Definition of 1.10 "Applicable Margin


1.10 "Applicable Margin means, at any time, with respect to any Prime Rate Loan or Eurodollar Rate Loan, the applicable rate per annum set forth below under the caption "Prime Spread" or "Eurodollar Spread", as the case may be, based upon the Consolidated Fixed Charge Coverage Ratio of Parent Guarantor and its Subsidiaries during the four (4) fiscal quarters ending on the most recent determination date: Level Consolidated Fixed Charge Coverage Ratio ("CFCCR") Prime Spread Eurodollar Spread Tier I CFCCR<1.10 to 1.0 1.0% 2.75% Tier II CFCCR>1.10 to 1.0 and <1.35 to 1.0 0.75% 2.50% Tier III CFCCR>1.35 to 1.0 0.50% 2.25% provided, however, that, notwithstanding the foregoing, if the Excess Availability on the date on which the "Applicable Margin" would otherwise be adjusted pursuant to clause (b) below is less than $10,000,000, the "Applicable Margin" shall be the applicable rate per annum set forth above in Tier I. For purposes of the foregoing, (a) the Applicable Margin shall be determined as of the end of each fiscal year or quarter of Parent Guarantor based upon the audited yearly or quarterly financial statements delivered pursuant to Section 9.6(a), and (b) each change in the Applicable Margin resulting from the Consolidated Fixed Charge Coverage Ratio of Parent Guarantor and its Subsidiaries shall be effective during the period commencing on and including the first day of the month immediately following the date of delivery to Agent of such financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Consolidated Fixed Charge Coverage Ratio shall be deemed to be in Tier I at the option of Agent or at the request of the Required Lenders if Parent Guarantor fails to deliver the audited yearly or quarterly financial statements required to be delivered by it pursuant to Section 9.6(a) hereof, during the period from the expiration of the time for delivery thereof until such financial statements are delivered. If any such financial statements overstate the Consolidated Fixed Charge Coverage Ratio, and if as a result of such overstatement, the interest and fees charged hereunder are less than what would have been charged had such financial statements accurately stated the Consolidated Fixed Charge Coverage Ratio, then Borrowers shall be responsible for the difference between the interest and fees charged as result of such overstatement and what would have been charged had such financial statements accurately stated the Consolidated Fixed Charge Coverage Ratio, and shall pay the amount of such difference to Agent upon its demand therefor."