Common use of Changes in Accounting Principles Clause in Contracts

Changes in Accounting Principles. If, after the date of this Agreement, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 5.1 and such change shall result in a change in the method of calculation of any financial covenant (if any), standard or term found in this Agreement, either Borrowers or the applicable Lenders may by notice to the other, respectively, require that the Lenders and Borrowers negotiate in good faith to amend such covenants, standards, and terms so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of any Borrower and its Subsidiaries shall be the same as if such change had not been made. No delay by any Borrower or the applicable Lenders in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles. Until any such covenant, standard, or term is amended in accordance with this Section 1.3, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting principles. Notwithstanding anything to the contrary above or in the definition of “Capitalized Lease Obligation”, for purposes of all calculations and deliverables under this Agreement or any other Loan Document, (a) any lease that would have been categorized as an operating lease as determined in accordance with GAAP prior to giving effect to (i) the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (ASC 842) or (ii) any changes in GAAP subsequent to the Closing Date, shall continue to be deemed an operating lease for all purposes hereunder, and (b) in the event of a change under GAAP (or the application thereof) requiring all leases to be capitalized, only those leases that would result or would have resulted in Capitalized Lease Obligations on the Closing Date hereunder (subject to the foregoing clause (a)) shall be considered capital leases hereunder. Without limiting the generality of the foregoing, Borrowers shall neither be deemed to be in compliance with financial covenant (if any) hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be, would not exist but for the occurrence of a change in accounting principles after the date hereof.