Pro Forma and Other Calculations Sample Clauses: 415 Samples

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Secured Net Leverage Ratio and the Total Net Leverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the Secured Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) [Reserved]. (3) [Reserved]. (4) In the event that (a) the Borrower or any Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c).

Appears in 3 contracts

Sources: Super Priority Credit Agreement (WideOpenWest, Inc.), Super Priority Credit Agreement (WideOpenWest, Inc.), Credit Agreement (WideOpenWest, Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any~~. In addition, whenever a~~ . (2) For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is to made shall be calculated on a pro forma ~~basis~~basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the ~~reference to “~~case of Total Assets, on the last day of the applicable Test Period~~” for purposes~~ ). If since the beginning of ~~calculating~~ any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be ~~deemed~~ calculated to give pro forma effect thereto in accordance with this Section 1.07; provided that with respect to any pro forma calculations to be ~~a reference to, and shall be based on,~~ made in connection with any acquisition or investment in respect of which financial statements for the ~~most recently ended~~ relevant target are not available for the same Test Period for which internal financial statements of the Borrower are available, the Borrower shall determine such pro forma calculations on the basis of the available financial statements (even if for differing periods) or such other basis as determined ~~in good faith~~ on a commercially reasonable basis by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) [Reserved]. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Original Transactions and, for the avoidance of doubt, acquisitions occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than eighteen (18) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction) and (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period; provided, that the aggregate amount of any such “run rate” adjustments added back pursuant to this Section 1.07 and clause (l) of the definition of “Consolidated EBITDA” shall not exceed in the aggregate 25% of Consolidated EBITDA for such period (as calculated before giving effect to any such “run rate” adjustments). (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not ~~replaced~~replaced and, for the avoidance of doubt, in the event an item of Indebtedness, Disqualified Stock or Preferred Stock (or any portion thereof) is incurred or issued, any Lien is incurred or other transaction is undertaken in reliance on a ratio Basket based on the Interest Coverage Ratio, First Lien Net Leverage Ratio, Secured Net Leverage Ratio and the Total Net Leverage Ratio, such ratio(s) shall be calculated without regard to the incurrence of any Indebtedness under any revolving facility in connection therewith), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period) and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period~~; provided~~. (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, ~~however~~the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, ~~that~~ a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, at the election of the Borrower, ~~the~~ no pro forma ~~calculation will~~ effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not ~~give~~ be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything to the contrary contained herein, in the event any item of Indebtedness (including any Class of Indebtedness incurred under this Agreement (including pursuant to Section 2.14)), Disqualified Stock or Preferred Stock, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action (or any of the foregoing in a single transaction or a series of substantially concurrent related transactions) meets the criteria of one or more than one of the categories of Baskets under this Agreement (including within any defined terms), including any financial ratio based Baskets (including the Interest Coverage Ratio, First Lien Net Leverage Ratio, Secured Net Leverage Ratio and the Total Net Leverage Ratio), (i) unless otherwise expressly provided in this Agreement, the Borrower may, in its sole discretion, divide and classify and later re-divide and reclassify on or more occasions (based on circumstances existing on the date of any such re-division and reclassification) any such item of Indebtedness (including any Class of Indebtedness incurred under this Agreement (including pursuant to Section 2.14)), Disqualified Stock or Preferred Stock, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action, in whole or in part, among one or more than one categories of Baskets under this Agreement, and (ii) availability and utilization of any category of financial ratio based Baskets (i.e., incurrence-based Baskets) with respect to any covenant (and including clause (D) of the Available Incremental Amount for purposes hereof) shall first be calculated without giving effect to the amount or portion of any item of Indebtedness, Disqualified Stock or Preferred Stock, Lien, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action to be utilized under any other category of Baskets under such covenant (or the Available Incremental Amount, as applicable) at such time of determination (including at the time of any initial division and classification and any later re-divisions and reclassifications) and thereafter, availability and utilization of any category of Baskets that are not financial ratio based (including all Baskets based on fixed Dollar amounts or a percentage of Consolidated EBITDA or total assets under such covenant (including, as applicable, under clause (A)(1) of the Available Incremental Amount)) shall be calculated; provided that all Indebtedness (x) incurred hereunder on ~~such determination date~~ the Closing Date and (y) represented by the Indebtedness pursuant to the ~~provisions described~~ Second Lien Credit Documents and related Guarantees on the Closing Date will, at all times, be treated as incurred on the Closing Date under Section 7.02(b)(1) and (2), respectively, and may not be reclassified. Each item of Indebtedness, Disqualified Stock or Preferred Stock, Lien, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action will be deemed to have been incurred, issued, made or taken first, to the extent available, pursuant to any available categories of financial ratio based Baskets (including the Interest Coverage Ratio, First Lien Net Leverage Ratio, Secured Net Leverage Ratio and the Total Net Leverage Ratio) as set forth above prior to any other category of Baskets. If any item of Indebtedness (including any Class of Indebtedness incurred under this Agreement (including pursuant to Section 2.14)), Disqualified Stock or Preferred Stock, Lien, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action (or any portion of the foregoing) previously divided and classified (or re-divided and reclassified) as set forth above under any category of non-financial ratio based Baskets could subsequently be re-divided and reclassified under a category of financial ratio based Baskets (including the Interest Coverage Ratio, Senior Secured Net Leverage Ratio or Total Net Leverage Ratio (including clause (D) of the Available Incremental Amount)), such re-division and reclassification shall be deemed to occur automatically and item of Indebtedness, Disqualified Stock or Preferred Stock, Lien, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action (or any portion of the foregoing) shall cease to be deemed made or outstanding for purposes of any category of Baskets that are not financial ratio based. (9) If any item of Indebtedness, Disqualified Stock or Preferred Stock, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action (any of the foregoing in ~~Section 7.02(c~~a single transaction or a series of substantially concurrent related transactions) is incurred, issued, taken or consummated in reliance on categories of Baskets measured by reference to a percentage of Consolidated EBITDA, and any Indebtedness, Disqualified Stock or Preferred Stock, Lien, Permitted Lien, Restricted Payment, Permitted Investment or other transaction or action (including in connection with refinancing thereof) would subsequently exceed the applicable percentage of Consolidated EBITDA if calculated based on the Consolidated EBITDA on a later date (including the date of any refinancing), such percentage of Consolidated EBITDA will not be deemed to be exceeded (and in the case of refinancing any Indebtedness, Disqualified Stock or Preferred Stock, to the extent the principal amount or the liquidation preference of such newly incurred or issued Indebtedness, Disqualified Stock or Preferred Stock does not exceed the maximum principal amount, liquidation preference or amount of Refinancing Indebtedness in respect of the Indebtedness, Disqualified Stock or Preferred Stock being refinanced, extended, replaced, refunded, renewed or defeased). (10) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating the availability under any Bas

Appears in 3 contracts

Sources: First Lien Credit Agreement (McAfee Corp.), First Lien Credit Agreement (McAfee Corp.), First Lien Credit Agreement (McAfee Corp.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Secured~~ First Lien Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4), (5) or (57) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; ~~provided however~~ provided, however, that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time ~~any mandatory~~ such prepayment pursuant to Section 2.05(2)(a) is due ~~for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any~~but shall not be given pro forma effect thereafter. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)level). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Run-Rate Adjusted EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07 as if such Specified Transaction had occurred at the beginning of the most recently ended Test Period. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, synergies and operating expense reductions resulting from or related to any such Specified Transaction (including the Transactions) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of any such Specified Transaction(calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are (i) reasonably identifiable and factually supportable in the good faith judgment of the Borrower and (ii) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of such Specified Transaction and (b) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Run-Rate Adjusted EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except in the case of the Fixed Charge Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period) and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section ~~7.02(c~~7.02(b). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Run-Rate Adjusted EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Run-Rate Adjusted EBITDA in connection with incurrence of Indebtedness, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as restricted or unrestricted or the repayment of Indebtedness, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) the satisfaction of all other conditions precedent to the incurrence with of Indebtedness, the creation of Liens, the making of any disposition, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as restricted or unrestricted or the repayment of Indebtedness, in each case in connection with a Limited Condition Acquisition, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Acquisition, an “LCA Election”), be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”). If on a pro forma basis after giving effect to such Limited Condition Acquisition and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) such ratios and other provisions are calculated as if such Limited Condition Acquisition or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCA Test Date for which financial statements are available, the Borrower could have taken such action on the relevant LCA Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6), shall be continuing on the date such Limited Condition Acquisition is consummated. For the avoidance of doubt, (i) if any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Run-Rate Adjusted EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Acquisition, such ratios and other provisions will not be deemed to have been exceeded as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Acquisition or related Specified Transactions, unless on such date an Event of Default pursuant to Section 8.01(1) or 8.01(6) shall be continuing. If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio or Basket availability with respect to any other Specified Transaction on or following the relevant LCA Test Date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition, any such ratio or Basket shall be calculated on a pro forma basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) had been consummated on the LCA Test Date; provided that for purposes of any such calculation of the Fixed Charge Coverage Ratio, Consolidated Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Acquisition based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Borrower in good faith. Notwithstanding anything in this Agreement or any Loan Document to the contrary, if the Borrower or its Restricted Subsidiaries (x) incurs Indebtedness, creates Liens, makes Asset Sales, makes Investments, makes Restricted Payments, designates any Subsidiary as restricted or unrestricted or repays any Indebtedness in connection with any Limited Condition Acquisition under a ratio-based Basket and (y) incurs Indebtedness, creates Liens, makes Asset Sales, Investments or Restricted Payments, designates any Subsidiary as restricted or unrestricted or repays any Indebtedness in connection with such Limited Condition Acquisition under a non-ratio-based Basket (which shall occur within five Business Days of the events in clause (x) above), then the applicable ratio will be calculated with respect to any such action under the applicable ratio-based Basket without regard to any such action under such non-ratio-based Basket made in connection with such Limited Condition Acquisition.

Appears in 3 contracts

Sources: Credit Agreement (Life Time Group Holdings, Inc.), Credit Agreement (Life Time Group Holdings, Inc.), Credit Agreement (Life Time Group Holdings, Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio and the Total Net Leverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” ”, (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In ~~addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period”~~ addition for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2))level. (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of such Specified Transaction (or such actions are undertaken or implemented prior to the consummation of such Specified Transaction), and (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified ~~Stock,~~ Stock or (c) any Restricted Subsidiary issues, repurchases or redeems Preferred ~~Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments~~Stock, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, ~~issuance,~~ issuance or repurchase or redemption of Disqualified Stock or Preferred Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each case to the extent required, as if the same had occurred on the last day of the applicable Test ~~Period and~~Period, in ~~the~~ which case such incurrence, issuance, repayment or redemption of Indebtedness ~~for all purposes~~ or issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, in each case will be given effect, as if ~~such Indebtedness in~~ the ~~full amount~~ same had occurred on the first day of ~~any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period~~the applicable Test Period); provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c).

Appears in 2 contracts

Sources: Credit Agreement (GreenSky, Inc.), Credit Agreement (GreenSky, Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section ~~1.07,~~ 1.07 when calculating the ~~Secured~~ First Lien Net Leverage Ratio, Total Senior Net Leverage Ratio or Total Net Leverage Ratio, as applicable, for purposes of (a) the definition of “Applicable Rate,” , “ (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Effective Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction); provided further that, with respect to the Transactions, such period shall be thirty-six (36) months, and (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period) and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties (in the case of Specified Representations, subject to Section 2.14) or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election,” which LCT Election may be in respect of one or more of clauses (a), (b), (c) and (d) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “ LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which internal financial statements are available, the Borrower could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6) shall be continuing on the date such Limited Condition Transaction is consummated. For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions, unless, other than if an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6), shall be continuing on such date, the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction or related Specified Transactions is consummated. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction or the date the Borrower makes an election pursuant to clause (y) of the immediately preceding sentence, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date; provided that for purposes of any such calculation of the Interest Coverage Ratio, Consolidated Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Transaction based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Borrower in good faith. Notwithstanding anything in this Agreement or any Loan Document to the con

Appears in 2 contracts

Sources: Credit Agreement (Superior Industries International Inc), Credit Agreement (Superior Industries International Inc)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Secured Net Leverage ~~Ratio and~~ Ratio, the Total Net Leverage Ratio and the Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the Secured Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and cost synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions and dispositions occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and cost synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and cost synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and cost synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than thirty-six (36) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction and (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period; provided further that the aggregate amount of pro forma adjustments made pursuant to this Section 1.07(3) for any Test Period and any additions made to Consolidated EBITDA pursuant to clause (1)(o) of the definition thereof shall not exceed in the aggregate 33.0% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to any adjustments pursuant to this Section 1.07(3) and clause (1)(o) of the definition of Consolidated EBITDA). (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except in the case of the Fixed Charge Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period) and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom (other than Section 4.02 in the case of any Credit Extension under the Revolving Facility), (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein (other than Section 4.02 in the case of any Credit Extension under the Revolving Facility), or (d) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election,” which LCT Election may be in respect of one or more of clauses (a), (b), (c) and (d) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which internal financial statements are available, the Borrower could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with. For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions, unless the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction or related Specified Transactions is consummated. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction or the date the Borrower makes an election pursuant to the immediately preceding sentence, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date; provided that for purposes of any such calculation of the Fixed Charge Coverage Ratio, Consolidated Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Transaction based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Borrower in good faith. Notwithstanding anything in this Agreement

Appears in 2 contracts

Sources: Credit Agreement (WideOpenWest, Inc.), Credit Agreement (WideOpenWest, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests or other calculations of financial terms, including the Consolidated Total Net Leverage Ratio, the Consolidated Secured Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; provided that notwithstanding anything to the contrary in ~~clauses (2~~Section 1.08(b), (~~3), (4~~c) or (~~5) of this Section 1.07~~d), when calculating the Consolidated Secured Net Leverage Ratio for purposes of determining actual compliance (aand not Pro Forma Compliance or compliance on a Pro Forma Basis) ~~the definition of “Applicable Rate,” (b)~~ with Section ~~2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant)~~7.11, the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, (x) whenever a financial ratio or test or other financial definition is to be calculated on a pro forma basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test or financial definition shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in reasonable good faith by the Borrower) and which have been delivered to the Administrative Agent (it being understood that for purposes of ~~(x)~~ determining ~~pro forma compliance~~ Pro Forma Compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated ~~level~~ level) and (y) in connection with any Limited Condition Transaction, for purposes of determining ~~actual~~ compliance with (1) any provision of this Agreement which requires compliance with any representations and ~~not pro forma compliance~~warranties set forth herein, (2) any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom or (3) any test or covenant contained in this Agreement during any period which requires the calculation of any applicable ratios that are measured as a percentage of Consolidated EBITDA, and, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCA Election”) the ~~Financial Covenant, the reference to “Test Period”~~ date of determination for any such compliance or calculation of any such ratios shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCA Test Date”) and if, after giving Pro Forma Effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent applicable date of determination ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratio, such ratio shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCA Election and any of the ratios for which compliance was determined or tested as of the LCA Test Date are exceeded as a ~~reference to~~result of fluctuations in any such ratio, including due to fluctuations in Consolidated EBITDA of the Borrower or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded or failed to be satisfied as a result of such fluctuations and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction unless the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction is consummated. If the Borrower has made an LCA Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with Section 7.11) on or following the relevant LCA Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date the Borrower makes an election pursuant to the immediately preceding sentence or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and if with respect to any determination or testing of any ratio with respect to any Restricted Payment, and ~~shall be based on,~~ also on a standalone basis without assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of debt and the ~~most recently ended Test Period for which financial statements~~ use of proceeds thereof) have been ~~or are required to be delivered pursuant to Section 6.01(1) or (2))~~consummated. (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test or other financial definition, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to Section 1.08(d)) that have been made (i) during the applicable Test Period and (ii) if applicable as described in Section 1.08(a), subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio, test or definition is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day (or, in the case of the determination of Total Assets, the last day) of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any other Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or other financial definition, including Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, operating initiatives, operating changes and synergies were realized during the entirety of such period) and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests or other financial definitions and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or expected to be taken no later than 24 months after the date of such Specified Transaction, and (C) no amounts shall be added pursuant to this Section 1.08(c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period. (4d) In the event that ~~(a)~~ the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness included in the calculations of any financial ratio, test or other financial definition (in each case, other than Indebtedness incurred or repaid under any revolving credit ~~facility or line of credit unless such Indebtedness has been permanently repaid and not replaced~~facility), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subject to Section 1.08(a) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ~~ratio~~ ratio, test or definition is made, then such financial ~~ratio~~ ratio. test or ~~test~~ definition shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case~~ to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement, or extinguishment of Indebtedness ~~for all purposes~~ will be given effect as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full amount~~ date of ~~any undrawn Designated Revolving Commitments~~ the event for which the calculation of the Interest Coverage Ratio is made had been ~~incurred thereunder throughout~~ the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such ~~period; provided, however, that~~ Indebtedness). Interest on Capitalized Leases shall be deemed to accrue at ~~the election~~ an interest rate determined in reasonable good faith by a Responsible Officer of the ~~Borrower~~Borrower to be the rate of interest implicit in such Capitalized Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the ~~pro forma calculation will not give effect to any Indebtedness incurred on~~ rate actually chosen, or if none, then based upon such ~~determination date pursuant to~~ optional rate chosen as the ~~provisions described in Section 7.02(c)~~Borrower or Restricted Subsidiary may designate.

Appears in 2 contracts

Sources: Credit Agreement (Playa Hotels & Resorts N.V.), Credit Agreement (Playa Hotels & Resorts N.V.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage ~~Ratio and~~ Ratio, the Total Net Leverage Ratio, the Fixed Charge Coverage Ratio and the Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section ~~1.07,~~ 1.07 when calculating the Secured Net Leverage Ratio, Total Net Leverage Ratio or the Fixed Charge Coverage Ratio, as applicable, for purposes of (a) ~~the definition of “Applicable Rate,”~~ [reserved], (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which ~~internal~~ financial statements of the Borrower ~~are available (~~have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as ~~determined in good faith by the Borrower)~~ applicable (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Permitted Acquisition, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Permitted Acquisition which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Permitted Acquisition; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twelve (12) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction), (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (d) the aggregate amount of cost savings, operating expense reductions and synergies included pursuant to this Section 1.07(3), taken together with the aggregate amount included pursuant to clause (l) of the definition of Consolidated EBITDA, shall not exceed 15% of Acquired EBITDA (prior to giving effect to clause (l) of the definition of Consolidated EBITDA or this Section 1.07(3)). (4) In the event that (a) the Borrower or any Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, or (c) any Subsidiary issues, repurchases or redeems Preferred Stock ~~or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test,~~ (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, or issuance, repurchase or redemption of Disqualified Stock or Preferred Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of ~~Indebtedness for all purposes~~ the Interest Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, or issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, in each case will be given effect, as if ~~such Indebtedness in~~ the ~~full amount~~ same had occurred on the first day of ~~any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period~~the applicable Test Period); provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which financial statements of the Borrower have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as applicable (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties (in the case of Specified Representations, subject to Section 2.14) or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election,” which LCT Election may be in respect of one or more of clauses (a), (b), (c) and (d) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which financial statements of the Borrower have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as applicable, the Borrower could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6) shall be continuing on the date such Limited Condition Transaction is consummated. For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions, unless, other than if an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6), shall be continuing on such date, the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction or related Specified Transactions is consummated. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction or the date the Borrower makes an election pursuant to clause (y) of the immediately succeeding sentence, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date; provided that for purposes of any such calculation of the Interest Coverage Ratio, Consolidated Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Transaction based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Borrower in good faith. Notwithstanding anything in this Agreement or any Loan Document to the contrary, if the Borrower or the Subsidiaries (x) incurs Indebtedness, issues Disqualified Stock or Preferred Stock, creates Liens, makes Asset Sales, makes Investments, makes Restricted Payments, or repays any Indebtedness, Disqualified Stock or Preferred Stock in connection with any Limited Condition Transaction under a ratio-based Basket and (y) incurs Indebte

Appears in 2 contracts

Sources: Credit Agreement (Superior Industries International Inc), Credit Agreement (Superior Industries International Inc)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Senior Secured First Lien Net Leverage Ratio, the Senior Secured Net Leverage ~~Ratio and~~ Ratio, the Total Net Leverage Ratio, and the Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided~~ provided, that notwithstanding anything to the contrary in clauses (2b), (3c), (4d) or (5e) of this Section ~~1.07~~1.08, when calculating the Senior Secured Net Leverage Ratio and the Senior Secured First Lien Net Leverage Ratio, each as applicable, for purposes of (ai) the definition of “Applicable Rate,”, (ii) the definition of “Applicable ECF Percentage” and (biii) Section ~~2.05(2)(a) and (c) the Financial Covenant~~ 7.13 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 7.13), the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Parent Borrower are available (as determined in good faith by the Parent Borrower) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with ~~the Financial Covenant~~Section 7.13 (other than for purposes of Section 4.02(b)), if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.13 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.13 with an indicated ~~level~~ level). For the avoidance of doubt, the provisions of the foregoing sentence shall not apply for purposes of calculating the Senior Secured Net Leverage Ratio or the Senior Secured First Lien Net Leverage Ratio, each as applicable, for purposes of (i) the definition of “Applicable Rate”, (ii) the definition of “Applicable ECF Percentage” and (yiii) Section 7.13 (other than for the purpose of determining ~~actual compliance (and not~~ pro forma ~~compliance)~~ compliance with ~~the Financial Covenant~~Section 7.13), ~~the reference to “Test Period” shall be deemed to be a reference to, and~~ each of which shall be based ~~on,~~ on the ~~most recently ended Test Period for which~~ financial statements ~~have been or are required to be~~ delivered pursuant to Section ~~6.01(1~~6.01(a) or (2b), as applicable, for the relevant Test Period. (b) For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.08) that have been made (i) during the applicable Test Period or (ii) if applicable as described in clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the Applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Parent Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (c) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Parent Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies resulting from or relating to any Specified Transaction (including the Transaction) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Parent Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Parent Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twelve (12) months after the date of such Specified Transaction, (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (D) the aggregate amount of cost savings, synergies and operating expense reductions added pursuant to this clause (c) for any such period after the Closing Date, shall be limited to the extent provided in Section 1.08(f). (~~2) [Reserved]. (3) [Reserved]. (4~~d) In the event that (aw) the Parent Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility ~~or line of credit~~ unless such Indebtedness has been permanently repaid and not replaced), (bx) the Parent Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified ~~Stock~~Equity Interests , (cy) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (dz) other than for the purposes of determining compliance with Section 7.13 (including pro forma compliance with Section 7.13), the Parent Borrower or any Restricted Subsidiary establishes or eliminates (or designates or undesignates) any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase~~ or such issuance or redemption of Disqualified ~~Stock~~ Equity Interests or Preferred Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Equity Interests or Preferred Stock will be given effect, as if the same had occurred on the first day of the applicable Test Period) and for all purposes, other than for the purposes ~~as if~~ of determining compliance with Section 7.13 (including pro forma compliance with Section 7.13), such ~~Indebtedness in~~ financial ratio or test shall be calculated giving pro forma effect to the full amount of any undrawn Designated Revolving Commitments as if such full amount of Indebtedness thereunder had been incurred thereunder throughout such period. (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Parent Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Parent Borrower or Restricted Subsidiary may designate. (f) Notwithstanding anything to the contrary herein, for purposes of calculating the Senior Secured First Lien Net Leverage Ratio, the Senior Secured Net Leverage Ratio, the Total Net Leverage Ratio, and the Fixed Charge Coverage Ratio, the aggregate amount of adjustments to Consolidated EBITDA and Consolidated Net Income consisting of addbacks, pro forma adjustments and exclusions for cost savings, synergies and operating expense reductions and restructuring and similar charges pursuant to clause (vii) of the definition of Consolidated EBITDA, clause (c) of this Section 1.08 and clause (a) of the definition of Consolidated Net Income, when taken together, shall not exceed 20% of Consolidated EBITDA for such Test Period (giving pro forma effect to the relevant Specified Transaction to the extent required or permitted pursuant to Section 1.08 (other than any cost savings, synergies and operating expense reductions pursuant to Section 1.08(c)) determined prior to giving effect to any adjustments pursuant to clause (vii) of the definition of Consolidated EBITDA, clause (c) of this Section 1.08 and clause (a) of the definition of Consolidated Net Income; provided, ~~however~~that such 20% cap shall not apply to, ~~that at the election of the Borrower~~and shall be determined after giving effect to, ~~the pro forma calculation will not give effect~~ any such adjustments resulting from actions taken or with respect to ~~any Indebtedness incurred on such determination date pursuant~~ which substantial steps have been taken or were committed to be taken prior to the ~~provisions described~~ Closing Date (notwithstanding that such actions may actually be taken after the Closing Date) to the extent relating to items identified to the Lead Arrangers prior to the Closing Date or cost savings assumed in ~~Section 7.02(c)~~any forecasts, projections or model delivered to the Lead Arrangers prior to the Closing Date.

Appears in 2 contracts

Sources: Credit Agreement (Par Pharmacuetical, Inc.), Credit Agreement (Par Pharmacuetical, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including Excess Availability, the ~~Secured~~ Consolidated First Lien Leverage Ratio, the Consolidated Total Leverage Ratio, the Consolidated Net ~~Leverage~~ Cash Interest Coverage Ratio and the ~~Total Net Leverage~~ Fixed Charge Coverage Ratio ~~shall~~ and compliance with covenants determined by reference to Consolidated EBITDA, shall, in each case, be calculated (including, in each case, any component definition therein for purposes of such calculation) in the manner prescribed by this Section ~~1.07; provided that notwithstanding anything~~ 1.09. (b) For purposes of calculating any financial ratio or test or compliance with any covenant determined by reference to ~~the contrary~~ Excess Availability, Consolidated EBITDA, Specified Transactions (with any incurrence or repayment of any Indebtedness in ~~clauses~~ connection therewith to be subject to clause (~~2), (3), (4) or (5~~d) of this Section ~~1.07~~1.09) that have been made (i) during the applicable Relevant Reference Period or (ii) subsequent to such Relevant Reference Period and prior to or simultaneously with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA, is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Relevant Reference Period; provided that, when calculating the ~~Secured Net Leverage~~ Fixed Charge Coverage Ratio for purposes of determining actual compliance (aand not compliance on a Pro Forma Basis) ~~the definition of “Applicable Rate,” (b)~~ with Section ~~2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant)~~6.12, the events described in this Section ~~1.07~~ 1.09 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect~~; provided however~~ . If since the beginning of any applicable Relevant Reference Period any Person that ~~voluntary prepayments~~ subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of the Restricted Subsidiaries since the beginning of such Relevant Reference Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section ~~2.05(1~~1.09, then such financial ratio or test (or Consolidated EBITDA) ~~during any fiscal year~~ shall be calculated to give pro forma effect thereto in accordance with this Section 1.09. (~~without duplication~~ c) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of ~~any prepayments in such fiscal year that reduced~~ the Borrower and may include, for the avoidance of doubt, the amount of ~~Excess Cash Flow required~~ “run-rate” cost savings, operating expense reductions and cost synergies resulting from or relating to ~~be repaid pursuant to Section 2.05(2)(a~~any Specified Transaction (including the Transactions) ~~for any prior fiscal year) shall be~~ which is being given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio that have been realized or ~~test is~~ are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and cost synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma ~~basis~~basis as though such cost savings, operating expense reductions and synergies had been realized on the ~~reference~~ first day of such period and as if such cost savings, operating expense reductions and cost synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to ~~“Test Period” for purposes~~ be taken or with respect to which substantial steps have been taken or are expected to be taken net of ~~calculating~~ the amount of actual benefits realized during such ~~financial ratio or test~~ period from such actions, and any such adjustments shall be ~~deemed~~ included in the initial pro forma calculations of any financial ratios or tests (and in respect of any subsequent pro forma calculations in which such Specified Transaction is given pro forma effect) and during any applicable subsequent Test Period in which the effects thereof are expected to be ~~a reference to~~realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than eighteen (18) months after the date of such Specified Transaction, and (C) no amounts shall be ~~based on~~added pursuant to this clause (c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period; provided that any increase to Consolidated EBITDA as a result of add backs pursuant to this Section 1.09(c) shall be subject to the ~~most recently ended Test Period for which internal financial statements~~ limitation set forth in the final proviso of clause (vi) of the ~~Borrower are available~~ definition of “Consolidated EBITDA” (~~as determined in good faith by~~ including the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)cap set forth therein). (~~2) [Reserved]. (3) [Reserved]. (4~~d) In the event that (ax) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (in each case, other than Indebtedness incurred or repaid under any revolving credit facility or line of credit ~~unless such Indebtedness has been permanently repaid and not replaced),~~ in the ordinary course of business for working capital purposes) or (by) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable ~~Test~~ Relevant Reference Period or (ii) subject to clause (a) above, subsequent to the end of the applicable ~~Test~~ Relevant Reference Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or ~~redemption~~ extinguishment of Indebtedness, or such issuance, repurchase or redemption of Disqualified ~~Stock or Preferred~~ Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each ~~case to the extent required~~case, as if the same had occurred on the last day of the applicable ~~Test Period and~~Relevant Reference Period. (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness shall be calculated as if the rate in effect on the ~~case~~ date of determination had been the applicable rate for the entire period (taking into account any Interest Rate Agreement applicable to such Indebtedness). If any Indebtedness bears, at the option of the Borrower or a Restricted Subsidiary, a rate of interest based on a prime or similar rate, a eurocurrency interbank offered rate or other fixed or floating rate, and such Indebtedness is being given pro forma effect, the interest expense on such Indebtedness shall be calculated by applying such optional rate as the Borrower or such Restricted Subsidiary may designate. If any Indebtedness that is being given pro forma effect was Incurred under a revolving credit facility, the interest expense on such Indebtedness shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate determined in good faith by a responsible financial or accounting officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. (f) Notwithstanding anything to the contrary herein: (i) in connection with a Specified Transaction undertaken in connection with the consummation of a Limited Condition Transaction, to the extent that the terms of this Agreement require (A) compliance with any financial ratio or test (including any Consolidated Total Leverage Ratio test, Consolidated Net Cash Interest Coverage Ratio test, any Consolidated First Lien Leverage Ratio test or any Fixed Charge Coverage Ratio test, or any specific amount of Consolidated EBITDA), (B) the absence of a Default or Event of Default (or any type of Default or Event of Default) as a condition to the consummation of the Limited Condition Transaction (including any incurrence of Indebtedness ~~for all purposes~~ in connection therewith) and/or (C) the making of any representation or warranty as if a condition to such Limited Condition Transaction (including any incurrence of Indebtedness in connection therewith), the ~~full amount~~ determination of ~~any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided~~whether the relevant condition is satisfied may be made, ~~however, that~~ at the election of the Borrower, at the time of (or on the basis of the financial statements for the Relevant Reference Period at the time of) either (x) the execution of the definitive agreement or irrevocable declaration or notice thereof with respect to such Limited Condition Transaction; provided, however, that in respect of any Restricted Payment in the form of a dividend or other distribution to any Parent Company, such measurement shall be not more than 90 days prior to the making of such dividend or other distribution or (y) the consummation of the Limited Condition Transaction and related incurrence of Indebtedness, in each case, after giving effect to the relevant Limited Condition Transaction and related Specified Transaction, on a pro forma ~~calculation will not give effect to any Indebtedness incurred on such determination date pursuant~~ basis; provided that notwithstanding the foregoing, the absence of an Event of Default under Section 7.01(a) and (f) shall be a condition to the ~~provisions described~~ consummation of any such Incurrence of Indebtedness other than under this Agreement (the conditions for this Agreement being set forth in Section ~~7.02(c~~3.02). In addition, if the establishment of an Revolving Commitment Increase will be used to finance an Acquisition that constitutes a Limited Condition Transaction, then at the option of the Borrower and subject to the agreement of the lenders providing such financing, the establishment thereof (but not any extension of credit thereunder) may be subject to customary “SunGard” or “certain funds” conditionality in lieu of the requirements set forth in clauses (a) and (b) of Section 3.02. (ii) in connection with any transaction permitted hereunder that requires satisfaction of the Payment Conditions, the Borrower will be required to comply as of the date of such transaction with the Excess Availability requirements (but not, for the avoidance of doubt, clause (b)(2)(B) of the definition of “Payment Conditions” or any requirements relating to the Fixed Charge Coverage, which are governed by Section 1.09(f)(i) above) set forth in the definition of “Payment Conditions”. (g) On and after the date pro forma effect is to be given to a Limited Condition Transaction and the other Specified Transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof), which Limited Condition Transaction has yet to be consummated but for which a definitive agreement governing such Limited Condition Transaction has been executed and remains in effect (or, in the case of a Limited Condition Transaction that requires notice, such irrevocable notice has been provided), any ratio based conditions and baskets (including baskets that are determined on the basis of Consolidated EBITDA) shall be required to be satisfied assuming that such Limited Condition Transaction has been consummated and the related Specified Transactions have occurred until such Limited Condition Transaction is consummated or such definitive agreement is terminated.

Appears in 2 contracts

Sources: Abl Credit Agreement (Mattress Firm Group Inc.), Abl Credit Agreement (Mattress Firm Group Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary ~~herein~~in this Agreement, financial ratios and tests, including the ~~Secured Net~~ First Lien Leverage Ratio, the Total Leverage Ratio and the ~~Total Net Leverage~~ Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.10; ~~provided~~ provided, that notwithstanding anything to the contrary in clauses (2b), (3c), (4d) or (5e) of this Section ~~1.07~~1.10, when calculating the ~~Secured Net~~ First Lien Leverage Ratio or Total Leverage Ratio for purposes of (ai) the definition of “Applicable Rate,” (bii) Section ~~2.05(2)(a~~2.05(b)(i) and (ciii) ~~the Financial Covenant~~ Section 7.11 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 7.11), the events described in this Section ~~1.07~~ 1.10 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated ~~level~~ level). For the avoidance of doubt, the provisions of the foregoing sentence shall not apply for purposes of calculating the First Lien Leverage Ratio or the Total Leverage Ratio, each as applicable, for purposes of (i) the definition of “Applicable Rate”, (ii) Section 2.05(b)(i) and (yiii) Section 7.11 (other than for the purpose of determining ~~actual compliance (and not~~ pro forma ~~compliance)~~ compliance with ~~the Financial Covenant~~Section 7.11), ~~the reference to “Test Period” shall be deemed to be a reference to, and~~ each of which shall be based ~~on,~~ on the ~~most recently ended Test Period for which~~ financial statements ~~have been or are required to be~~ delivered pursuant to Section ~~6.01(1~~6.01(a) or (2b), as applicable, for the relevant Test Period. (b) For purposes of calculating any financial ratio or test (or Consolidated Total Assets), Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.10) that have been made (i) during the applicable Test Period or (ii) if applicable as described in clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Consolidated Total Assets, on the last day of the Applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.10, then such financial ratio or test (or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.10. (c) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies resulting from or relating to any Specified Transaction (including the Transaction) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twelve (12) months after the date of such Specified Transaction, (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (D) the aggregate amount of cost savings, synergies and operating expense reductions added pursuant to this clause (c) for any such period after the Closing Date, shall be limited to the extent provided in Section 1.10(f). (~~2) [Reserved]. (3) [Reserved]. (4~~d) In the event that (ax) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility ~~or line of credit~~ unless such Indebtedness has been permanently repaid and not replaced), ) or (by) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified ~~Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments~~Equity Interests, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase~~ or such issuance or redemption of Disqualified ~~Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments~~Equity Interests, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness ~~for all purposes~~ or such issuance, repurchase or redemption of Disqualified Equity Interests will be given effect as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full~~ date of the event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or Restricted Subsidiary may designate. (f) Notwithstanding anything to the contrary in this Agreement, for purposes of calculating the First Lien Leverage Ratio, the Total Leverage Ratio and the Fixed Charge Coverage Ratio, the aggregate amount of ~~any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided~~adjustments to Consolidated EBITDA and Consolidated Net Income consisting of addbacks, ~~however~~pro forma adjustments and exclusions for cost savings, ~~that at the election~~ synergies and operating expense reductions and restructuring and similar charges pursuant to clause (a)(xiv) of the ~~Borrower~~definition of Consolidated EBITDA and clause (c) of this Section 1.10, ~~the~~ when taken together, shall not exceed 15% of Consolidated EBITDA for such Test Period (giving pro forma ~~calculation will not give~~ effect to the relevant Specified Transaction to the extent required or permitted pursuant to Section 1.10 (other than any cost savings, synergies and operating expense reductions pursuant to Section 1.10(c)) determined prior to giving effect to any ~~Indebtedness incurred on such determination date~~ adjustments pursuant to clause (xiv) of the ~~provisions described in~~ definition of Consolidated EBITDA and clause (c) of this Section ~~7.02(c)~~1.10.

Appears in 2 contracts

Sources: Second Lien Credit Agreement (TransFirst Inc.), First Lien Credit Agreement (TransFirst Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio and the Total Net Leverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a~~) the definition of “Applicable Rate,” (b~~)) Section 2.05(2)(a) and (cb) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; ~~provided however~~ provided, however, that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal ~~year-end~~ year‑end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any~~. In addition, whenever a~~ . (2) For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of Consolidated EBITDA or any such ratio is to made shall be calculated on a pro forma ~~basis~~basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the ~~reference to “~~case of Total Assets, on the last day of the applicable Test Period~~” for purposes~~ ). If since the beginning of ~~calculating~~ any applicable Test Period any Person that subsequently became a Restricted Subsidiary or Affiliated Practice or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary or any Affiliated Practice since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be ~~deemed~~ calculated to give pro forma effect thereto in accordance with this Section 1.07; provided that with respect to any pro forma calculations to be ~~a reference to, and shall be based on,~~ made in connection with any acquisition or investment in respect of which financial statements for the ~~most recently ended~~ relevant target are not available for the same Test Period for which internal financial statements of the Borrower are available, the Borrower shall determine such pro forma calculations on the basis of the available financial statements (even if for differing periods) or such other basis as determined ~~in good faith~~ on a commercially reasonable basis by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) [Reserved]. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run‑rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from, or relating to, any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions and investments occurring prior to the Effective Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized in full on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized in full during the entirety of such period and “run‑rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Effective Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) no later than eighteen (18) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction), (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (d) any “run rate” cost savings, operating expense reductions and synergies added back to Consolidated EBITDA pursuant to this Section 1.07(3), when aggregated with amounts added back to Consolidated EBITDA pursuant to clauses (1)(l), (1)(s) and (1)(t) of the definition thereof, together with amounts excluded pursuant to clause (1)(b) of Consolidated Net Income, in any Test Period, in each case, other than amounts added back in connection with the Transactions, shall not in the aggregate exceed an amount equal to 35.0% of Consolidated EBITDA of the Borrower (calculated after giving effect to any such addback and all other permitted add-backs and adjustments) for such Test Period on a pro forma basis. (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or ~~test~~test (and, in each case of the foregoing clauses (a) and (d), any Lien incurred in connection therewith), (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c).

Appears in 2 contracts

Sources: Credit Agreement (LifeStance Health Group, Inc.), Credit Agreement (LifeStance Health Group, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Secured Net~~ Total Leverage Ratio, the Fixed Charge Coverage Ratio and the ~~Total Net Leverage~~ Fixed Charge Coverage Ratio (All Cash Dividends) shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2b), (3c), (4d) or (5f) of this Section 1.07, when calculating the ~~Secured Net~~ (x) Total Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section ~~2.05(2)(a~~2.03.4(a) and (c) the ~~Financial Covenant~~ financial covenants in Section 6.15 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 6.15), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section ~~2.05(1)~~ 2.03.5 during any ~~fiscal year~~ Fiscal Quarter (without duplication of any prepayments in such ~~fiscal year~~ Fiscal Quarter that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section ~~2.05(2)(a)~~ 2.03.4 for any prior ~~fiscal year~~Fiscal Quarter) shall be given pro forma effect after such ~~fiscal year~~Fiscal Quarter-end and prior to the time any mandatory prepayment pursuant to Section ~~2.05(2)(a)~~ 2.03.4 is due for purposes of calculating the ~~Secured Net~~ Total Leverage Ratio for purposes of determining the ~~ECF Percentage~~ recapture percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, (i) the most recently ended Test Period for which internal financial statements of GPB Prime and its Subsidiaries are available or (ii) if a full Test Period has not been completed following the ~~Borrower~~ Closing Date, the most recently ended Test Period for which internal financial statements of Parent Holdings Guarantor and its Subsidiaries are available (in each case, as determined in good faith by the ~~Borrower~~Borrower Representative) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with ~~the Financial Covenant~~Section 6.15, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section ~~6.01(1)~~ 5.08.1 or ~~(2)~~5.08.2). (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA), Specified Transactions (and, subject to clause (c) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) other than as described in the first proviso to clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA, is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into GPB Prime or any of its Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (~~3) [Reserved]. (4~~c) In the event that (a) ~~the Borrower~~ GPB Prime or any ~~Subsidiary~~ of its Subsidiaries incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, prepayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Vehicle Financing Indebtedness or any Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) ~~the Borrower~~ GPB Prime or any ~~Subsidiary~~ of its Subsidiaries issues, repurchases or redeems Disqualified ~~Stock,~~ Stock or (c) any Subsidiary issues, repurchases or redeems Preferred ~~Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test~~Stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, ~~or establishment or elimination of any Designated Revolving Commitments,~~ in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of ~~Indebtedness for all purposes~~ the Fixed Charge Coverage Ratio or the Fixed Charge Coverage Ratio (All Cash Dividends) (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period). (d) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full amount~~ date of the event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen in accordance with this Agreement. (e) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any ~~undrawn Designated Revolving Commitments had~~ Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been ~~incurred thereunder throughout~~ entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such ~~period; provided~~Person, ~~however~~business, ~~that at the election of the Borrower~~assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (f) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma ~~calculation will not give effect~~ calculations shall be made in good faith by a Responsible Officer of the Borrower Representative and may include the amount of “run rate” cost savings, operating expense reductions and synergies projected by the Borrower Representative in good faith to result from or relating to any ~~Indebtedness incurred on such determination date pursuant~~ Specified Transaction (including the Original Closing Date Transactions and, for the avoidance of doubt, acquisitions occurring prior to the ~~provisions described~~ Original Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in ~~Section 7.02(c~~the good faith determination of the Borrower Representative) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts of cost savings, operating expense reductions and synergies shall be reasonably acceptable to the Administrative Agent, (b) such amounts of cost savings, operating expense reductions and synergies shall be reasonably identifiable and factually supportable in the good faith judgment of the Borrower Representative and (c) such actions shall be taken no later than twelve (12) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction).

Appears in 1 contract

Sources: Credit Agreement (GPB Automotive Portfolio, LP)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided ~~that notwithstanding~~ that, not-withstanding anything to the contrary in clauses (2b), (3c), (4d) or (5e) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (ai) the definition of “Applicable Rate,” (bii) Section ~~2.05(2)(a~~2.05(b)(i) and (ciii) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section ~~2.05(1~~2.05(a) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section ~~2.05(2)(a~~2.05(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time ~~any mandatory~~ such prepayment pursuant to Section ~~2.05(2)(a~~2.05(b)(i) is due ~~for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any~~but shall not be given pro forma effect thereafter. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of ~~the Borrower~~ Holdings are available (as determined in good faith by the ~~Borrower~~Borrower Representative) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)level). (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.07) that have been made (i) during the applicable Test Period or (ii) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into Holdings, a Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3c) ~~[Reserved]~~For the purposes of calculating any financial ratio or test (or Total Assets) in connection with any Permitted Acquisition, Holdings may, at its option, make such calculation either at the time (i) of incurrence of any Indebtedness or Liens or the making of any Investments, Restricted Payments or Fundamental Changes, or the designation of any Unrestricted Subsidiaries in connection with such Permitted Acquisition or (ii) a definitive agreement is entered into with respect to such Permitted Acquisition on a pro forma basis assuming that such Permitted Acquisition had occurred; provided that if Holdings has made such an election pursuant to this clause (c)(ii), all calculations prior to the consummation or termination of a such definitive agreement related to such Permitted Acquisition (including the incurrence of any Indebtedness and Liens, the making of any such Investments, Restricted Payments and Fundamental Changes, and the designation of any Unrestricted Subsidiaries) must also be made on such a pro forma basis. (4d) Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower Representative and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower Representative in good faith to result from or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower Representative) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower Representative, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of such Specified Transaction and (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (e) In the event that ~~(a) the~~ Holdings, a Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c).or

Appears in 1 contract

Sources: Syndicated Facility Agreement (DTZ Jersey Holdings LTD)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, Consolidated EBITDA and any financial ratios ~~and~~ or tests, including the Total Net Leverage Ratio, the Secured Net Leverage Ratio and the ~~Total~~ First Lien Net Leverage ~~Ratio~~ Ratio, shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating (i) the ~~Secured~~ First Lien Net Leverage Ratio for purposes of Section 2.05(2)(a), (aii) the First Lien Net Leverage Ratio for purposes of the definition of “Applicable Rate,” or (~~b) Section 2.05(2)(a) and (c~~iii) the ~~Financial Covenant (other than~~ Total Net Leverage Ratio for ~~the purpose~~ purposes of determining actual compliance (and not pro forma compliance, compliance on a Pro Forma Basis or determining compliance giving Pro Forma Effect to a transaction) with ~~the Financial Covenant)~~Section 7.12, the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; ~~provided however~~ provided, however, that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any~~. In addition~~. (2) For purposes of calculating Consolidated EBITDA, ~~whenever a~~ Total Assets and any financial ratios or tests, including the Total Net Leverage Ratio, the Secured Net Leverage Ratio and the First Lien Net Leverage Ratio, Specified Transactions (and the incurrence or repayment of any Indebtedness in connection therewith, subject to clause (4) of this Section 1.07) that have been made (i) during the applicable Test Period or (ii) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of Consolidated EBITDA or any such ratio ~~or test~~ is to made shall be calculated on a pro forma ~~basis~~basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the ~~reference to “~~case of Total Assets, on the last day of the applicable Test Period~~” for purposes~~ ). If since the beginning of ~~calculating~~ any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of its Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be ~~deemed~~ calculated to give pro forma effect thereto in accordance with this Section 1.07; provided that with respect to any pro forma calculations to be ~~a reference to, and shall be based on, the most recently ended Test Period for~~ made in connection with any acquisition or investment in respect of which ~~internal~~ financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the ~~first Test Period cited in~~ relevant target are not available for the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended same Test Period for which financial statements of the Borrower have been ~~or are required to be delivered pursuant to Section 6.01(1~~delivered, the Borrower shall determine such pro forma calculations on the basis of the available financial statements (even if for differing periods) or ~~(2)). (2) [Reserved]~~such other basis as determined on a commercially reasonable basis by the Borrower. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Responsible Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions which have been taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period) relating to such Specified Transaction, and “run rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), net of the amount of actual benefits realized during such period from such actions; provided that (A) such amounts are reasonably identifiable and factually supportable (in the good faith reasonable determination of the Borrower), (B) such actions have been taken or substantial steps with respect to such actions have been taken or are expected to be taken (in the good faith reasonable determination of the Borrower) no later than eighteen (18) months after the date of such Specified Transaction and such costs savings, operating expense reductions and synergies are reasonably anticipated to be realizable within such eighteen (18) month period, (C) no amounts shall be added pursuant to this clause (3) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period and (y) it is understood and agreed that, subject to compliance with the other provisions of this Section 1.07(3), amounts to be included in pro forma calculations pursuant to this Section 1.07(3) may be included in Test Periods in which the Specified Transaction to which such amounts relate to is no longer being given pro forma effect pursuant to Section 1.07(2) and (C) the amount of expenses and synergies added back pursuant to this Section 1.07(3) (in the case of Section 1.07(3), in connection with a Specified Transaction consummated after the Closing Date), when aggregated with the amounts excluded from Consolidated Net Income pursuant to clause (a) thereof and amounts added back to Consolidated EBITDA pursuant to clauses (a)(v), (a)(x), (a)(xi), (a)(xvii) and (a)(xviii) thereof, in each case, solely to the extent such items are not prepared in compliance with Regulation S-X, shall not exceed an aggregate amount equal to 25% of Consolidated EBITDA for such Test Period determined on a Pro Forma Basis (calculated before giving effect to such amounts). In addition, whenever pro forma effect is to be given to a Specified Transaction, the Borrower may elect to not make pro forma adjustments to Consolidated EBITDA if the amount of such adjustment does not exceed $2.5 million. (4) In the event that (a) the Borrower or any Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not ~~replaced)~~replaced and, for the avoidance of doubt, in the event an item of Indebtedness or Disqualified Stock (or any portion thereof) is incurred or issued, any Lien is incurred or other transaction is undertaken in reliance on a ratio Basket based on the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, or the Total Net Leverage Ratio, such ratio(s) shall be calculated without regard to the incurrence of any Indebtedness under any revolving facility in connection therewith) or (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, ~~(c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments,~~ in each case included in the calculations of any financial ratio or ~~test~~test (and, in the case of the foregoing clause (a), any Lien incurred in connection therewith), (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified ~~Stock or Preferred~~ Stock~~, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required~~, as if the same had occurred on the last day of the applicable Test ~~Period and~~Period. (5) Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Subsidiary may designate. (6) Notwithstanding anything to the contrary in ~~the case of Indebtedness for all purposes as if such Indebtedness~~ this Section 1.07 or in ~~the full amount~~ any classification under GAAP of any ~~undrawn Designated Revolving Commitments had~~ Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been ~~incurred thereunder throughout such period; provided~~entered into, ~~however, that~~ at the election of the Borrower, ~~the~~ no pro forma ~~calculation will~~ effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not ~~give effect~~ be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which financial statements of the Borrower have been delivered on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, in the event any Lien, Indebtedness (including any Incremental Loans, Incremental Commitments or Permitted Incremental Equivalent Debt), Investment or Disqualified Stock transaction meets the criteria of one or more than one of the categories of Baskets under this Agreement (including within any defined terms), including any Fixed Basket or Non-Fixed Basket, as applicable, the Borrower shall be permitted, in its sole discretion, to divide and classify and to later, at any time and from time to time, re-divide and re-classify (including to re-classify utilization of any Fixed Basket as being incurred under any Non-Fixed Basket or other Fixed Basket or utilization of any Non-Fixed Basket as being incurred under any Fixed Basket or other Non-Fixed Basket) on one or more occasions (based on circumstances existing on the date of any such re-division and re-classification) any such Lien, Indebtedness, Investment or Disqualified Stock transaction, in whole or in part, among one or more than one applicable Baskets under this Agreement (in the case of re-classification or re-division, so long as the amount so re-classified or re-divided is permitted at the time of such re-classification or re-division to be incurred pursuant to the applicable Basket into which such amount is re-classified or re-divided at such time (and not the Basket from which such amount is re-divided or re-classified)). For the avoidance of doubt, the amount of any Lien, Indebtedness, Investment or Disqualified Stock transaction that shall be allocated to each such Basket shall be determined by the Borrower at the time of such division, classification, re-division or re-classification, as applicable. Notwithstanding anything herein to the contrary, (x) any Indebtedness incurred under this Agreement (including on ~~such determination date pursuant~~ the Closing Date) will, at all times, be classified as being incurred under Section 7.02(b)(1) (including on the Closing Date) and may not be re-classified and (y) the only Indebtedness incurred by the Loan Parties and their Subsidiaries that is permitted to ~~the provisions described in Section 7.02(c).~~be

Appears in 1 contract

Sources: Credit Agreement (LifeStance Health Group, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests or other calculations of financial terms, including the Consolidated Total Net Leverage Ratio, the Consolidated Secured Net Leverage Ratio, the Consolidated First Lien Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; provided that notwithstanding anything to the contrary in ~~clauses (2~~Section 1.08(b), (~~3), (4~~c) or (~~5) of this Section 1.07~~d), when (x) calculating the Consolidated Secured Net Leverage Ratio for purposes of ~~(a)~~ the definition of “Applicable ~~Rate,~~ECF Percentage” ~~(b) Section 2.05(2)(a)~~ and (cy) calculating the ~~Financial Covenant (other than~~ Consolidated Secured Net Leverage Ratio or the Consolidated First Lien Net Leverage Ratio for ~~the purpose~~ purposes of determining ~~pro forma~~ actual compliance (and not Pro Forma Compliance or compliance on a Pro Forma Basis) with Section 7.11, the ~~Financial Covenant)~~Applicable Rate and the Commitment Fee Rate, the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section ~~2.05(1~~2.05(a) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section ~~2.05(2)(a~~2.05(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section ~~2.05(2)(a~~2.05(b)(i) is due for purposes of calculating the Consolidated Secured Net Leverage Ratio for purposes of determining the Applicable ECF Percentage for such mandatory prepayment, if any. In addition, (x) whenever a financial ratio or test or other financial definition is to be calculated on a pro forma basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test or financial definition shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower Agent are available (as determined in reasonable good faith by the ~~Borrower~~Borrower Agent) and which have been delivered to the Administrative Agent (it being understood that for purposes of ~~(x)~~ determining ~~pro forma compliance~~ Pro Forma Compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated ~~level~~ level) and (y) in connection with any Limited Condition Transaction, for purposes of determining ~~actual~~ compliance with (1) any provision of this Agreement which requires compliance with any representations and ~~not pro forma compliance~~warranties set forth herein, (2) any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom or (3) any test or covenant contained in this Agreement during any period which requires the calculation of any applicable ratios that are measured as a percentage of Consolidated EBITDA, and, at the option of the Borrower Agent (the Borrower’sBorrower Agent’s election to exercise such option in connection with any Limited Condition Transaction, an “LCA Election”) the ~~Financial Covenant, the reference to “Test Period”~~ date of determination for any such compliance or calculation of any such ratios shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCA Test Date”) and if, after giving Pro Forma Effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent applicable date of determination ending prior to the LCA Test Date, the Borrower Agent could have taken such action on the relevant LCA Test Date in compliance with such ratio, such ratio shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower Agent has made an LCA Election and any of the ratios for which compliance was determined or tested as of the LCA Test Date are not complied with as a ~~reference to~~result of fluctuations in any such ratio, including due to fluctuations in Consolidated EBITDA of the Borrower Agent or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been violated or failed to be satisfied as a result of such fluctuations and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction unless the Borrower Agent elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction is consummated. If the Borrower Agent has made an LCA Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with Section 7.11) on or following the relevant LCA Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date the Borrower Agent makes an election pursuant to the immediately preceding sentence or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof and the designation of any Subsidiary as an Unrestricted Subsidiary) have been consummated and if with respect to any determination or testing of any ratio with respect to any Restricted Payment, and ~~shall be based on,~~ also on a standalone basis without assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of debt and the ~~most recently ended Test Period for which financial statements~~ use of proceeds thereof) have been ~~or are required to be delivered pursuant to Section 6.01(1) or (2))~~consummated. (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test or other financial definition, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to Section 1.08(d)) that have been made (i) during the applicable Test Period and (ii) if applicable as described in Section 1.08(a), subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio, test or definition is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day (or, in the case of the determination of Total Assets, the last day) of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower Agent or any other Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or other financial definition, including Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower Agent and include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower Agent in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, operating initiatives, operating changes and synergies were realized during the entirety of such period) and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests or other financial definitions and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower Agent, (B) such actions are taken, committed to be taken or expected to be taken no later than 24 months after the date of such Specified Transaction, and (C) no amounts shall be added pursuant to this Section 1.08(c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period. (4d) In the event that ~~(a)~~ the Borrower Agent or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness included in the calculations of any financial ratio, test or other financial definition (in each case, other than Indebtedness incurred or repaid under any revolving credit ~~facility or line of credit unless such Indebtedness has been permanently repaid and not replaced~~facility), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subject to Section 1.08(a) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ~~ratio~~ ratio, test or definition is made, then such financial ~~ratio~~ ratio. test or ~~test~~ definition shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case~~ to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement, or extinguishment of Indebtedness ~~for all purposes~~ will be given effect as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full~~ date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on Capitalized Leases shall be deemed to accrue at an interest rate determined in reasonable good faith by a Responsible Officer of the Borrower Agent to be the rate of interest implicit in such Capitalized Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate or other rate, shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower Agent or Restricted Subsidiary may designate. (f) For purposes of calculating any financial ratio or test or other financial definition on a pro forma basis as of the last day of the most recently ended Test Period, the amount of any ~~undrawn Designated Revolving Commitments had been~~ Indebtedness shall be determined after giving effect to the full utilization of any commitments provided under such Indebtedness then being incurred ~~thereunder throughout such period; provided~~(or in the case of any delayed draw term loan commitments, ~~however, that~~ at the ~~election of the Borrower~~Borrower’sBorrower Agent’s election, ~~the pro forma calculation will not give~~ determined after giving effect to the borrowing of any ~~Indebtedness incurred on~~ delayed draw term loans with respect to such ~~determination date pursuant to~~ delayed draw term loan commitments) and, for leverage-based ratios, shall be calculated without netting any cash proceeds resulting from the ~~provisions described in Section 7.02(c)~~incurrence of such Indebtedness.

Appears in 1 contract

Sources: Credit Agreement (Playa Hotels & Resorts N.V.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Consolidated First Lien Net Leverage Ratio, Consolidated First ▇▇▇▇ ▇▇▇▇▇ Leverage Ratio, the Consolidated Senior Secured Net Leverage ~~Ratio and~~ Ratio, the Total Net Leverage Ratio, and Interest Coverage Ratio and compliance with covenants determined by reference to Consolidated EBITDA or Total Assets shall be calculated in the manner prescribed by this Section ~~1.07~~1.11; ~~provided~~ provided, that notwithstanding anything to the contrary in clauses (2b), (~~3),~~ c) (4d) or (5e) of this Section ~~1.07~~1.11, when calculating the ~~Secured~~ Consolidated First Lien Net Leverage Ratio or Consolidated First ▇▇▇▇ ▇▇▇▇▇ Leverage Ratio for purposes of ~~(a)~~ the definition of “Applicable Rate~~,” (b)~~ ”, for purposes of Section ~~2.05(2)(a~~2.06(b)(i) and ~~(c) the Financial Covenant~~ Section 7.11 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 7.11), the events described in this Section ~~1.07~~ 1.11 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with ~~the Financial Covenant~~Section 7.11, if (i) no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated level and (yii) all Test Periods with an applicable level cited in Section 7.11 have passed, the applicable level shall be the level for the last Test Period cited in Section 7.11 with an indicated level). For purposes of determining ~~actual compliance (and not~~ pro forma ~~compliance)~~ compliance with the Financial ~~Covenant~~Covenant at a time when a Compliance Event has not occurred or is continuing, ~~the reference to “Test Period”~~ such determination shall be ~~deemed to be a reference to, and shall be based on,~~ made as though the ~~most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2))~~Financial Covenant is in effect at the relevant time. (2) [Reserved]. (3) [Reserved]. (4) In the event that (a) the Borrower or any Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations For purposes of calculating any financial ratio or ~~test~~test or compliance with any covenant determined by reference to Consolidated EBITDA or Total Assets, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.11) that have been made (i) during the applicable Test Period or (ii) if applicable as described in clause (a) above, subsequent to ~~the end of the applicable~~ such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is ~~made, then such financial ratio or test~~ made shall be calculated ~~giving~~ on a pro forma ~~effect~~ basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction, but excluding, for purposes of calculating Total Assets, any decrease in cash and Cash Equivalents as a result of any such ~~incurrence, issuance,~~ Specified Transactions constituting a Restricted Payment or repayment ~~or redemption~~ of Indebtedness~~, issuance, repurchase or redemption~~ ) had occurred on the first day of ~~Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments~~the applicable Test Period (or, in ~~each~~ the case ~~to the extent required~~of Total Assets, ~~as if the same had occurred~~ on the last day of the applicable Test Period). If since the beginning of any applicable Test Period ~~and~~any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of the Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.11, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.11. (c) Whenever pro forma effect is to be given to a Specified Transaction, the ~~case~~ pro forma calculations shall be made in good faith by a responsible financial or accounting officer of ~~Indebtedness~~ the Borrower and may include, for ~~all purposes~~ the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such ~~Indebtedness~~ cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the ~~full amount~~ initial pro forma calculations of such financial ratios or tests (and in respect of any ~~undrawn Designated Revolving Commitments had been incurred thereunder throughout~~ subsequent pro forma calculations in which such ~~period~~Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period) relating to such Specified Transaction; ~~provided, however,~~ provided that at (A) such amounts are reasonably identifiable and factually supportable in the ~~election~~ good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected in good faith to be taken no later than eighteen (18) months after the date of such Specified Transaction, (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma ~~calculation will not give effect~~ adjustment or otherwise, with respect to such period and (D) any ~~Indebtedness incurred on such determination date~~ increase to Consolidated EBITDA as a result of cost savings, operating expense reductions and synergies pursuant to this Section 1.11(c) shall be subject to the ~~provisions described~~ limitation set forth in ~~Section 7.02(c)~~the further proviso of clause (viii) of the definition of “Consolidated EBITDA”.

Appears in 1 contract

Sources: Credit Agreement (Bright Horizons Family Solutions Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section ~~1.07,~~ 1.07 when calculating the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio or Total Net Leverage Ratio, as applicable, for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which ~~internal~~ financial statements of the Borrower ~~are available (~~have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as ~~determined in good faith by the Borrower)~~ applicable (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Permitted Acquisition, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Permitted Acquisition which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Permitted Acquisition; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twelve (12) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction), (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (d) the aggregate amount of cost savings, operating expense reductions and synergies included pursuant to this Section 1.07(3), taken together with the aggregate amount included pursuant to clause (l) of the definition of Consolidated EBITDA, shall not exceed 15% of Acquired EBITDA (prior to giving effect to clause (l) of the definition of Consolidated EBITDA or this Section 1.07(3)). (4) In the event that (a) the Borrower or any Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, or (c) any Subsidiary issues, repurchases or redeems Preferred Stock ~~or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test,~~ (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, or issuance, repurchase or redemption of Disqualified Stock or Preferred Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of ~~Indebtedness for all purposes~~ the Interest Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, or issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, in each case will be given effect, as if ~~such Indebtedness in~~ the ~~full amount~~ same had occurred on the first day of ~~any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period~~the applicable Test Period); provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which financial statements of the Borrower have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as applicable (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties (in the case of Specified Representations, subject to Section 2.14) or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election,” which LCT Election may be in respect of one or more of clauses (a), (b), (c) and (d) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which financial statements of the Borrower have been delivered to the Administrative Agent pursuant to Section 6.01(1) or Section 6.01(2), as applicable, the Borrower could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6) shall be continuing on the date such Limited Condition Transaction is consummated. For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions, unless, other than if an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6), shall be continuing on such date, the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction or related Specified Transactions is consummated. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction or the date the Borrower makes an election pursuant to clause (y) of the immediately succeeding sentence, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date; provided that for purposes of any such calculation of the Interest Coverage Ratio, Consolidated Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Transaction based on the indicative interest margin contained in any financing commitment documentation with respect to such Indebtedness or, if no such indicative interest margin exists, as reasonably determined by the Borrower in good faith. Notwithstanding anything in this Agreement or any Loan Document to the contrary, if the Borrower or the Subsidiaries (x) incurs Indebtedness, issues Disqualified Stock or Preferred Stock, creates Liens, makes Asset Sales, makes Investments, makes Restricted Payments, or repays any Indebtedness, Disqualified Stock or Preferred Stock in connection with any Limited Condition Transaction under a ratio-based Basket and (y) incurs Indebtedne

Appears in 1 contract

Sources: Credit Agreement (Superior Industries International Inc)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and Section 2.05(2)(b) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In ~~addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period”~~ addition for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in good faith by the Borrower) (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2))level. (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07; provided that with respect to any pro forma calculations to be made in connection with any acquisition or investment in respect of which financial statements for the relevant target are not available for the same Test Period for which internal financial statements of the Borrower are available, the Borrower shall determine such pro forma calculations on the basis of the available financial statements as reasonably determined in good faith by the Borrower. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions and investments occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements), whether prior to or following the Closing Date, net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than twenty-four (24) months after the date of such Specified Transaction (or such actions are undertaken or implemented prior to the consummation of such Specified Transaction), and (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (4) In the event that (a) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Restricted Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case will be given effect, as if the same had occurred on the first day of the applicable Test Period) and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section ~~7.02(c~~7.02(c)(4). (5) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the date of the event for which the calculation of the Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate shall be determined to have been based upon the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or the applicable Restricted Subsidiary may designate. (6) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, at the election of the Borrower, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (7) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which internal financial statements of Holdings are available (as determined in good faith by the Borrower) on or prior to the relevant date of determination. (8) Notwithstanding anything to the contrary herein, with respect to the incurrence of any amounts of Indebtedness (a) under any Revolving Facility or other revolving credit facility or (b) in reliance on a non-ratio-based Basket (including, without limitation, clauses (A) and (C) of the Available Incremental Amount) (including any grower components of any non-ratio-based Basket based on Consolidated EBITDA) (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred in reliance on a provision of this Agreement that requires compliance with a financial ratio or test (including, without limitation, the Financial Covenant, any First Lien Net Leverage Ratio test, any Secured Net Leverage Ratio test, any Total Net Leverage Ratio test and/or any Interest Coverage Ratio test) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be disregarded in the calculation of the financial ratio or test applicable to the Incurrence-Based Amounts. (a) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (i) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (ii) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (iii) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (iv) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties or the satisfaction of any other conditions shall, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election,” which LCT Election may be in respect of one or more of clauses (i), (ii), (iii) and (iv) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “LCT Test Date”). (b) If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which internal financial statements are available, the Borrower or a Restricted Subsidiary could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to the Borrower, Section 8.01(6) shall be continuing on the date such Limited Condition Transaction is consummated. (c) For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) subject to Section 1.07(9)(e) below, such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions. (d) If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction or the date the Borrower makes an election pursuant to the immediately preceding sentence, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date; provided that for purposes of any such calculation of the Interest Coverage Ratio, Ratio Interest Expense will be calculated using an assumed interest rate for the Indebtedness to be incurred in connection with such Limited Condition Transaction based on the indicativ

Appears in 1 contract

Sources: Credit Agreement (Ensemble Health Partners, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Senior Secured First Lien Net Leverage Ratio, the Senior Secured Net Leverage ~~Ratio and~~ Ratio, the Total Net Leverage Ratio, and the Fixed Charge Coverage Ratio and the determination of any basket or covenant based on Total Assets or Foreign Subsidiary Total Assets shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided~~ provided, that notwithstanding anything to the contrary in clauses (2b), (3c), (4d) or (5e) of this Section ~~1.07~~1.08, when calculating the Senior Secured Net Leverage Ratio and the Senior Secured First Lien Net Leverage Ratio, each as applicable, for purposes of (ai) the definition of “Applicable Rate,”, (ii) the definition of “Applicable ECF Percentage” and (biii) Section ~~2.05(2)(a) and (c) the Financial Covenant~~ 7.13 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 7.13), the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Parent Borrower are available (as determined in good faith by the Parent Borrower) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with ~~the Financial Covenant~~Section 7.13 (other than for purposes of Section 4.02(b)), if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.13 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.13 with an indicated ~~level~~ level). For the avoidance of doubt, the provisions of the foregoing sentence shall not apply for purposes of calculating the Senior Secured Net Leverage Ratio or the Senior Secured First Lien Net Leverage Ratio, each as applicable, for purposes of (i) the definition of “Applicable Rate”, (ii) the definition of “Applicable ECF Percentage” and (yiii) Section 7.13 (other than for the purpose of determining ~~actual compliance (and not~~ pro forma ~~compliance)~~ compliance with ~~the Financial Covenant~~Section 7.13), ~~the reference to “Test Period” shall be deemed to be a reference to, and~~ each of which shall be based ~~on,~~ on the ~~most recently ended Test Period for which~~ financial statements ~~have been or are required to be~~ delivered pursuant to Section ~~6.01(1~~6.01(a) or (2b)), as applicable, for the relevant Test Period. (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.08) that have been made (i) during the applicable Test Period or (ii) if applicable as described in clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Parent Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Parent Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies resulting from or relating to any Specified Transaction (including the Transaction) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Parent Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Parent Borrower) (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Parent Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than eighteen (18) months after the date of such Specified Transaction and (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (4d) In the event that (aw) the Parent Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility ~~or line of credit~~ unless such Indebtedness has been permanently repaid and not replaced), (bx) the Parent Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified ~~Stock~~Equity Interests , (cy) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (dz) other than for the purposes of determining compliance with Section 7.13 (including pro forma compliance with Section 7.13), the Parent Borrower or any Restricted Subsidiary establishes or eliminates (or designates or undesignates) any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase~~ or such issuance or redemption of Disqualified ~~Stock~~ Equity Interests or Preferred Stock~~, or establishment or elimination of any Designated Revolving Commitments~~, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Equity Interests or Preferred Stock will be given effect, as if the same had occurred on the first day of the applicable Test Period) and for all purposes, other than for the purposes ~~as if~~ of determining compliance with Section 7.13 (including pro forma compliance with Section 7.13), such ~~Indebtedness in~~ financial ratio or test shall be calculated giving pro forma effect to the full amount of any undrawn Designated Revolving Commitments as if such full amount of Indebtedness thereunder had been incurred thereunder throughout such period~~; provided~~. (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, ~~however, that at~~ the ~~election~~ interest on such Indebtedness shall be calculated as if the rate in effect on the date of the ~~Borrower~~event for which the calculation of the Fixed Charge Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Responsible Officer of the Parent Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the ~~pro forma calculation will not give effect to any Indebtedness incurred on~~ rate actually chosen, or if none, then based upon such ~~determination date pursuant to~~ optional rate chosen as the ~~provisions described in Section 7.02(c)~~Parent Borrower or Restricted Subsidiary may designate.

Appears in 1 contract

Sources: Credit Agreement (Aptalis Holdings Inc.)

Pro Forma and Other Calculations. (1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the First Lien Net Leverage Ratio, the Secured Net Leverage Ratio and the Total Net Leverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that notwithstanding anything to the contrary in clauses (2), (3), (4) or (5) of this Section 1.07, when calculating the ~~Secured~~ First Lien Net Leverage Ratio for purposes of (a) the definition of “Applicable Rate,” ”, (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant), the events described in this Section 1.07 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which ~~internal~~ financial statements of ~~the Borrower are available (as determined in good faith by the Borrower)~~ Holdings have been delivered pursuant to Section 6.01 (it being understood that for purposes of (x) determining pro forma compliance with the Financial Covenant, if no Test Period with an applicable level cited in the Financial Covenant has passed, the applicable level shall be the level for the first Test Period cited in the Financial Covenant with an indicated level and (y) determining actual compliance (and not pro forma compliance) with the Financial Covenant, the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2)). (2) ~~[Reserved]~~For purposes of calculating any financial ratio or test (or Consolidated EBITDA or Total Assets), Specified Transactions (and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection therewith) that have been made (a) during the applicable Test Period or (b) subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into any Borrower or any Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.07, then such financial ratio or test (or Consolidated EBITDA or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (3) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Lead Borrower and may include, for the avoidance of doubt, the amount of “run rate” cost savings, operating expense reductions and synergies projected by the Lead Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions and, for the avoidance of doubt, acquisitions occurring prior to the Closing Date) which is being given pro forma effect that have been realized or are expected to be realized and for which the actions necessary to realize such cost savings, operating expense reductions and synergies are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (in the good faith determination of the Lead Borrower) (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (a) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Lead Borrower, (b) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected to be taken no later than eighteen (18) months after the date of such Specified Transaction (or actions undertaken or implemented prior to the consummation of such Specified Transaction), (c) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through addback pro forma adjustment or otherwise, with respect to such period, and (d) the aggregate amount of adjustments pursuant to this clause (3) for any period, together with any amounts added back pursuant to clauses (l) and (s) of the definition of “Consolidated EBITDA” for such period, shall not exceed 20% of pro forma Consolidated EBITDA for the applicable period (before giving effect to such adjustments). (4) In the event that (a) ~~the~~ any Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit unless such Indebtedness has been permanently repaid and not replaced), (b) ~~the~~ any Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Restricted Subsidiary issues, repurchases or redeems Preferred Stock or (d) ~~the~~ any Borrower or any Restricted Subsidiary establishes ~~or eliminates~~ any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment ~~or elimination~~ of any Designated Revolving Commitments, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period and, in the case of Indebtedness for all purposes as if such Indebtedness in the full amount of any undrawn Designated Revolving Commitments had been incurred thereunder throughout such period; provided, however, that at the election of the Lead Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in Section 7.02(c). (5) Notwithstanding anything to the contrary in this Section 1.07 or in any classification under GAAP of any Person, business, assets or operations in respect of which a definitive agreement for the disposition thereof has been entered into, no pro forma effect shall be given to any discontinued operations (and the Consolidated EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such disposition shall have been consummated. (6) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended for which financial statements of Holdings have been delivered pursuant to Section 6.01 on or prior to the relevant date of determination. (7) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (a) calculating any applicable ratio, Consolidated Net Income or Consolidated EBITDA in connection with the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, (b) determining compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom, (c) determining compliance with any provision of this Agreement which requires compliance with any representations and warranties set forth herein or (d) determining the satisfaction of all other conditions precedent to the incurrence of Indebtedness, the issuance of Disqualified Stock or Preferred Stock, the creation of Liens, the making of any Asset Sale, the making of an Investment, the making of a Restricted Payment, the designation of a Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or the repayment of Indebtedness, Disqualified Stock or Preferred Stock, in each case in connection with a Limited Condition Transaction, the date of determination of such ratio or other provisions, determination of whether any Default or Event of Default has occurred, is continuing or would result therefrom, determination of compliance with any representations or warranties or the satisfaction of any other conditions shall, at the option of the Lead Borrower (the Lead Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”, which LCT Election may be in respect of one or more of clauses (a), (b), (c) and (d) above), be deemed to be the date the definitive agreements (or other relevant definitive documentation) for such Limited Condition Transaction are entered into (the “LCT Test Date”). If on a pro forma basis after giving effect to such Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof), with such ratios and other provisions calculated as if such Limited Condition Transaction or other transactions had occurred at the beginning of the most recent Test Period ending prior to the LCT Test Date for which financial statements have been delivered pursuant to Section 6.01, the Borrowers could have taken such action on the relevant LCT Test Date in compliance with the applicable ratios or other provisions, such provisions shall be deemed to have been complied with, unless an Event of Default pursuant to Section 8.01(1), or, solely with respect to Holdings or any Borrower, Section 8.01(6), shall be continuing on the date such Limited Condition Transaction is consummated. For the avoidance of doubt, (i) if, following the LCT Test Date, any of such ratios or other provisions are exceeded or breached as a result of fluctuations in such ratio (including due to fluctuations in Consolidated EBITDA or other components of such ratio) or other provisions at or prior to the consummation of the relevant Limited Condition Transactions, such ratios and other provisions will not be deemed to have been exceeded or failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Transaction is permitted hereunder and (ii) such ratios and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction or related Specified Transactions, unless on such date an Event of Default pursuant to Section 8.01(1) or, solely with respect to Holdings or any Borrower, 8.01(6), shall be continuing. If the Lead Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with the Financial Covenant) on or following the relevant LCT Test Date and prior to the earliest of the date on which such Limited Condition Transition is consummated, the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence or issuance of Indebtedness, Disqualified Stock or Preferred Stock, and the use of proceeds thereof) had been consummated on the LCT Test Date. Notwithstanding anything in this Agreement or any Loan Document to the contrary, if any Borrower or the Restricted Subsidiaries (x) incurs Indebtedness, issues Disqualified Stock or Preferred Stock, creates Liens, makes Asset Sales, makes Investments, makes Restricted Payments, designates any Subsidiary as a Restricted Subsidiary or an Unrestricted Subsidiary or repays any Indebtedness, Disqualified Stock or Preferred Stock in connection with any Limited Condition Transaction under a ratio based Basket and (y) incurs Indebtedness, issues Disqualified Stock or Preferred Stock, creates Liens, makes Asset Sales, Investments or Restricted Payments, designates any as a Restricted Subsidiary or an Unrestricted Subsidiary or repays any Indebtedness, Disqualified Stock or Preferred Stock in connection with such Limited Condition Transaction under a non-ratio based Basket (which shall occur within five Business Days of the events in clause (x) above), then the applicable ratio will be calculated with respect to any such action under the applicable ratio based Basket without regard to any such action under such non-ratio based Basket made in connection with such Limited Condition Transaction.

Appears in 1 contract

Sources: Credit Agreement (Chobani Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests or other calculations of financial terms, including the Consolidated Total Net Leverage Ratio, the Consolidated Secured Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; provided that notwithstanding anything to the contrary in ~~clauses (2~~Section 1.08(b), (~~3), (4~~c) or (~~5) of this Section 1.07~~d), when (x) calculating the Consolidated Total Net Leverage Ratio for purposes of the definition of “Applicable ECF Percentage” and (y) calculating the Consolidated Secured Net Leverage Ratio for purposes of determining actual compliance (aand not Pro Forma Compliance or compliance on a Pro Forma Basis) with Section 7.11 and the ~~definition of “Applicable~~ Commitment Fee Rate~~,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant)~~, the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section ~~2.05(1~~2.05(a) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section ~~2.05(2)(a~~2.05(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section ~~2.05(2)(a~~2.05(b)(i) is due for purposes of calculating the ~~Secured~~ Consolidated Total Net Leverage Ratio for purposes of determining the Applicable ECF Percentage for such mandatory prepayment, if any. In addition, (x) whenever a financial ratio or test or other financial definition is to be calculated on a pro forma basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test or financial definition shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in reasonable good faith by the Borrower) and which have been delivered to the Administrative Agent (it being understood that for purposes of ~~(x)~~ determining ~~pro forma compliance~~ Pro Forma Compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated ~~level~~ level) and (y) in connection with any Limited Condition Transaction, for purposes of determining ~~actual~~ compliance with (1) any provision of this Agreement which requires compliance with any representations and ~~not pro forma compliance~~warranties set forth herein, (2) any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom or (3) any test or covenant contained in this Agreement during any period which requires the calculation of any applicable ratios that are measured as a percentage of Consolidated EBITDA, and, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCA Election”) the ~~Financial Covenant, the reference to “Test Period”~~ date of determination for any such compliance or calculation of any such ratios shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCA Test Date”) and if, after giving Pro Forma Effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent applicable date of determination ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratio, such ratio shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCA Election and any of the ratios for which compliance was determined or tested as of the LCA Test Date are exceeded as a ~~reference to~~result of fluctuations in any such ratio, including due to fluctuations in Consolidated EBITDA of the Borrower or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded or failed to be satisfied as a result of such fluctuations and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction unless the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction is consummated. If the Borrower has made an LCA Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with Section 7.11) on or following the relevant LCA Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date the Borrower makes an election pursuant to the immediately preceding sentence or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and if with respect to any determination or testing of any ratio with respect to any Restricted Payment, and ~~shall be based on,~~ also on a standalone basis without assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of debt and the ~~most recently ended Test Period for which financial statements~~ use of proceeds thereof) have been ~~or are required to be delivered pursuant to Section 6.01(1) or (2))~~consummated. (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test or other financial definition, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to Section 1.08(d)) that have been made (i) during the applicable Test Period and (ii) if applicable as described in Section 1.08(a), subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio, test or definition is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day (or, in the case of the determination of Total Assets, the last day) of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any other Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or other financial definition, including Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, operating initiatives, operating changes and synergies were realized during the entirety of such period) and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests or other financial definitions and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or expected to be taken no later than 24 months after the date of such Specified Transaction, and (C) no amounts shall be added pursuant to this Section 1.08(c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period. (4d) In the event that ~~(a)~~ the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness included in the calculations of any financial ratio, test or other financial definition (in each case, other than Indebtedness incurred or repaid under any revolving credit ~~facility or line of credit unless such Indebtedness has been permanently repaid and not replaced~~facility), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subject to Section 1.08(a) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ~~ratio~~ ratio, test or definition is made, then such financial ~~ratio~~ ratio. test or ~~test~~ definition shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case~~ to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement, or extinguishment of Indebtedness ~~for all purposes~~ will be given effect as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full amount~~ date of ~~any undrawn Designated Revolving Commitments~~ the event for which the calculation of the Interest Coverage Ratio is made had been ~~incurred thereunder throughout~~ the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such ~~period; provided, however, that~~ Indebtedness). Interest on Capitalized Leases shall be deemed to accrue at ~~the election~~ an interest rate determined in reasonable good faith by a Responsible Officer of the ~~Borrower~~Borrower to be the rate of interest implicit in such Capitalized Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the ~~pro forma calculation will not give effect to any Indebtedness incurred on~~ rate actually chosen, or if none, then based upon such ~~determination date pursuant to~~ optional rate chosen as the ~~provisions described in Section 7.02(c)~~Borrower or Restricted Subsidiary may designate.

Appears in 1 contract

Sources: Credit Agreement (Playa Hotels & Resorts N.V.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Consolidated First Lien Net Leverage Ratio, the Consolidated Senior Secured Net Leverage Ratio, the Total Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.11; ~~provided~~ provided, that notwithstanding anything to the contrary in clauses (2b), (3c), (4d) or (5e) of this Section ~~1.07~~1.11, when calculating (i) the ~~Secured~~ Consolidated First Lien Net Leverage Ratio for purposes of ~~(a)~~ the definition of “Applicable Rate,” ~~(b) Section 2.05(2)(a)~~ and (cii) the ~~Financial Covenant~~ Total Net Leverage Ratio for purposes of Section 7.11 (other than for the purpose of determining pro forma compliance with ~~the Financial Covenant~~Section 7.11), the events described in this Section ~~1.07~~ 1.11 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.05(1) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(a) is due for purposes of calculating the Secured Net Leverage Ratio for purposes of determining the ECF Percentage for such mandatory prepayment, if any. In addition, whenever a financial ratio or test is to be calculated on a pro forma basis, the reference to “Test Period” for purposes of calculating such financial ratio or test shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which ~~internal~~ financial statements of the Borrower ~~are available~~ have been delivered to the Lenders pursuant to Section 6.01(a) or (~~as determined in good faith by the Borrower~~b) (it being understood that for purposes of ~~(x)~~ determining pro forma compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in Section 7.11 with an indicated level). For purposes of determining pro forma compliance with the Financial Covenant ~~with an indicated level~~ at a time when no Revolving Credit Exposure is outstanding and ~~(y) determining actual compliance (and not pro forma compliance) with~~ no Revolving Credit Commitment or Letter of Credit is in effect, such determination shall be made as though the Financial ~~Covenant,~~ Covenant is in effect at the reference to “Test Period” shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which financial statements have been or are required to be delivered pursuant to Section 6.01(1) or (2))relevant time. (b) For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.11) that have been made (i) during the applicable Test Period or (ii) if applicable as described in clause (a) above, subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made shall be calculated on a pro forma basis assuming that all such Specified NEWYORK 8648768 (2K) ~~[Reserved]~~Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day of the applicable Test Period (or, in the case of Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.11, then such financial ratio or test (or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.11. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions and synergies were realized during the entirety of such period and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests and during any subsequent Test Period in which the effects thereof are expected to be realized) relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or with respect to which substantial steps have been taken or are expected in good faith to be taken no later than eighteen (18) months after the date of such Specified Transaction, (C) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such period and (D) any increase to Consolidated EBITDA as a result of cost savings, operating expense reductions and synergies pursuant to this Section 1.11(c) shall be subject to the limitation set forth in the further proviso of clause (xii) of the definition of “Consolidated EBITDA”. (4d) In the event that (aw) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility ~~or line of credit~~ unless such Indebtedness (a) has been permanently repaid and not ~~replaced~~replaced or (b) the proceeds therefrom are used for other than working capital purposes or general corporate purposes in the ordinary course of business), (bx) the Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified ~~Stock,~~ Equity Interests or (cy) any Restricted Subsidiary issues, repurchases or redeems ~~Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test~~preferred stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ratio is made, then such financial ratio or test shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ NEWYORK 8648768 (2K) of Indebtedness, ~~issuance, repurchase~~ or such issuance or redemption of Disqualified ~~Stock~~ Equity Interests or ~~Preferred Stock, or establishment or elimination of any Designated Revolving Commitments~~preferred stock, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness ~~for all purposes~~ or such issuance, repurchase or redemption of Disqualified Equity Interests or preferred stock will be given effect, as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full amount~~ date of ~~any undrawn Designated Revolving Commitments~~ the event for which the calculation of the Interest Coverage Ratio is made had been ~~incurred thereunder throughout~~ the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such ~~period; provided, however, that~~ Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed to accrue at ~~the election~~ an interest rate reasonably determined by a Responsible Officer of the ~~Borrower~~Borrower to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the ~~pro forma calculation will not give effect to any Indebtedness incurred on~~ rate actually chosen, or if none, then based upon such ~~determination date pursuant to~~ optional rate chosen as the ~~provisions described in Section 7.02(c).~~Borrower or Restricted Subsidiary may designate. ARTICLE II

Appears in 1 contract

Sources: Credit Agreement (Bloomin' Brands, Inc.)

Pro Forma and Other Calculations. (1a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests or other calculations of financial terms, including the Consolidated Total Net Leverage Ratio, the Consolidated Secured Net Leverage Ratio and the ~~Total Net Leverage~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; provided that notwithstanding anything to the contrary in ~~clauses (2~~Section 1.08(b), (~~3), (4~~c) or (~~5) of this Section 1.07~~d), when (x) calculating the Consolidated Total Net Leverage Ratio for purposes of the definition of “Applicable ECF Percentage” and (y) calculating the Consolidated Secured Net Leverage Ratio for purposes of determining actual compliance (aand not Pro Forma Compliance or compliance on a Pro Forma Basis) with Section 7.11 and the ~~definition of “Applicable~~ Commitment Fee Rate~~,” (b) Section 2.05(2)(a) and (c) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant)~~, the events described in this Section ~~1.07~~ 1.08 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section ~~2.05(1~~2.05(a) during any fiscal year (without duplication of any prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.05(2)(a) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time any mandatory prepayment pursuant to Section 2.05(2)(aFlow (i) is due for purposes of calculating the ~~Secured~~ Consolidated Total Net Leverage Ratio for purposes of determining the Applicable ECF Percentage for such mandatory prepayment, if any. In addition, (x) whenever a financial ratio or test or other financial definition is to be calculated on a pro forma basis, the reference to the “Test Period” for purposes of calculating such financial ratio or test or financial definition shall be deemed to be a reference to, and shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available (as determined in reasonable good faith by the Borrower) and which have been delivered to the Administrative Agent (it being understood that for purposes of ~~(x)~~ determining ~~pro forma compliance~~ Pro Forma Compliance with ~~the Financial Covenant~~Section 7.11, if no Test Period with an applicable level cited in ~~the Financial Covenant~~ Section 7.11 has passed, the applicable level shall be the level for the first Test Period cited in ~~the Financial Covenant~~ Section 7.11 with an indicated ~~level~~ level) and (y) in connection with any Limited Condition Transaction, for purposes of determining ~~actual~~ compliance with (1) any provision of this Agreement which requires compliance with any representations and ~~not pro forma compliance~~warranties set forth herein, (2) any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom or (3) any test or covenant contained in this Agreement during any period which requires the calculation of any applicable ratios that are measured as a percentage of Consolidated EBITDA, and, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCA Election”) the ~~Financial Covenant, the reference to “Test Period”~~ date of determination for any such compliance or calculation of any such ratios shall be deemed to be the date the definitive agreements for such Limited Condition Transaction are entered into (the “LCA Test Date”) and if, after giving Pro Forma Effect to the Limited Condition Transaction and the other transactions to be entered into in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) as if they had occurred at the beginning of the most recent applicable date of determination ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratio, such ratio shall be deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCA Election and any of the ratios for which compliance was determined or tested as of the LCA Test Date are exceeded as a ~~reference to~~result of fluctuations in any such ratio, including due to fluctuations in Consolidated EBITDA of the Borrower or the Person subject to such Limited Condition Transaction, at or prior to the consummation of the relevant transaction or action, such ratios will not be deemed to have been exceeded or failed to be satisfied as a result of such fluctuations and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Transaction unless the Borrower elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Transaction is consummated. If the Borrower has made an LCA Election for any Limited Condition Transaction, then in connection with any subsequent calculation of any ratio, Basket availability or compliance with any other provision hereunder (other than actual compliance with Section 7.11) on or following the relevant LCA Test Date and prior to the earliest of the date on which such Limited Condition Transaction is consummated, the date the Borrower makes an election pursuant to the immediately preceding sentence or the date that the definitive agreement for such Limited Condition Transaction is terminated or expires without consummation of such Limited Condition Transaction, any such ratio, Basket or compliance with any other provision hereunder shall be calculated on a Pro Forma Basis assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof) have been consummated and if with respect to any determination or testing of any ratio with respect to any Restricted Payment, and ~~shall be based on,~~ also on a standalone basis without assuming such Limited Condition Transaction and other transactions in connection therewith (including any incurrence of debt and the ~~most recently ended Test Period for which financial statements~~ use of proceeds thereof) have been ~~or are required to be delivered pursuant to Section 6.01(1) or (2))~~consummated. (2b) ~~[Reserved]~~For purposes of calculating any financial ratio or test or other financial definition, Specified Transactions (with any incurrence or repayment of any Indebtedness in connection therewith to be subject to Section 1.08(d)) that have been made (i) during the applicable Test Period and (ii) if applicable as described in Section 1.08(a), subsequent to such Test Period and prior to or simultaneously with the event for which the calculation of any such ratio, test or definition is made shall be calculated on a pro forma basis assuming that all such Specified Transactions (and any increase or decrease in Consolidated EBITDA and the component financial definitions used therein attributable to any Specified Transaction) had occurred on the first day (or, in the case of the determination of Total Assets, the last day) of the applicable Test Period. If since the beginning of any applicable Test Period any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into the Borrower or any other Restricted Subsidiary since the beginning of such Test Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section 1.08, then such financial ratio or test (or other financial definition, including Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.08. (3c) ~~[Reserved]~~Whenever pro forma effect is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense reductions and synergies projected by the Borrower in good faith to be realized as a result of specified actions taken, committed to be taken or expected to be taken (calculated on a pro forma basis as though such cost savings, operating expense reductions and synergies had been realized on the first day of such period and as if such cost savings, operating expense reductions, operating initiatives, operating changes and synergies were realized during the entirety of such period) and “run-rate” means the full recurring benefit for a period that is associated with any action taken, committed to be taken or expected to be taken (including any savings expected to result from the elimination of a public target’s compliance costs with public company requirements) net of the amount of actual benefits realized during such period from such actions, and any such adjustments shall be included in the initial pro forma calculations of such financial ratios or tests or other financial definitions and during any subsequent Test Period in which the effects thereof are expected to be realized relating to such Specified Transaction; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the Borrower, (B) such actions are taken, committed to be taken or expected to be taken no later than 24 months after the date of such Specified Transaction, and (C) no amounts shall be added pursuant to this Section 1.08(c) to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA, whether through a pro forma adjustment or otherwise, with respect to such period. (4d) In the event that ~~(a)~~ the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by redemption, ~~repurchase,~~ repayment, ~~retirement, discharge, defeasance~~ retirement or extinguishment) any Indebtedness included in the calculations of any financial ratio, test or other financial definition (in each case, other than Indebtedness incurred or repaid under any revolving credit ~~facility or line of credit unless such Indebtedness has been permanently repaid and not replaced~~facility), (b) the Borrower or any Subsidiary issues, repurchases or redeems Disqualified Stock, (c) any Subsidiary issues, repurchases or redeems Preferred Stock or (d) the Borrower or any Subsidiary establishes or eliminates any Designated Revolving Commitments, in each case included in the calculations of any financial ratio or test, (i) during the applicable Test Period or (ii) subject to Section 1.08(a) subsequent to the end of the applicable Test Period and prior to or simultaneously with the event for which the calculation of any such ~~ratio~~ ratio, test or definition is made, then such financial ~~ratio~~ ratio. test or ~~test~~ definition shall be calculated giving pro forma effect to such ~~incurrence, issuance,~~ incurrence or repayment ~~or redemption~~ of Indebtedness, ~~issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, or establishment or elimination of any Designated Revolving Commitments, in each case~~ to the extent required, as if the same had occurred on the last day of the applicable Test Period ~~and,~~ (except in the case of the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, redemption, repayment, retirement, or extinguishment of Indebtedness ~~for all purposes~~ will be given effect as if the same had occurred on the first day of the applicable Test Period). (e) If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the ~~full amount~~ date of ~~any undrawn Designated Revolving Commitments~~ the event for which the calculation of the Interest Coverage Ratio is made had been ~~incurred thereunder throughout~~ the applicable rate for the entire period (taking into account any interest hedging arrangements applicable to such ~~period; provided, however, that~~ Indebtedness). Interest on Capitalized Leases shall be deemed to accrue at ~~the election~~ an interest rate determined in reasonable good faith by a Responsible Officer of the ~~Borrower~~Borrower to be the rate of interest implicit in such Capitalized Lease in accordance with GAAP. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a Eurocurrency interbank offered rate, or other rate, shall be determined to have been based upon the ~~pro forma calculation will not give effect to any Indebtedness incurred on~~ rate actually chosen, or if none, then based upon such ~~determination date pursuant to~~ optional rate chosen as the ~~provisions described in Section 7.02(c)~~Borrower or Restricted Subsidiary may designate.

Appears in 1 contract

Sources: Restatement Agreement (Playa Hotels & Resorts N.V.)

Common use of Pro Forma and Other Calculations Clause in Contracts