Common use of Calculation of EBITDA Clause in Contracts

Calculation of EBITDA. (a) At any time that RHC's EBITDA is calculated pursuant to this Agreement, such calculation shall be prepared in accordance with the accounting practices of Mortuary and the Association in effect on the Closing Date, without giving effect to any modifications to such accounting and business practices made subsequent to the Closing Date, regardless of whether such modifications were made pursuant to the promulgation of rules, regulations or statutes applicable to RHC, changes in GAAP or otherwise provided, however, that EBITDA for the Entry Relevant Period shall be adjusted to reflect payment of property taxes and non-consolidation of the Endowment Care Fund as a result of RHC's for-profit status. (b) In the event that the ASA is terminated or reduced in scope prior to the Exercise Date, then Pro Forma EBITDA for the Entry Relevant Period will be restated to reflect the incremental expense RHC would have incurred in fiscal years 1997 and 1998 had the ASA not been in place during those years or had been in place but only on a comparably reduced scope basis, as the case may be. (c) Notwithstanding paragraph (a) above and regardless of proper GAAP accounting, in the event payments pursuant to the long term incentive plan for RHC management are due on or as a result of the exercise of an Option, such payments will be expensed on a straight line basis from the Closing Date to the Exercise Date for purposes of computing Pro Forma EBITDA for the Entry Relevant Period and EBITDA for the Exit Relevant Period. (d) To the extent any Acquisitions are consummated during 1997 or 1998, in calculating Pro Forma EBITDA for the Entry Relevant Period, EBITDA shall be calculated on a pro forma basis to exclude the Acquisition EBITDA attributable to such Acquisitions. In calculating EBITDA and Acquisition EBITDA for any period, all overhead charges shall be allocated among Rose Hills and the Satellite Properties, on the one hand, and the various businesses acquired in the relevant Acquisition or Acquisitions, on the other hand, based on their relative total net sales during the relevant period. (e) Notwithstanding anything to the contrary contained herein, EBITDA shall not include any nonrecurring income or expense or any impact or any earnings attributable to the withdrawal of all or part of any reserve established or in existence in connection with any trust fund maintained by RHC. (f) Notwithstanding anything contained herein to the contrary, in the event there are any year to year increases in the aggregate lease expense associated with the Satellite Properties that are in excess of a rate per annum of 5%, such "excess" increase in lease expense shall be excluded as an expense item in calculating EBITDA. (g) The various amounts calculated in accordance with Article III shall be subject to subsequent adjustment based on relevant events that occur after such calculations are made. Such adjusted amounts shall be calculated by the chief financial officer of Holdings, and the notification, dispute, and dispute resolution mechanisms described in Section 3.5(b) shall apply, mutatis mutandis, to such adjustment process.

Calculation of EBITDA. (a) At any time that RHC's EBITDA is calculated pursuant least seven (7) days prior, but no earlier than fourteen (14) days prior, to this Agreement, such calculation shall the date expected to be prepared in accordance with the accounting practices of Mortuary and the Association in effect on the Closing DateDate as agreed between the Parties, without giving effect to any modifications to Seller shall give Buyer written notice of (i) such accounting and business practices made subsequent to expected date of the Closing Dateand (ii) the amount, regardless reasonably estimated by Seller, acting in good faith, of whether such modifications were made pursuant to the promulgation of rules, regulations or statutes applicable to RHC, changes in GAAP or otherwise provided, however, that EBITDA for the Entry Relevant Period shall be adjusted to reflect payment of property taxes estimated Transition Services Term and non-consolidation of the Endowment Care Fund as a result of RHC's for-profit status. (b) In the event that the ASA is terminated applicable EBITDA Positive Amount or reduced in scope prior to the Exercise Date, then Pro Forma EBITDA for the Entry Relevant Period will be restated to reflect the incremental expense RHC would have incurred in fiscal years 1997 and 1998 had the ASA not been in place during those years or had been in place but only on a comparably reduced scope basisNegative Amount, as the case may be, based on the Closing Date occurring on the expected Closing date, together with such information regarding the calculation of such estimated amounts as Buyer may reasonably request. If Buyer identifies any error in any of the estimates used or computations undertaken by Seller, Buyer will promptly (and in any event within three (3) days after the receipt of such written notice from Seller) notify Seller of such error in writing with specificity (an “Error Notice”). If Buyer does not give such an Error Notice, the estimated amount of the EBITDA and the applicable EBITDA Positive Amount or EBITDA Negative Amount notified by Seller under this Section 3.7 shall be the EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be, to be applicable under the Purchase Agreement for purposes of the calculation of the Purchase Price payable by Buyer at the Closing Date. (b) If Buyer gives such Error Notice, the parties will promptly meet and review the estimates and computations and, if necessary, Seller will recalculate the EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be, to correct any error so identified and agreed by Seller, and provide such recalculated amounts to Buyer for Buyer’s review pursuant to this Section 3.7. If the parties are not in agreement as to the estimates and computation of EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be, at the time all other conditions to Closing have been satisfied or waived, the EBITDA and applicable EBITDA Positive Amount or EBITDA Negative Amount, as the case may be, under the Purchase Agreement shall be the last amounts estimated by Seller pursuant to this Section 3.7 (the “Closing EBITDA Amounts”); provided that, in the event that the amount in dispute between the parties with respect to the Closing EBITDA Amounts is greater than or equal to $100,000, then the parties agree that, as part of the Closing procedures under the Purchase Agreement, an amount equal to such disputed amount shall be deducted from the Purchase Price and deposited into the Escrow Account, subject to release from the Escrow Account only upon the Joint Written Direction of Seller and Wellhead. (c) Notwithstanding paragraph If the Closing shall be delayed for any reason for more than five (a5) above and regardless of proper GAAP accounting, Business Days after the expected Closing Date assumed in the event payments pursuant to the long term incentive plan for RHC management are due on or as a result of the exercise of an Optionnotices delivered by Seller under this Section 3.7, such payments will be expensed on a straight line basis from notices shall become void and Seller shall send another written notice to Buyer for the newly expected Closing Date to the Exercise Date for purposes of computing Pro Forma EBITDA for the Entry Relevant Period and EBITDA for the Exit Relevant Periodin accordance with this Section 3.7. (d) To If the extent Purchase Price is determined on the basis of disputed Closing EBITDA Amounts under this Section 3.7, after the Closing Date, the parties will continue to work in good faith to resolve any Acquisitions are consummated disagreement among the parties with respect to the Closing EBITDA Amounts, as the case may be, utilized to determine the Purchase Price and to determine any mutually agreed revised amounts within thirty (30) days following the Closing Date (the “EBITDA Adjustment Period”), taking into account all financial information and reports received or updated during 1997 that period with respect to the EBITDA calculations (it being understood that during the EBITDA Adjustment Period, Buyer and Seller may revise their respective estimates used for the Closing EBITDA Amounts). If (i) the parties agree on a revised EBITDA and EBITDA Positive Amount or 1998EBITDA Negative Amount, as the case may be, during the EBITDA Adjustment Period or (ii) the parties do not so agree during the EBITDA Adjustment Period and there is a final determination of such dispute in accordance with this Agreement of the applicable EBITDA and EBITDA Positive Amount or EBITDA Negative Amount, as the case may be (in the case of a resolution under either of clause (i) and (ii), the “Final EBITDA Amounts”), the Purchase Price amount under the Purchase Agreement shall be recalculated using such Final EBITDA Amounts (the “Revised Purchase Price Amount”) and (1) if the Revised Purchase Price Amount is greater than the amount of the Purchase Price paid under the Purchase Agreement, Buyer shall pay to Seller such differential and (2) if the Revised Purchase Price Amount is less than the amount of the Purchase Price paid under the Purchase Agreement, Seller shall pay to Buyer such differential, in calculating Pro Forma EBITDA for each case together with interest thereon at a rate equal to the Entry Relevant Periodprime rate as published by Bank of America from the Closing Date until the date such payment is made, EBITDA shall be calculated on a pro forma basis in immediately available finds by wire transfer to exclude the Acquisition EBITDA attributable accounts designated in writing by the Party entitled to such Acquisitionspayment. In calculating If a Final EBITDA Amounts is determined pursuant to clause (ii) above, the Party determined pursuant to such final determination to be most in error in its proposed applicable Final Adjusted Amounts shall bear all of the costs of the proceedings leading to such final determination, including the reasonable legal costs and Acquisition EBITDA expenses of the other Party with respect thereto, and shall reimburse the other Party for any period, all overhead charges shall be allocated among Rose Hills and such amounts incurred by the Satellite Properties, on other Party at the one hand, and time of making the various businesses acquired payment referenced in the relevant Acquisition or Acquisitions, on the other hand, based on their relative total net sales during the relevant periodimmediately preceding sentence. (e) Notwithstanding anything Nothing in this Section 3.7 shall be construed to modify or affect the contrary contained herein, EBITDA shall not include any nonrecurring income effectiveness or expense or any impact or any earnings attributable to the withdrawal of all or part of any reserve established or in existence in connection with any trust fund maintained by RHC. (f) Notwithstanding anything contained herein to the contrary, in the event there are any year to year increases in the aggregate lease expense associated with the Satellite Properties that are in excess timing of a rate per annum Closing under the Purchase Agreement on the basis of 5%, such "excess" increase in lease expense shall be excluded as an expense item in calculating EBITDAdisputed Closing EBITDA Amounts. (g) The various amounts calculated in accordance with Article III shall be subject to subsequent adjustment based on relevant events that occur after such calculations are made. Such adjusted amounts shall be calculated by the chief financial officer of Holdings, and the notification, dispute, and dispute resolution mechanisms described in Section 3.5(b) shall apply, mutatis mutandis, to such adjustment process.