Common use of Budget Variance Clause in Contracts

Budget Variance. (a) As of the last day of each applicable Two-Week Test Period commencing with the last day of the first Two-Week Test Period ending after the Closing Date, for such Two-Week Test Period (i) the negative variance (as compared to the Cash Flow Forecast) of the actual aggregate operating cash receipts of the Debtors shall not exceed 15%, (ii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement)) made by the Debtors shall not exceed 15% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement)) shall not exceed 15%, and (b) beginning with the delivery of the third Budget Variance Report, as of the last day of each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after the Closing Date, for such Four-Week Test Period, (i) the negative variance (as compared to the applicable Cash Flow Forecast) of the actual aggregate operating cash receipts of the Debtors shall not exceed 10%, (ii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) made by the Debtors shall not exceed 10% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) shall not exceed 10% (such variance that does not breach this covenant, the “Permitted Variance”).

Budget Variance. (a) As of Beginning on the last day of each applicable Two-Week Test Period commencing with the last day Friday of the first Two-Week Test Period ending after full week following the Closing Date, and then no later than the Friday of each subsequent calendar week, the Issuer may deliver to the Purchasers a proposed budget for such Twothe following 13-Week Test week period, which shall be in form and substance reasonably satisfactory to the Purchasers (it being agreed that using a form similar to the Approved Budget shall be acceptable); provided, that if the week period covered by the Approved Budget then in effect (the “Current Budget Period”) shall have elapsed without the Issuer having delivered to the Purchasers a proposed budget for the 13-week period following the Current Budget Period in accordance with the terms of this Section 8.21 that is approved by each Purchaser in its sole discretion, an immediate Event of Default shall be deemed to have occurred and continuing until waived in writing by each of the Purchasers. The Issuer shall not permit (i) the negative variance (as compared to the Cash Flow Forecast) amount of its actual disbursements of the actual aggregate operating cash receipts type set forth in the “Program Cost of Goods Sold (COGs)”, “SG&A Expenses” and “Non-Operating Expenditures/Working Capital” line items set forth in an Approved Budget to exceed the Debtors shall not exceed 15budgeted amount of such disbursements shown in an Approved Budget by more than ten percent (10%) on a line item basis, (ii) the positive variance amount of all other actual disbursements to exceed the budgeted amount of such disbursements shown in an Approved Budget by more than twenty percent (as compared to the applicable Cash Flow Forecast20%) of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement)) made by the Debtors shall not exceed 15% on a line item basis and (iii) the positive variance amount of all of its actual disbursements (as compared to the applicable Cash Flow Forecast) including disbursements of the aggregate disbursements made by the Debtors type set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast “Program Cost of Goods Sold (includingCOGs)”, without limitation, any payments pursuant “SG&A Expenses” and “Non-Operating Expenditures/Working Capital” line items set forth in an Approved Budget) to exceed the Management Services Agreement)budgeted amount of such disbursements shown in an Approved Budget by more than ten percent (10%) shall not exceed 15%, and on a weekly aggregate basis (b) beginning with the delivery of the third Budget Variance Report, as of the last day of each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after the Closing Date, for such Four-Week Test Period, foregoing clause (i) the negative variance (as compared to the applicable Cash Flow Forecast) of the actual aggregate operating cash receipts of the Debtors shall not exceed 10%), (ii) and (iii), collectively, the positive “Budget Variance”). The Issuer shall also deliver with each proposed budget a variance (as report reflecting on a line item and an aggregate basis, the Issuer’s actual unrestricted cash receipts and cash disbursements compared to the applicable Cash Flow Forecast) Approved Budget for such immediately preceding week and for the period commencing on the Closing Date through and including the end of the aggregate operating disbursements (excluding professional feesweek immediately preceding the date of the variance report. For the avoidance of doubt, interest payments and disbursements made by for purposes of calculating the Debtors Budget Variance, any unused amounts set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast Approved Budget for any period of determination may be carried forward and used during subsequent periods. Each proposed budget shall be subject to review and approval by each Purchaser in its sole discretion before being deemed an Approved Budget. Upon approval of any proposed budget, the same shall constitute the Approved Budget, but until such proposed budget shall have been approved or rejected, the most recent Approved Budget (including, without limitation, any payments pursuant subject to the Management Services Agreementpermitted variances) made by the Debtors shall continue in full force and effect for purposes of determining Issuer’s compliance hereof. Each Purchaser agrees that it shall not exceed 10% and (iii) the positive variance (as compared unreasonably withhold or delay its consent to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) shall not exceed 10% (such variance that does not breach this covenant, the “Permitted Variance”)proposed budget.

Budget Variance. (a) As In addition to any and all other reporting requirements set forth in this Agreement, commencing in the week following entry of the last day Final Order, Loan Parties shall prepare and deliver to Agent, no later than Wednesday of each week, a report in form satisfactory to Agent (the “Variance Report”), comparing (1) Loan Parties’ actual results under the then applicable Two-Week Test Period commencing with Approved Budget for the last day immediately preceding week on a line item basis compared to the projections set forth in then applicable Approved Budget including, in each case, without limitation, an analysis of any budget variances. The Loan Parties’ actual collections (excluding actual collections of payments from the Department of Health and Human Services/Center for Medicare and Medicaid Services (“CMS”) that were previously subject to the administrative freeze imposed by CMS) shall not be less than 92.5% (the “Deposits Permitted Variance”) of the first Two-Week Test Period ending after aggregate amount of “Total Deposits” projected (excluding projected collections of payments from CMS that were previously subject to the Closing Date, for such Two-Week administrative freeze imposed by CMS) in the then applicable Approved Budget over the course of the applicable Test Period (i) as defined herein); and the negative variance Loan Parties’ actual operating disbursements shall not be greater than 107.5% (as compared to the Cash Flow Forecast“Disbursements Permitted Variance” and, collectively with the Deposits Permitted Variance, the “Permitted Variances”) of the actual aggregate operating cash receipts amount of “Total Operating Disbursements” projected in the then applicable Approved Budget over the course of the Debtors applicable Test Period; provided, however, that, as to the Test Period described in clause (i) of the definition of Test Period applies, the Deposits Permitted Variance shall not exceed 15%be 85% of the aggregate amount of “Total Deposits” projected in the Approved Budget over the course of such Test Period. “Test Period” shall mean (i) as to the Variance Report due to be delivered on December 12, 2018, the period from December 1, 2018, through and including December 8, 2018, (ii) the positive variance (as compared to the applicable Cash Flow Forecast) of Variance Report due to be delivered on December 19, 2018, the aggregate operating disbursements (excluding professional feesperiod from December 1, interest payments 2018, through and disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (includingincluding December 15, without limitation2018, any payments pursuant to the Management Services Agreement)) made by the Debtors shall not exceed 15% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of Variance Report due to be delivered on December 26, 2018, the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (includingperiod from December 1, without limitation2018, any payments pursuant to the Management Services Agreement)) shall not exceed 15%through and including December 22, 2018, and (biv) beginning with as to each Variance Report due on or after January 2, 2019, the delivery consecutive four-week period ending on the Saturday prior to the due date of such Variance Report. Each such Variance Report shall (1) detail the variance, if any, of actual cash disbursements, actual cash receipts and actual net cash flow (for the avoidance of doubt, including all cash expenditures for operations, professional fees and otherwise) from the Approved Budget (on a weekly basis), (2) provide an explanation of any variance greater or lesser, as applicable, than the Permitted Variance, and (3) include a statement from an officer of the third Budget Variance ReportAdministrative Borrower that to such person’s actual knowledge after due inquiry that an Event of Default has not occurred. For the avoidance of doubt, as no variance in excess of the last day total amount of anticipated expenditures set forth on each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after “Debtor Professional Fees” and “Committee Professional Fees” line items on the Closing DateApproved Budget or any updated Approved Budget shall be permitted under this Agreement, the Final Order or otherwise. Furthermore, for such Four-Week Test Periodthe avoidance of doubt, (i) the negative no variance (as compared to the applicable Cash Flow Forecast) in excess of the actual aggregate operating cash receipts total amount of the Debtors shall not exceed 10%, (ii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors anticipated expenditures set forth on the “Critical Vendor Payments” line item on the Approved Budget or any updated Approved Budget shall be permitted under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services this Agreement) made by the Debtors shall not exceed 10% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) shall not exceed 10% (such variance that does not breach this covenant, the “Permitted Variance”)Final Order or otherwise.

Budget Variance. (a) As of Thursday, August 13, 2020 and on each fourth Thursday thereafter (each four-week period ending on the last day of each applicable Two-Week Test Period commencing with immediately preceding Friday prior to the last day delivery of the first Twolatest 13-Week Test week Projection, a “Testing Period”; provided that the initial Testing Period ending after shall be deemed to include the Closing Datefull calendar week in which the Petition Date occurs), for such Two-Week Test Period the Borrower shall not permit (i) the negative variance Total Operating Disbursements made by the Borrower and its Subsidiaries during such Testing Period (as compared provided that if the 13-week Projection for such Testing Period has not yet been approved or deemed approved by the Majority Lenders, then such amount shall be reduced by any Total Operating Disbursements projected for the previous Testing Period in the Budget for the previous Testing Period and not expended during the previous Testing Period) to the Cash Flow Forecast) be greater than 110% of the actual aggregate operating cash receipts of Total Operating Disbursements as set forth in the Debtors shall not exceed 15%, Budget for such Testing Period or (ii) Operating AP Payments, Payroll/Payroll Taxes (which, for the positive variance avoidance of doubt and consistent with the Budget, shall include amounts associated with the Borrower’s “Key Employee Incentive Plan” and “Key Employee Retention Plan”) and Elk Hills Power Capacity/Reimbursement (as compared provided that if the 13-week Projection for such Testing Period has not yet been approved or deemed approved by the Majority Lenders, then each such amount shall be reduced by any operating disbursements related to each such line item projected for the applicable Cash Flow Forecast) previous Testing Period in the Budget for the previous Testing Period and not expended during the previous Testing Period), in each case, to be greater than 115% of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors amounts set forth under “MEC Affiliate Disbursements” for such line items in the Cash Flow Forecast (includingBudget for such Testing Period; provided that, without limitation, any payments for purposes of calculating variance pursuant to clause (i), professional fees and expenses and fees and expenses of the Management Services Agreement)) made by Administrative Agent and the Debtors Lenders shall not exceed 15% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate be counted toward Total Operating Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement)) shall not exceed 15%, and (b) beginning with the delivery of the third Budget Variance Report, as of the last day of each applicable Four-Week Test Period commencing with the last day of the first Four-Week Test Period ending after the Closing Date, for such Four-Week Test Period, (i) the negative variance (as compared to the applicable Cash Flow Forecast) of the actual aggregate operating cash receipts of the Debtors shall not exceed 10%, (ii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate operating disbursements (excluding professional fees, interest payments and disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) made by the Debtors shall not exceed 10% and (iii) the positive variance (as compared to the applicable Cash Flow Forecast) of the aggregate disbursements made by the Debtors set forth under “MEC Affiliate Disbursements” in the Cash Flow Forecast (including, without limitation, any payments pursuant to the Management Services Agreement) shall not exceed 10% (such variance that does not breach this covenant, the “Permitted Variance”).