

 

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the MCP Control Group becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire (such right, an “ option right ”), whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of 30% or more of the equity securities of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right) and such “beneficial ownership” represents a greater percentage of the total voting power of such equity securities (including option rights) than the percentage of the total voting power of such equity securities (including option rights) “beneficially owned” by the MCP Control Group; or

 

(c) during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of Holdings cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i)  above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii)  above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body (excluding, in the case of both clause (ii)  and clause (iii) , any individual whose initial nomination for, or assumption of office as, a member of that board or equivalent governing body occurs as a result of an actual or threatened solicitation of proxies or consents for the election or removal of one or more directors by any person or group other than a solicitation for the election of one or more directors by or on behalf of the board of directors), or (iv) who were nominated by the Sponsor; or

 

(d) Holdings shall cease, directly or indirectly, to own and control legally and beneficially all of the Equity Interests in the Borrower; or

 

(e) a “change of control” or any comparable term or event under, and as defined in, (i) the Bridge Facility Documents, any Permanent Financing Documents, Permitted Holdco Debt Documents shall have occurred or exist or (ii) other debt documents in an aggregate amount exceeding the Threshold Amount shall have occurred or exist and such event permits the holders of the debt thereunder to demand any payment or redemption of such debt, results in any default thereunder or causes any Loan Party to be obligated to make any payment or redemption of such debt, or to make any offer to prepay or redeem any such debt.

 

“ Closing Date ” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 11.01 .

 

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“ Closing Date Material Adverse Effect ” means, as of the Closing Date, “Material Adverse Effect” as defined in the commitment letter agreement, dated March 3, 2005, among Holdings, Bank of America, Banc of America Bridge LLC and the Arranger.

 

“ Code ” means the Internal Revenue Code of 1986.

 

“ Collateral ” means all of the “ Collateral ” referred to in the Collateral Documents and all of the other property and assets that are or are intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“ Collateral Documents ” means, collectively, the Security Agreement, the Account Control Agreements (as defined in the Security Agreement), the Intellectual Property Security Agreement, the Intercreditor Agreements, each of the mortgages, collateral assignments, Security Agreement Supplements, IP Security Agreement Supplements, security agreements, pledge agreements or other similar agreements delivered to the Administrative Agent and the Lenders pursuant to Section 6.12 , and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

 

“ Commitment ” means, as to each Lender, its obligation to (a) make Revolving Credit Loans to the Borrower pursuant to Section 2.01 and (b) purchase participations in L/C Obligations, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 under the caption “Commitment” or opposite such caption in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

 

“ Committed Loan Notice ” means a notice of (a) a Revolving Credit Borrowing, (b) a conversion of Revolving Credit Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a) , which, if in writing, shall be substantially in the form of Exhibit A .

 

“ Company ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Compliance Certificate ” means a certificate substantially in the form of Exhibit C .

 

“ Consolidated Cash Interest Charges ” means, for any Measurement Period, the Consolidated Interest Charges paid or required to be paid in cash (without duplication) during such Measurement Period.

 

“ Consolidated EBITDA ” means, at any date of determination, an amount equal to Consolidated Net Income of the Borrower and its Subsidiaries for the most recently completed Measurement Period plus (a) the following to the extent deducted in calculating, or otherwise reducing, such Consolidated Net Income, without duplication: (i) Consolidated Interest Charges, (ii) the provision for Federal, state, local and foreign income or franchise taxes payable, (iii)

 

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depreciation and amortization expense, (iv) non-cash expenses (other than the write-off or write-down of any Receivables or accounts), (v) non-cash charges from the write-off or write-down of any Receivables or accounts that exceed the amount of any reserves in respect of Receivables and accounts taken in a prior period which were added back in determining Consolidated EBITDA in a prior period in an aggregate amount not to exceed $2,000,000 in any fiscal year; (vi) non-recurring cash expenses in an aggregate amount not to exceed 10% of Consolidated EBITDA for such Measurement Period as determined without giving effect to any adjustments contemplated by this clause (a)(vi) , (vii) the aggregate amount of fees and expenses contemplated by clause (h)  of the definition of Transaction, to the extent actually paid, (viii) to the extent required to be paid and actually paid and reducing such Consolidated Net Income in such period, (A) excess compensation to former owners in an amount not to exceed $630,000 in the aggregate and (B) other non-recurring expenses in an amount not to exceed $170,000 in the aggregate, (ix) to the extent permitted to be paid pursuant to Section 7.08 , management fees actually paid, and (x) Post-Closing Transaction Expenses, and minus (b) the following to the extent included in calculating such Consolidated Net Income: (i) Federal, state, local and foreign income and franchise tax credits (other than credits requiring the payment of Company Tax Benefits as contemplated by Section 7.03(j) and Section 7.06(c) ), (ii) all non-cash items increasing Consolidated Net Income and (iii) all non-recurring items increasing Consolidated Net Income (in each case of or by the Borrower and its Subsidiaries for such Measurement Period); provided , that for the fiscal quarter ended December 31, 2004, Consolidated EBITDA for such fiscal quarter shall be $7,232,000; provided , further , that Consolidated EBITDA shall be calculated to give pro forma effect to (x) any Investment made in accordance with Section 7.03(h) during such Measurement Period as if such Investment had been made on the first day of such Measurement Period and (y) any Disposition made in accordance with Section 7.05(f) for cash consideration in excess of $500,000 during such Measurement Period as if such Disposition had been made on the first day of such Measurement Period.

 

“ Consolidated Fixed Charge Coverage Ratio ” means, for any Measurement Period, as of any date of determination, the ratio of (a) Consolidated EBITDA minus (i) Capital Expenditures paid in cash minus (ii) Federal, state, local and foreign income or franchise taxes paid or required to be paid in cash minus (iii) cash Restricted Payments to Holdings or any Person that is not a Loan Party minus (iv) Investments under Section 7.03(j) , and minus , (v) without duplication, management fees to (b) the sum of (i) Consolidated Cash Interest Charges plus (ii) the aggregate amount of scheduled payments and redemptions, repurchases, prepayments and similar acquisitions for value in respect of, all Consolidated Funded Indebtedness, but excluding payments on the Revolving Credit Loans not accompanied by a corresponding reduction of the Commitments under the Revolving Credit Facility and any such redemptions, repurchases, prepayments and similar acquisitions to the extent refinanced through the incurrence of additional Indebtedness otherwise expressly permitted under Section 7.02 .

 

“ Consolidated Funded Indebtedness ” means, as of any date of determination, for the Borrower and its Subsidiaries (or, if otherwise expressly provided, Holdings, the Borrower and its Subsidiaries) on a consolidated basis, the outstanding aggregate principal amount of all Indebtedness, whether current or long-term, other than Indebtedness of the types set forth in clause (b)  (solely to extent consisting of contingent obligations) and clause (c)  of the definition of Indebtedness.

 

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“ Consolidated Interest Charges ” means, for any Measurement Period, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, and (b) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP, in each case, of or by the Borrower and its Subsidiaries for the most recently completed Measurement Period; provided , that Consolidated Interest Charges shall also include the amount of any Investments and Restricted Payments made during the applicable Measurement Period to enable Holdings to make interest payments in respect of any Permitted Holdco Debt.

 

“ Consolidated Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness ( less , commencing with the fiscal quarter ending December 31, 2006, the amount of unrestricted cash in excess of $2,000,000 so long as the Outstanding Amount of Revolving Credit Loans is less than $2,000,000) as of such date to (b) Consolidated EBITDA for the most recently completed Measurement Period; as used herein, “ unrestricted cash ” means unrestricted cash on hand as reflected in the applicable balance sheet that is in excess of any reserves and is not subject to any Liens other than the Liens created by the Permitted Collateral Documents and Liens permitted under Section 7.01(q) .

 

“ Consolidated Net Income ” means, at any date of determination, the net income of the Borrower and its Subsidiaries (excluding extraordinary gains and losses) on a consolidated basis for the most recently completed Measurement Period.

 

“ Contractual Obligation ” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

 

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

 

“ Credit Extension ” means each of the following: (a) a Revolving Credit Borrowing and (b) an L/C Credit Extension.

 

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

 

“ Default ” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“ Default Rate ” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2.00%  per annum ; provided , however , that with respect

 

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to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2.00%  per annum and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate applicable to Eurodollar Rate Loans plus 2.00%  per annum .

 

“ Defaulting Lender ” means any Lender that (a) has failed to fund any portion of the Revolving Credit Loans or participations in L/C Obligations required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute, or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding.

 

“ Disposition ” or “ Dispose ” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

 

“ Dollar ” and “ $ ” mean lawful money of the United States.

 

“ Eligible Assignee ” means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, (ii) the L/C Issuer, and (iii) unless (A) an Event of Default has occurred and is continuing or (B) with respect to assignments by Bank of America and its Affiliates only, the Commitments of Bank of America and its Affiliates hereunder are greater than $20,000,000 in the aggregate, the Borrower (each such approval not to be unreasonably withheld or delayed); provided , that notwithstanding the foregoing, “Eligible Assignee” shall not include Holdings, the Borrower or any of Holdings’ Affiliates or Subsidiaries.

 

“ Eligible Receivables ” means all Receivables of the Borrower and its Subsidiaries minus all Ineligible Receivables (as hereinafter defined in this definition ) of the Borrower and its Subsidiaries as calculated in accordance with the Borrowing Base Certificate required to be delivered in accordance with Section 6.02(k) . As used herein, “ Ineligible Receivables ” shall initially mean the following classes of Receivables, as such classes and criteria therefor may be modified after the Closing Date at any time and from time to time by the Administrative Agent in its Permitted Discretion upon notice to the Borrower:

 

(a) Receivables that (i) do not arise out of sales of goods or rendering of services in the ordinary course of the Borrower’s or the relevant Subsidiary’s business, (ii) are not on terms normal or customary in the Borrower’s or the relevant Subsidiary’s business, or (iii) arise out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, setoff or charge back;

 

(b) Receivables more than 120 days past original invoice date;

 

(c) Receivables owing from any Person that is also a supplier to or creditor of the Borrower or any of its Subsidiaries except to the extent that the aggregate amount of

 

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such Receivables owing from such Person exceeds the aggregate amount of the obligations and liabilities owing to such Person;

 

(d) Receivables representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling the Borrower or any of its Subsidiaries to discounts on future purchase therefrom;

 

(e) Receivables arising out of sales to account debtors outside the United States or that are payable other than in Dollars;

 

(f) Receivables owing from (i) an account debtor that is an agency, department or instrumentality of the United States, (ii) an account debtor that is an agency, department or instrumentality of any state of the United States to the extent that the aggregate amount of such Receivables exceed 10% of the aggregate amount of all Receivables, (iii) any Person that is an Affiliate of Holdings or the Borrower, (iv) any Person that (A) has disputed liability for any Receivable owing from such Person with respect to such Receivable or (B) has otherwise asserted any claim, demand or liability against the Borrower or any of its Subsidiaries, whether by action, suit, counterclaim or otherwise, in an aggregate amount equal to the maximum potential monetary liability arising from such claim, demand or liability (including any damages); and (v) any Person that shall take or be the subject of any action or proceeding of a type described in Section 8.01(f) ; and

 

(g) Receivables in respect of which (i) the Security Agreement, after giving effect to the related filings of financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Administrative Agent, on behalf of the Secured Parties, securing the Secured Obligations, subject to the Liens permitted under Section 7.01(a), (b) or (d) , (ii) any other Person shall have a first priority Lien, whether consensual or by operation of law, and (iii) the applicable account debtor has not been instructed to pay to a Cash Collateral Account or, if such account debtor pays by check, such check is not required to be promptly deposited into a Cash Collateral Account in accordance with the cash management or treasury systems and policies of the Borrower and its Subsidiaries.

 

“ Environmental Action ” means any and all claims, actions, suits, arbitrations, inquiries, proceedings, investigations, demands, demand letters, liens, notices of non-compliance or violation, notices of liability or potential liability, consent orders or consent agreements relating in any way to any Environmental Law, any Environmental Permit, any Environmental Liability or any Hazardous Materials.

 

“ Environmental Laws ” means any and all Federal, state, local, and foreign statutes, laws (including common law), regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or human health or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

 

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“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

 

“ Environmental Permit ” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

 

“ Equity Contribution ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

 

“ Equity Investors ” means the Sponsor, members of senior management owning Equity Interests of Holdings and private equity and similar investors.

 

“ ERISA ” means the Employee Retirement Income Security Act of 1974.

 

“ ERISA Affiliate ” means any trade or business (whether or not incorporated) under common control with the Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

“ ERISA Event ” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any

 

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liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.

 

“ Escrow Agreement ” means the Escrow Agreement dated as of March 31, 2005 by and among HIG-MSC, Inc., Holdings, and Wells Fargo Bank, National Association, as escrow agent.

 

“ Eurodollar Rate ” means, for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the British Bankers Association LIBOR Rate (“ BBA LIBOR ”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period. If such rate is not available at such time for any reason, then the “Eurodollar Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted by Bank of America and with a term equivalent to such Interest Period would be offered by Bank of America’s London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

 

“ Eurodollar Rate Loan ” means a Revolving Credit Loan that bears interest at a rate based on the Eurodollar Rate.

 

“ Event of Default ” has the meaning specified in Section 8.01 .

 

“ Excluded Taxes ” means, with respect to the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof and including the United States in the case of a domestic Lender) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending Office is located or any jurisdiction in which such Lender is otherwise engaged in a trade or business as a result of transactions unrelated to the Loan Documents, (b) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which the Borrower is located, (c) in the case of any Lender (other than an assignee pursuant to a request by the Borrower under Section 11.13 ), any withholding tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party hereto (or designates a new Lending Office) except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(e) and (d) in the case of a Foreign Lender, is attributable to such Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 3.01(e) , except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new Lending Office

 

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(or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 3.01(a) .

 

“ Existing Notes Agreements ” means, collectively, (a)(i) the $10,000,00 Senior Secured Floating Rate Term Notes due December 31, 2007 and (ii) the $10,000,000 Senior Secured Revolving Credit Notes due June 7, 2005, in each case, issued pursuant to that certain Senior Note Agreement dated as of June 7, 2002 among MSC and the purchasers party thereto, (b) the $10,000,000 13% Senior Subordinated Notes due June 7, 2009 issued pursuant to that certain $10,000,000 Senior Subordinated Note Agreement dated as of June 7, 2002 among MSC and the purchasers party thereto and (c) that certain Securities Purchase Agreement dated as of June 7, 2002 among MSC, MSCAI, Prudential Insurance, Prudential Capital Partners, L.P., Prudential Capital Partners Management Fund, L.P.

 

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

 

“ Fee Letter ” means the fee letter agreement, dated March 3, 2005, among Holdings, Bank of America, Banc of America Bridge LLC and the Arranger.

 

“ Foreign Lender ” means any Lender that is organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

 

“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

 

“ Fund ” means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“ GAAP ” means, subject to Section 1.03 , generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

 

“ Governmental Authority ” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency,

 

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authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 

“ Granting Lender ” has the meaning specified in Section 11.06(h) .

 

“ Guarantee ” means, as to any Person, any (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “ Guarantee ” as a verb has a corresponding meaning.

 

“ Guaranteed Obligations ” has the meaning specified in Section 10.01 .

 

“ Guarantors ” means, collectively, Holdings and each Subsidiary of the Borrower that is party to a Guaranty and that otherwise shall be required to execute and deliver a Guaranty pursuant to Section 6.12 .

 

“ Guaranty ” means, collectively, the Guaranty made by Holdings under Article X in favor of the Secured Parties, the Subsidiary Guaranty and each guaranty and guaranty supplement delivered pursuant to Section 6.12 .

 

“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated, or with respect to which liability may be imposed, pursuant to any Environmental Law.

 

“ Hedge Bank ” means any Person that is a Lender or an Affiliate of a Lender, in its capacity as a party to a Secured Swap Contract.

 

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“ Holdings ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

 

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

(b) the maximum amount of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

 

(c) net obligations of such Person under any Swap Contract;

 

(d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and more than 120 days past original invoice date);

 

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

 

(f) all Attributable Indebtedness;

 

(g) all Synthetic Debt;

 

(h) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

 

(i) all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is by applicable law, or is expressly made, non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

 

“ Indemnified Taxes ” means Taxes other than Excluded Taxes.

 

“ Indemnitees ” has the meaning specified in Section 11.04(b) .

 

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“ Initial Borrower ” has the meaning specified in the introductory paragraph hereto.

 

“ Initial Credit Extension ” has the meaning specified in Section 2.01 .

 

“ Intellectual Property Security Agreement ” has the meaning specified in Section 4.01(a)(v) .

 

“ Intercreditor Agreement ” means (a) so long as any amounts are outstanding under the Bridge Facility, the Bridge Intercreditor Agreement, and (b) so long as any Permanent Financing is outstanding, the Permanent Financing Intercreditor Agreement.

 

“ Interest Payment Date ” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Eurodollar Rate Loan and the Maturity Date; provided , however , that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan, commencing June 30, 2005, the last Business Day of each March, June, September and December and the Maturity Date.

 

“ Interest Period ” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Borrower in its Committed Loan Notice; provided that:

 

(a) any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

(b) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

 

(c) no Interest Period shall extend beyond the Maturity Date.

 

“ Internal Control Event ” means a material weakness in, or fraud that involves management or other employees who have a significant role in Holdings’ and the Borrower’s internal controls over financial reporting, in each case as described in the Securities Laws.

 

“ Investment ” means, as to any Person, any direct or indirect acquisition or investment by such Person, including, without limitation, (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a division, business unit or all or a substantial part of the business of, such Person, whether through merger, consolidation, amalgamation or otherwise. For purposes of covenant compliance, the amount of any Investment shall be the amount actually

 

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invested, without adjustment for subsequent increases or decreases in the value of such Investment.

 

“ IP Rights ” has the meaning specified in Section 5.17 .

 

“ IP Security Agreement Supplement ” has the meaning specified in the Security Agreement.

 

“ IRS ” means the United States Internal Revenue Service.

 

“ ISP ” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

 

“ Issuer Documents ” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C Issuer and relating to any such Letter of Credit.

 

“ Laws ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

 

“ L/C Advance ” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

 

“ L/C Borrowing ” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Credit Borrowing.

 

“ L/C Credit Extension ” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

 

“ L/C Issuer ” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

 

“ L/C Obligations ” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

 

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“ Lender ” has the meaning specified in the introductory paragraph hereto.

 

“ Lending Office ” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Borrower and the Administrative Agent.

 

“ Letter of Credit ” means any standby letter of credit issued hereunder.

 

“ Letter of Credit Application ” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

 

“ Letter of Credit Expiration Date ” means the day that is seven days prior to the Maturity Date (or, if such day is not a Business Day, the next preceding Business Day).

 

“ Letter of Credit Fee ” has the meaning specified in Section 2.03(i) .

 

“ Letter of Credit Sublimit ” means an amount equal to $2,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Revolving Credit Facility.

 

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

 

“ Loan Documents ” means, collectively, (a) this Agreement, (b) the Revolving Credit Notes, (c) the Guaranty, (d) the Collateral Documents, (e) the Intercreditor Agreements, (f) the Assumption Agreement, (g) the Fee Letter, (h) each Issuer Document and (i) each Secured Swap Contract; provided that for purposes of Articles IV through VIII , “Loan Documents” shall not include any Secured Swap Contract.

 

“ Loan Parties ” means, collectively, the Borrower and each Guarantor.

 

“ Management Agreement ” means the letter agreement dated March 31, 2005 between MCP and MSC regarding consulting and management advisory services to be provided by MCP and fees for such services to be paid by MSC to MCP.

 

“ Material Adverse Effect ” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party other than for reasons of the type referred to in clause (a)  above (so long as such reason is not, or could not reasonably be expected to result in, an event, condition or circumstance of the type described in Section 8.01(f) or (g) ); or (c) a material

 

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adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

 

“ Maturity Date ” means the earlier of (a) March 31, 2011 and (b) the date of termination in whole of the Commitments pursuant to Section 2.05 or  8.02 .

 

“ MCP ” means Monitor Clipper Partners, LLC and its successors.

 

“ MCP Control Group ” means Monitor Clipper, MCP and any Affiliates of MCP Controlled by MCP other than any portfolio or operating companies in which any of the foregoing directly or indirectly owns any Equity Interests or which they otherwise Control.

 

“ Measurement Period ” means, at any date of determination, the most recently completed four fiscal quarters of Holdings, provided , that (a) for the fiscal quarter ending June 30, 2005, Consolidated EBITDA shall be calculated based on the December 31, 2004, March 31, 2005 and June 30, 2005 fiscal quarters multiplied by 4/3, (b) Consolidated Cash Interest Charges shall be calculated during the first three full and complete fiscal quarters completed after the Closing Date by multiplying (i) for the first such complete fiscal quarter, by 4 the Consolidated Cash Interest Charges for such complete fiscal quarter, (ii) for the second such complete fiscal quarter, by 2 the Consolidated Cash Interest Charges for the first two such complete fiscal quarters, and (iii) for the third such complete fiscal quarter, by 4/3 the Consolidated Cash Interest Charges for the first three such complete fiscal quarters and (c) if the Closing Date occurs after March 31, 2005, Consolidated Cash Interest Charges for the fiscal quarter ending June 30, 2005 shall be calculated by multiplying by 4 the pro forma Consolidated Cash Interest Charges for such fiscal quarter determined as if the total Indebtedness reflected on the consolidated balance sheet for the fiscal quarter ended June 30, 2005 had been incurred on the first day of such fiscal quarter (and remained outstanding without any increase or decrease in the amount of such Indebtedness during such fiscal quarter) at the applicable interest rates with respect thereto on June 30, 2005 (without considering any increase or decrease in such interest rates during such fiscal quarters).

 

“ Merger ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Monitor Clipper ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Moody’s ” means Moody’s Investors Service, Inc. and any successor thereto.

 

“ MSC ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ MSCAI ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Multiemployer Plan ” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate makes or is

 

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obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

 

“ Non-Reinstatement Deadline ” has the meaning specified in Section 2.03(b)(iv) .

 

“ Non-renewal Notice Date ” has the meaning specified in Section 2.03(b)(iii) .

 

“ NPL ” means the National Priorities List under CERCLA.

 

“ Obligations ” means all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Revolving Credit Loan or Letter of Credit, whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

 

“ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

 

“ Other Taxes ” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

 

“ Outstanding Amount ” means (a) with respect to Revolving Credit Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrower of Unreimbursed Amounts or refinancings of Unreimbursed Amounts as Revolving Credit Borrowings.

 

“ Participant ” has the meaning specified in Section 11.06(d) .

 

“ PBGC ” means the Pension Benefit Guaranty Corporation.

 

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“ Pension Plan ” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

 

“ Permanent Financing ” means (a) the Senior Notes issued on the Closing Date or (b) if the Bridge Facility shall have been funded on the Closing Date, any Senior Notes or other secured or unsecured debt securities or other Indebtedness (the “ Take-Out Financing ”) issued or incurred by Holdings and/or the Borrower for the purpose of refinancing the Bridge Facility so long as such Take-Out Financing shall (i) have a scheduled maturity no earlier than six months after the Maturity Date, (ii) have no scheduled amortization or mandatory prepayment or redemption (including at the option of the holders thereof) except customary offers to purchase upon a change of control, and, to the extent then customary for such type of Take-Out Financing, an asset sale, (iii) have covenant, default and remedy provisions applicable to Holdings, the Borrower and its Subsidiaries customarily contained in indentures for publicly-traded senior note or senior subordinated note debt securities (and in any event, without limiting the foregoing, less restrictive than those contained in this Agreement), (iv) after giving effect to the issuance or incurrence thereof, all amounts outstanding under the Bridge Facility shall have been repaid in full and all commitments thereunder terminated, and (v) any Liens securing the Take-Out Financing shall be on the terms and conditions required by, and subject to, the Permanent Financing Intercreditor Agreement; provided , that (A) if such Take-Out Financing is to be in the form of securities or Indebtedness convertible into common Equity Interests of Holdings, such convertible Take-Out Financing may have customary voluntary or mandatory redemption provisions for convertible debt securities to the extent payable in (1) common Equity Interests of the Borrower at any time or (2) in cash only if payable, whether voluntarily or at the option of the holders, after a date six months after the Maturity Date and (B) such Take-Out Financing shall not otherwise be exchanged for or convertible into the Equity Interests of a Loan Party.

 

“ Permanent Financing Collateral Documents ” means the Security Agreement to be entered into pursuant to the Permanent Financing Documents in substantially the form attached as Exhibit A to the Permanent Financing Intercreditor Agreement (except as otherwise consented to by the Administrative Agent) and any mortgages, collateral assignments, security agreements, pledge agreements or other similar agreements and any supplements thereto contemplated by such Security Agreement and otherwise permitted under the Permanent Financing Intercreditor Agreement.

 

“ Permanent Financing Documents ” means (a) the Senior Notes Indenture and the other Senior Notes Documents, and (b) with respect to any other Permanent Financing, the agreements, indentures, notes, Permanent Financing Collateral Documents, guaranties, supplements, instruments and other documents (including any exchange notes and securities) pursuant to which such Permanent Financing, if any, is issued or incurred or otherwise setting forth the terms of the Permanent Financing.

 

“ Permanent Financing Intercreditor Agreement ” means the Intercreditor Agreement dated as of (or prior to) the date on which any Permanent Financing is issued or

 

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incurred by each of the Loan Parties, the Administrative Agent and the holders of the Permanent Financing or any agent, trustee or other representative acting for the benefit of such holders in substantially the form of the Bridge Intercreditor Agreement, with such conforming changes as are necessary to reflect the terms and conditions of the Permanent Financing, or in such form, and on terms and conditions, as are otherwise agreed by the Administrative Agent and the Required Lenders.

 

“ Permitted Acquisition Basket ” means (a) at any time prior to the Bridge Covenant Release, (i) if prior to delivery of the financial statements required by Section 6.01(b) for the fiscal quarter ended March 31, 2005, $0, (ii) if the most recent financial statements delivered in accordance with Section 6.01(b) are for the fiscal quarter ended March 31, 2005, an aggregate amount from the Closing Date not to exceed $25,000,000 (including such purchase or acquisition) so long as, after giving pro forma effect to the purchase or acquisition, the pro forma Consolidated Leverage Ratio shall be less than 6.50:1.00, and (iii) if the financial statements for the fiscal quarter ended June 30, 2005 shall have been delivered in accordance with Section 6.01(b) , an aggregate amount from the Closing Date not to exceed $25,000,000 (including such purchase or acquisition) so long as, after giving pro forma effect to the purchase or acquisition, the pro forma Consolidated Leverage Ratio shall be equal to, or less than, the Consolidated Leverage Ratio immediately prior to giving effect to such purchase or acquisition; and (b) at any time after the Bridge Covenant Release, $35,000,000; provided , that, for determination of any Consolidated Leverage Ratio contemplated in this definition, Consolidated EBITDA shall be calculated as of the most recently ended Measurement Period on the following basis: (A) the pro forma Consolidated EBITDA attributable to the purchased or acquired assets or Person shall be calculated as if such purchase or acquisition had been made on the first day of the most recent Measurement Period, (B) if the most recent financial statements delivered in accordance with Section 6.01(b) are for the fiscal quarter ended March 31, 2005, the pro forma Consolidated EBITDA attributable to the Borrower and its Subsidiaries shall be calculated based on the Consolidated EBITDA for the six-month period ended March 31, 2005 multiplied by 2, and (c) if the most recent financial statements delivered in accordance with Section 6.01(b) are for the fiscal quarter ended June 30, 2005, the Consolidated EBITDA attributable to the Borrower and its Subsidiaries shall be calculated based on the Consolidated EBITDA for the ninth-month period ended June 30, 2005 multiplied by 4/3.

 

“ Permitted Collateral Documents ” means (a) the Collateral Documents, and (b) if (i) any amounts under the Bridge Facility remain outstanding, the Bridge Collateral Documents, and (ii) if no amounts are outstanding under the Bridge Facility and all commitments thereunder have expired or terminated, the Permanent Financing Collateral Documents.

 

“ Permitted Discretion ” means a determination in good faith and in the exercise of reasonable business judgment based on any event, condition or circumstance arising, or any new or existing information received or discovered, after the date hereof which could reasonably be expected to reduce (or increase) the value or the collectibility of the Receivables, taken as a whole.

 

“ Permitted Holdco Debt ” means unsecured Indebtedness of Holdings that (a) is not subject to any Guarantee by the Borrower or any of its Subsidiaries, (b) will not mature prior to the date that is six months after the Maturity Date, (c) has no scheduled amortization or

 

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mandatory prepayment or redemption (including at the option of the holders thereof) except customary offers to purchase upon a change of control, and, to the extent then customary for such type of Indebtedness, an asset sale, (d) does not permit any payments in cash of interest or other amounts in respect of the principal thereof for at least four years from the date of the issuance or incurrence thereof, (e) has covenant, default and remedy provisions customary for senior discount notes of an issuer that is the parent of a borrower under senior secured credit facilities, and in any event, with respect to covenant, default and remedy provisions, no more restrictive than those contained in the Permanent Financing Documents, taken as a whole (other than provisions customary for senior discount notes of a holding company).

 

“ Permitted Holdco Debt Documents ” means the agreements, indentures, notes, supplements, instruments and other documents (including any exchange notes and securities) pursuant to which any Permitted Holdco Debt is issued or incurred or otherwise setting forth the terms of such Permitted Holdco Debt.

 

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

 

“ Plan ” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

 

“ Pledged Debt ” has the meaning specified in Section 1 of the Security Agreement.

 

“ Pledged Equity ” has the meaning specified in Section 1 of the Security Agreement.

 

“ Post-Closing Transaction Expenses ” means the fees, discounts, commissions and reasonable costs and expenses incurred in connection with the sale or issuance of any Permanent Financing, the issuance of any exchange notes or similar securities in respect of such Permanent Financing and any registration statements filed with the SEC in respect of such exchange notes or securities.

 

“ Purchase Agreement ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Qualifying IPO ” means the issuance by Holdings of its common Equity Interests in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act (whether alone or in connection with a secondary public offering) yielding gross proceeds of at least $50,000,000.

 

“ Receivables ” has the meaning specified in Section 1 of the Security Agreement.

 

“ Receivables Collateral ” means all Collateral consisting of Receivables, including, and otherwise together with, (a) any rights or interests arising under all documents, agreements and instruments governing or relating to Receivables (including rights in respect of

 

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Liens securing such Receivables and other credit support in respect of such Receivables), (b) any proceeds of such Receivables and any lockboxes or accounts in which such proceeds are deposited or to which such Receivables are to be paid (including, without limitation, the Cash Collateral Accounts), (c) all books and records related to such Receivables, (d) all security deposits and other security interests or liens and property subject thereto purporting to secure payment of such Receivables, and (e) all products and proceeds of any Receivables or of the foregoing (including payments and other amounts received or realized in respect of any security, credit support, indemnities and insurance).

 

“ Register ” has the meaning specified in Section 11.06(c) .

 

“ Registered Public Accounting Firm ” has the meaning specified by the Securities Laws and shall be independent of Holdings and the Borrower as prescribed by the Securities Laws.

 

“ Related Documents ” means the Purchase Agreement, the Escrow Agreement, the Management Agreement and the Stockholders Agreement.

 

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

 

“ Reportable Event ” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

 

“ Request for Credit Extension ” means (a) with respect to a Revolving Credit Borrowing, conversion or continuation of Revolving Credit Loans, a Committed Loan Notice and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.

 

“ Required Lenders ” means, as of any date of determination, (a) if the Aggregate Exposure of Bank of America exceeds 50% of the Aggregate Exposure of all of the Lenders, Lenders holding more than 75% of the sum of (i) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition) and (ii) aggregate unused Commitments, and (b) if the Aggregate Exposure of Bank of America is 50% or less of the Aggregate Exposure of all of the Lenders, Lenders holding more than 60% of the sum of the (i) Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations being deemed “held” by such Lender for purposes of this definition) and (ii) aggregate unused Commitments; provided that, in each case, the unused Commitment of, and the Aggregate Exposure held by, or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders.

 

“ Responsible Officer ” means the chief executive officer, president, chief financial officer, treasurer or assistant treasurer of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

 

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“ Restricted Payment ” means (a) any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to any Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment, (b) any payments in respect of any notes issued by Holdings to, or other Indebtedness owing to, former stockholders of Holdings or former employees of Holdings and its Subsidiaries, and (c) any return or other payment in respect of Investments made by Holdings to the Borrower or any of its Subsidiaries, including payments or interest and repayments of principal; provided , with respect to the Borrower and its Subsidiaries, the payment of any Company Tax Benefits (as defined in the Purchase Agreement) and of any management fees pursuant to the Management Agreement shall constitute Restricted Payments.

 

“ Revolving Credit Borrowing ” means a borrowing consisting of simultaneous Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01 .

 

“ Revolving Credit Facility ” means, at any time, the aggregate amount of the Lenders’ Commitments at such time.

 

“ Revolving Credit Loan ” has the meaning specified in Section 2.01 .

 

“ Revolving Credit Note ” means a promissory note made by the Borrower in favor of a Lender evidencing Revolving Credit Loans made by such Lender, in substantially the form of Exhibit B .

 

“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and any successor thereto.

 

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

 

“ Secured Swap Contract ” means any interest rate Swap Contract required or permitted under Article VI or VII that is entered into by and between the Borrower and any Hedge Bank.

 

“ Secured Obligations ” has the meaning specified in the Security Agreement.

 

“ Secured Parties ” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05 , and the other Persons the Secured Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Collateral Documents.

 

“ Securities Act ” means the Securities Act of 1933, as amended.

 

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“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.

 

“ Securities Laws ” means the Securities Act, the Securities Exchange Act, the Sarbanes-Oxley Act of 2002, and, in each case, the rules and regulations of the SEC promulgated thereunder, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date under this Agreement.

 

“ Security Agreement ” has the meaning specified in Section 4.01(a)(iii) .

 

“ Security Agreement Supplement ” has the meaning specified in the Security Agreement.

 

“ Senior Notes ” means the senior secured floating rate notes, if any, issued and sold pursuant to the Senior Notes Indenture.

 

“ Senior Notes Documents ” means the Senior Notes Indenture, the Senior Notes, the Senior Notes Security Agreements and each of the other agreements, supplements, instruments and other documents (including, without limitation, guaranties and security agreements, to the extent permitted hereunder, and any exchange notes issued pursuant to a registered exchange offer) relating to the Senior Notes, or otherwise setting forth the terms of the Senior Notes.

 

“ Senior Notes Indenture ” means an indenture containing terms and conditions consistent with the requirements of clause (b)  of the definition of Permanent Financing and otherwise in form and substance reasonably satisfactory to the Administrative Agent.

 

“ Senior Notes Security Agreements ” means the Senior Notes Security Agreement to be entered into pursuant to the Senior Notes Documents in substantially the form attached as Exhibit A to the Permanent Financing Intercreditor Agreement (except as otherwise consented to by the Administrative Agent) and any mortgages, collateral assignments, security agreements, pledge agreements or other similar agreements and any supplements thereto contemplated by the Senior Notes Security Agreement and otherwise permitted under the Permanent Financing Intercreditor Agreement.

 

“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair saleable value of the assets of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed as the amount that, in the light

 

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of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“ SPC ” has the meaning specified in Section 11.06(h) .

 

“ Specified Default ” means any Default under Section 8.01(a), (f) or (g) .

 

“ Sponsor ” means, collectively, (a) the MCP Control Group, and (b) the Other Investors (as defined in the Stockholders Agreement) so long as (i) the MCP Control Group Controls Holdings and the Borrower, (ii) the MCP Control Group has the exclusive right and power to exercise all voting, consent and other rights of such Other Investors as set forth in Section 2 of the Stockholders Agreement, as in effect on the date hereof, and the voting proxy of such Other Investors in favor of the MCP Control Group pursuant to Section 2.7 thereof, as in effect on date hereof, is valid, enforceable and in full force and effect, and (iii) no individual Other Investor and its Affiliates (excluding the MCP Control Group) “beneficially owns” more Shares (as defined in the Stockholders Agreement as of the date hereof) than the MCP Control Group unless the MCP Control Group directly or indirectly owns at least 30% of the economic Equity Interests in Holdings on a fully diluted basis.

 

“ Stockholders Agreement ” means the Stockholders Agreement dated as of March 31, 2005 by and among Holdings, Monitor Clipper Equity Partners II, L.P., Monitor Clipper Equity Partners II (NQP), L.P. and the Holders of Shares (as defined therein).

 

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “ Subsidiary ” or to “ Subsidiaries ” shall refer to a Subsidiary or Subsidiaries of the Borrower.

 

“ Subsidiary Guarantor ” means each Guarantor that is a Subsidiary of the Borrower.

 

“ Subsidiary Guaranty ” means the Subsidiary Guaranty made by the Guarantors (other than Holdings) in favor of the Secured Parties, substantially in the form of Exhibit E .

 

“ Surviving Corporation ” has the meaning specified in the Preliminary Statements to this Agreement.

 

“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any

 

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combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

 

“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a) , the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon mid-market or other readily available quotations provided by at least two recognized dealers in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“ Syndication Information ” means any written marketing materials, including all financial information and data, and any information memorandum used by the Arranger in connection with the syndication of the Revolving Credit Facility.

 

“ Synthetic Debt ” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “ Indebtedness ” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

 

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

 

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“ Threshold Amount ” means $2,500,000.

 

“ Total Outstandings ” means the aggregate Outstanding Amount of all Revolving Credit Loans and L/C Obligations.

 

“ Transaction ” means, collectively, (a) the organization of the Initial Borrower and the issuance of all of the Equity Interests therein to Holdings, (b) the Acquisition, (c) the consummation of the Merger, (d) the issuance and sale of the Senior Notes (or the incurrence of

 

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loans under the Bridge Facility in lieu thereof), (e) the Equity Contribution, (f) the entering into by the Loan Parties and their applicable Subsidiaries of the Loan Documents, the Bridge Facility Documents or the Senior Notes Documents relating to the Senior Notes, as the case may be, and the other Related Documents to which they are or are intended to be a party, (g) the refinancing of all outstanding Indebtedness of the Company and its Subsidiaries and the termination of all commitments with respect thereto, and (h) the payment of fees and expenses incurred in connection with the consummation of the foregoing in an amount not to exceed $10,621,006 on the Closing Date.

 

“ Type ” means, with respect to a Revolving Credit Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

 

“ Unfunded Pension Liability ” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

 

“ United States ” and “ U.S. ” mean the United States of America.

 

“ Unreimbursed Amount ” has the meaning specified in Section 2.03(c)(i) .

 

“ U.S. Loan Party ” means any Loan Party that (a) is organized under the laws of one of the states of the United States of America or the laws of the District of Columbia and (b) that is not a CFC.

 

1.02 Other Interpretive Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

 

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “ include ,” “ includes ” and “ including ” shall be deemed to be followed by the phrase “without limitation.” The word “ will ” shall be construed to have the same meaning and effect as the word “ shall .” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “ herein ,” “ hereof ” and “ hereunder ,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified,

 

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refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “ asset ” and “ property ” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

(b) In the computation of periods of time from a specified date to a later specified date, the word “ from ” means “ from and including ;” the words “ to ” and “ until ” each mean “ to but excluding ;” and the word “ through ” means “ to and including .”

 

(c) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

 

1.03 Accounting Terms . (a) Generally . All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

 

(b) Changes in GAAP . If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

 

1.04 Rounding . Any financial ratios required to be maintained by the Borrower pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

 

1.05 Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

 

1.06 Letter of Credit Amounts . Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided , however , that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be

 

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the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

 

1.07 Currency Equivalents Generally . Any amount specified in this Agreement (other than in Articles II , IX and X ) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars. For purposes of this Section 1.07 , the “ Spot Rate ” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided that the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

 

ARTICLE II

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01 The Revolving Credit Loans . Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “ Revolving Credit Loan ”) to the Borrower from time to time, on any Business Day prior to the Maturity Date, in an aggregate amount not to exceed at any time outstanding the amount of such Lender’s Commitment; provided , however , that after giving effect to any Revolving Credit Borrowing, (i) the Total Outstandings at such time shall not exceed the Borrowing Availability at such time, and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed the lesser of such Lender’s Commitment and such Lender’s Applicable Percentage of the Borrowing Availability; and provided , further , that, notwithstanding the conditions hereof, the Borrower may borrow under this Section 2.01 , prepay under Section 2.04 , and reborrow under this Section 2.01 . Revolving Credit Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein and, notwithstanding anything herein to the contrary, the aggregate amount of Revolving Credit Borrowings on the Closing Date (collectively, the “ Initial Credit Extension ”) shall not exceed $13,000,000 minus the estimated amount of Post-Closing Transaction Expenses. Within the limits of each Lender’s Commitment, and subject to the other terms and

 

2.02 Revolving Credit Borrowings, Conversions and Continuations of Revolving Credit Loans . (a) Each Revolving Credit Borrowing, each conversion of Revolving Credit Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 1:00 p.m. (i) three Business Days prior to the requested date of any Revolving Credit Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Revolving Credit Borrowing of Base Rate Loans; provided , that so long as no Default shall have occurred

 

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and be continuing, with respect to any outstanding Eurodollar Rate Loans, if the Administrative Agent shall not have received notice of conversion or continuation with respect to such Eurodollar Rate Loans in accordance with clause (i) , the Borrower shall be deemed to have delivered a notice of continuation of such Eurodollar Rate Loans specifying an Interest Period of one month. Each telephonic notice by the Borrower pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Borrower. Each Revolving Credit Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof. Except as provided in Sections 2.03(c) , each Revolving Credit Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $100,000 or a whole multiple of $50,000 in excess thereof. Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Borrower is requesting Revolving Credit Borrowing, a conversion of Revolving Credit Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Revolving Credit Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Revolving Credit Loans to be borrowed, converted or continued, (iv) the Type of Revolving Credit Loans to be borrowed or to which existing Revolving Credit Loans are to be converted, and (v) if applicable, the duration of the Interest Period with respect thereto. If the Borrower fails to specify a Type of Revolving Credit Loan in a Committed Loan Notice or if the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Credit Loans shall be made as, or converted to, Base Rate Loans; provided , that so long as no Default shall have occurred and be continuing, if the Administrative Agent shall not have otherwise received notice of conversion or continuation of outstanding Eurodollar Rate Loans, the applicable Eurodollar Rate Loans shall automatically be continued as Eurodollar Rate Loans with an Interest Period of one month as provided above. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Borrower requests a Revolving Credit Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. In the case of automatic continuations of Eurodollar Rate Loans, the failure of the Administrative Agent to receive a notice of conversion or continuation shall be deemed to constitute a notice of continuation and the Administrative Agent and the Lenders shall be entitled to rely conclusively on such deemed notice without further inquiry regardless of whether the Borrower shall otherwise have, or asserts that it has, delivered a notice of conversion or continuation.

 

(b) Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Revolving Credit Loans, and if no timely notice of a conversion or continuation is provided by the Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(a) . Each Appropriate Lender shall make the amount of its Revolving Credit Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Revolving Credit Borrowing is the Initial Credit Extension, Section 4.01 ), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i)

 

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crediting the account of the Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided , however , that if, on the date a Committed Loan Notice with respect to a Revolving Credit Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Revolving Credit Borrowing, first , shall be applied to the payment in full of any such L/C Borrowings, and second , shall be made available to the Borrower as provided above.

 

(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Revolving Credit Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

 

(d) The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Bank of America’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

 

(e) After giving effect to all Revolving Credit Borrowings, all conversions of Revolving Credit Loans from one Type to the other, and all continuations of Revolving Credit Loans as the same Type, there shall not be more than 7 Interest Periods in effect in respect of the Revolving Credit Facility.

 

(f) Anything in this Section 2.02 to the contrary notwithstanding, the Borrower may not select (i) Eurodollar Rate for the Initial Credit Extension or (ii) Interest Periods for Eurodollar Rate Loans that have a duration of more than one month during the period from the date hereof to the date that is 60 days after the Closing Date or, if earlier, the date on which the Commitments of Bank of America and its Affiliates are equal to or less than $20,000,000.

 

2.03 Letters of Credit . (a)  The Letter of Credit Commitment . (i) Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03 , (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrower, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) , and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings at such time shall not exceed the Borrowing Base Availability at such time, (y) the aggregate Outstanding Amount of the Revolving Credit Loans of any Lender plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations shall not exceed the lesser such Lender’s Commitment and such Lender’s Applicable Percentage of the Borrowing Base Availability, and (z) the Outstanding Amount of the L/C Obligations at such time shall not exceed the Letter of Credit Sublimit. Each request by the Borrower for the issuance or

 

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amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

 

(ii) The L/C Issuer shall not issue any Letter of Credit if:

 

(A) the expiry date of such requested Letter of Credit would occur more than twelve months after the date of issuance, unless the Required Lenders have approved such expiry date; or

 

(B) the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.

 

(iii) The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

 

(B) the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer;

 

(C) except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial stated amount less than $500,000;

 

(D) such Letter of Credit is to be denominated in a currency other than Dollars;

 

(E) such Letter of Credit contains any provisions for automatic reinstatement of the stated amount after any drawing thereunder; or

 

(F) a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the L/C Issuer has entered into satisfactory arrangements with the Borrower or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.

 

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(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof.

 

(v) The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

(vi) The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

 

(b) Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit . (i) Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may require. Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

 

(ii) Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least

 

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one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower (or the applicable Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

 

(iii) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “ Auto-Extension Letter of Credit ”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “ Non-renewal Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided , however , that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii)  of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-renewal Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

 

(iv) If the Borrower so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole and absolute discretion, agree to issue a Letter of Credit that permits the automatic reinstatement of all or a portion of the stated amount thereof after any drawing thereunder (each, an “ Auto-Reinstatement Letter of Credit ”). Unless otherwise directed by the L/C Issuer, the Borrower shall not be required to make a specific request to the L/C Issuer to permit such reinstatement. Once an Auto-Reinstatement Letter of Credit has been issued, except as provided in the following sentence, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to reinstate all or a portion of the stated amount thereof in accordance with the provisions of such Letter of Credit. Notwithstanding the foregoing, if such Auto-Reinstatement Letter of Credit permits the L/C Issuer to decline to reinstate all or any portion of the stated amount thereof after a drawing thereunder by giving notice of such non-reinstatement within a specified number of days after such drawing (the “ Non-Reinstatement Deadline ”), the L/C Issuer shall not permit such reinstatement if it has received a notice (which may be by telephone or in writing) on or before the day that is five Business Days before the Non-Reinstatement Deadline (A) from the Administrative Agent that the Required Lenders have

 

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elected not to permit such reinstatement or (B) from the Administrative Agent, any Lender or the Borrower that one or more of the applicable conditions specified in Section 4.02 is not then satisfied (treating such reinstatement as an L/C Credit Extension for purposes of this clause ) and, in each case, directing the L/C Issuer not to permit such reinstatement.

 

(v) Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

 

(c) Drawings and Reimbursements; Funding of Participations . (i) Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof. The Borrower shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing (A) if such notice is received prior to 1:00 p.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “ Honor Date ”), not later than 4:00 p.m. on such date and (B) if such notice is received after 1:00 p.m., not later than 11:00 a.m. on the next Business Day. If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “ Unreimbursed Amount ”), and the amount of such Lender’s Applicable Percentage thereof. In such event, the Borrower shall be deemed to have requested a Revolving Credit Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Revolving Credit Facility and the conditions set forth in Section 4.02 (other than the delivery of a Committed Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

 

(ii) Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available to the Administrative Agent for the account of the L/C Issuer at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii) , each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii) With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Credit Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender’s payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be

 

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deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03 .

 

(iv) Until each Lender funds its Revolving Credit Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

 

(v) Each Lender’s obligation to make Revolving Credit Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c) , shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided , however , that each Lender’s obligation to make Revolving Credit Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Committed Loan Notice ). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

 

(vi) If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii) , the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

 

(d) Repayment of Participations . (i) At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c) , if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Lender’s L/C Advance was outstanding) in the same funds as those received by the Administrative Agent.

 

(ii) If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by

 

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the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

 

(e) Obligations Absolute . The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

 

(i) any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii) the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

 

(iii) any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

 

(iv) any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

 

(v) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any of its Subsidiaries.

 

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will notify the L/C Issuer promptly and in any event not later than one Business Day after such receipt. The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

 

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(f) Role of L/C Issuer . Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided , however , that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i)  through (v)  of Section 2.03(e) ; provided , however , that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves were caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g) Cash Collateral . Upon the request of the Administrative Agent, (i) if the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing during the continuation of, or results in, a Default, or (ii) if, as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, the Borrower shall immediately Cash Collateralize, in the case of clause (i) , the Outstanding Amount of the L/C Obligations in respect of such Letter of Credit, and, in the case of clause (ii) , the then Outstanding Amount of all L/C Obligations. Sections 2.04 and 8.02(c) set forth certain additional requirements to deliver Cash Collateral hereunder. For purposes of this Section 2.03 , Section 2.04 and Section 8.02(c) , “ Cash Collateralize ” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances (collectively, “ Cash Collateral ”) pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby consented to by the Lenders). Derivatives of such term have corresponding meanings. The Borrower hereby grants to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, a security interest in all such cash, deposit accounts and all balances therein and all proceeds of the foregoing. Cash

 

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Collateral shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. If at any time the Administrative Agent determines that any funds held as Cash Collateral are subject to any right or claim of any Person other than the Administrative Agent or that the total amount of such funds is less than the aggregate Outstanding Amount of all L/C Obligations, the Borrower will, forthwith upon demand by the Administrative Agent, pay to the Administrative Agent, as additional funds to be deposited as Cash Collateral, an amount equal to the excess of (x) such aggregate Outstanding Amount over (y) the total amount of funds, if any, then held as Cash Collateral that the Administrative Agent determines to be free and clear of any such right and claim. Upon the drawing of any Letter of Credit for which funds are on deposit as Cash Collateral, such funds shall be applied, to the extent permitted under applicable law, to reimburse the L/C Issuer.

 

(h) Applicability of ISP and UCP . Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.

 

(i) Letter of Credit Fees . The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage a Letter of Credit fee (the “ Letter of Credit Fee ”) for each Letter of Credit equal to the Applicable Rate applicable to Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . Letter of Credit Fees shall be (A) computed on a quarterly basis in arrears and (B) due and payable on the last Business Day of each of March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Default under Section 8.01(a), (f) or (g)  exists, all Letter of Credit Fees shall accrue at the Default Rate.

 

(j) Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer . The Borrower shall pay directly to the L/C Issuer for its own account a fronting fee with respect to each Letter of Credit, at 0.25%  per annum , computed on the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears, and due and payable on the last Business Day of each of March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06 . In addition, the Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

 

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(k) Conflict with Issuer Documents . In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

 

(l) Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

 

2.04 Prepayments . (a)  Optional . The Borrower may, upon notice to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Credit Loans in whole or in part without premium or penalty; provided that (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $100,000 or a whole multiple of $50,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Revolving Credit Loans to be prepaid. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable Percentage). If such notice is given by the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon, together with any additional amounts required pursuant to Section 3.05 .

 

(b) Mandatory . (i) If for any reason the Total Outstandings at any time exceed the lesser of the Borrowing Base at