Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the Senior Net Leverage Ratio, the Secured Net Leverage Ratio, the Consolidated 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 (b), (c), (d) or (e) of this Section 1.07, when calculating the Senior Net Leverage Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section 2.03(b)(i), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (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 1.07) 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 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 4 contracts

Samples: Credit Agreement (ATD Corp), Incremental Amendment (American Tire Distributors Holdings, Inc.), Incremental Amendment (ATD Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.08 (other than for the purpose of determining Pro Forma Compliance with Section 7.08), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that the Borrower, ~~redemption~~or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~repurchase~~acquisitions, ~~repayment~~Dispositions, ~~retirement or extinguishment~~ mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated Adjusted EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(x) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within 12 months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(x) of the definition of Consolidated Adjusted EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated Adjusted EBITDA with respect to such period. (e) ~~If any Indebtedness bears a floating rate~~ For purposes 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~~ Ratio, any amount in a currency other than Dollars will be converted to ~~such Indebtedness). Interest on~~ Dollars in a ~~Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined~~ manner consistent with that used by ~~a Financial Officer of~~ the Borrower ~~to be the rate~~ for purposes of ~~interest implicit in such Capitalized Lease Obligation~~ preparing its financial statements, 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 4 contracts

Samples: Credit Agreement, Credit Agreement (Time Inc.), Credit Agreement (Time Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that Parent or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Total Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that Parent, ~~redemption~~or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~repurchase~~acquisitions, ~~repayment~~dispositions, ~~retirement or extinguishment~~ mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(J) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of Parent as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within eighteen (18) months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than Dollars will be converted to Dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 4 contracts

Samples: Credit Agreement (OUTFRONT Media Inc.), Credit Agreement (OUTFRONT Media Inc.), Credit Agreement (OUTFRONT Media Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that the Borrower, ~~redemption~~or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~repurchase~~Acquisitions, ~~repayment~~Dispositions, ~~retirement or extinguishment~~ mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(J) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, Acquisition, Disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, Acquisition, Disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within twelve (12) months after the date of any Acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 3 contracts

Samples: Credit Agreement (CBS Radio Inc.), Credit Agreement (CBS Radio Inc.), Credit Agreement (CBS Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests (including measurements of Consolidated Total Assets or Consolidated EBITDA), including the ~~Senior Net Leverage~~ Consolidated EBITDA to Consolidated Interest Expense Ratio, ~~the Secured Net Leverage~~ Consolidated First Lien Debt to Consolidated EBITDA Ratio, ~~the~~ Consolidated ~~Net Leverage~~ Secured Debt to Consolidated EBITDA Ratio and ~~the Fixed Charge Coverage~~ Consolidated Total Debt to Consolidated EBITDA Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.12; provided that, notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.12, when calculating the ~~Senior Net Leverage~~ Consolidated First Lien Debt to Consolidated EBITDA Ratio for purposes of (i) the definition of “Applicable ~~Rate~~Margin,” and (ii) Section ~~2.03(b)(i~~5.2(a)(i) and Section 5.2(a)(ii), the events described in this Section ~~1.07~~ 1.12 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma effect; ~~provided however~~ provided, however, that for purposes of any determination under the proviso to Section 5.2(a)(ii), Consolidated First Lien Debt shall be determined after giving pro forma effect to any voluntary prepayments of Term Loans made pursuant to Section ~~2.03(a) during any~~ 5.1 after the end of the Borrower’s most recently ended full 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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the ~~time such prepayment~~ date of the applicable payment to be made pursuant to such Section ~~2.03(b)(i~~5.2(a)(ii) ~~is due but shall not be given pro forma effect thereafter~~assuming such prepayments had been made on the last day of such fiscal year. In addition, whenever a financial ratio or test is to be calculated on a pro forma ~~basis~~basis or requires pro forma compliance, 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)~~Section 9.1 Financials have been delivered. (b) For purposes of calculating any financial ratio or test (including Consolidated Total Assets or ~~Total Assets~~Consolidated EBITDA), Specified Transactions (with any ~~incurrence~~ Incurrence or ~~repayment~~ Refinancing of any Indebtedness in connection therewith to be subject to clause (d) of this Section ~~1.07~~1.12) 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 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~~Assets or “unrestricted” cash and Cash Equivalents, on the last day of the applicable Test Period). If If, since the beginning of any applicable Test ~~Period~~ 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~~1.12, then such financial ratio or test (or including Consolidated Total ~~Assets~~Assets and Consolidated EBITDA) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.12. (c) Whenever pro forma effect or a determination of pro forma compliance is to be given to a Specified ~~Transaction~~Transaction or a Specified Restructuring, the pro forma calculations shall be made in good faith by ~~a Financial~~ an Authorized Officer of the Borrower and may include, for the avoidance of doubt, the amount of “~~run-~~run rate” cost savings, operating expense reductions and cost synergies and other synergies projected by the Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions) ~~which~~ or Specified Restructuring that is being given pro forma effect or for which a determination of pro forma compliance is being made 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~~ reductions, cost synergies ~~are~~ or other synergies have been taken, have been committed to be ~~taken or~~ taken, with respect to which substantial steps have been taken or which 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~~ reductions, cost synergies and other synergies had been realized on the first day of such period and as if such cost savings, operating expense ~~reductions~~ reductions, cost synergies and other synergies were realized during the entirety of such period and “~~run-~~run rate” means the full recurring benefit for a period that is associated with any action taken, any action committed to be ~~taken or~~ taken, any action with respect to which substantial steps have been taken or ~~are~~ any action that is expected to be taken (including any savings expected to result from the elimination of ~~a public target’s compliance costs with public company requirements~~Public Company Costs) 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 or Specified Transaction, and any such adjustments included in the initial pro forma calculations shall continue to apply to subsequent calculations of such financial ratios or tests, including during any subsequent test periods in which the effects thereof are expected to be realizable; provided that (A) such amounts are reasonably identifiable ~~and factually supportable~~ in the good faith judgment of the Borrower, (B) such actions are taken, such actions are committed to be ~~taken or~~ taken, substantial steps with respect to ~~which substantial steps~~ such action have been taken or such actions are expected to be taken no later than ~~twelve (12) months~~ eight fiscal quarters after the date of consummation of such Specified Transaction or the date of initiation of such Specified Restructuring (or, with respect to the Transactions, twelve fiscal quarters) 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. (d) In the event that the Borrower or any Restricted Subsidiary ~~incurs~~ Incurs (including by assumption or ~~guarantees), issues~~ guarantee) or ~~repays~~ Refinances (including by redemption, repurchase, repayment, 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)~~Indebtedness, 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~~ Incurrence or ~~redemption~~ Refinancing of ~~Indebtedness~~Indebtedness (including pro forma effect to the application of the net proceeds therefrom), 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~~ Consolidated EBITDA to Consolidated Interest Expense Ratio (or similar ratio), in which case such ~~incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement~~ Incurrence or ~~extinguishment~~ Refinancing of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period); provided that, with respect to any Incurrence of Indebtedness permitted by the provisions of this Agreement in reliance on the pro forma calculation of the Consolidated First Lien Debt to Consolidated EBITDA Ratio, the Consolidated Secured Debt to Consolidated EBITDA Ratio, the Consolidated EBITDA to Consolidated Interest Expense Ratio and/or the Consolidated Total Debt to Consolidated EBITDA Ratio, as applicable, shall not give pro forma effect to any Indebtedness being Incurred (or expected to be Incurred) substantially simultaneously or contemporaneously with the Incurrence of any such Indebtedness in reliance on any “basket” set forth in this Agreement (including the Incremental Base Amount, any “baskets” measured as a percentage of Consolidated Total Assets or Consolidated EBITDA) including any Credit Event under the Revolving Credit Facility or, except to the extent expressly required to be calculated otherwise in Section 2.14 or Section 10.1(u), any Additional/Replacement Revolving Credit Facility. (e) Whenever pro forma effect is to be given to a pro forma event, the pro forma calculations shall be made in good faith by an Authorized Officer of the Borrower. 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~~ Consolidated EBITDA to Consolidated Interest Expense Ratio is made had been the applicable rate for the entire period (taking into account any interest ~~hedging arrangements~~ Hedging Agreements applicable to such Indebtedness). To the extent interest expense generated by Hedging Obligations that have been terminated is included in Consolidated Interest Expense prior to the date of the event for which the calculation of the Consolidated EBITDA to Consolidated Interest Expense Ratio is being made, Consolidated Interest Expense shall be adjusted to exclude such expense. Interest on a ~~Capitalized~~ Financing Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by ~~a Financial~~ an Authorized Officer of the Borrower to be the rate of interest implicit in such ~~Capitalized~~ Financing 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, period or, if ~~none~~lower, ~~then based upon~~ the maximum commitments under such ~~optional rate chosen~~ revolving credit facility as of the ~~Borrower may designate~~date of the event for which the calculation of the Consolidated EBITDA to Consolidated Interest Expense Ratio is being made, except as set forth in Section 1.12(d). (f) ~~Notwithstanding anything~~ Any such pro forma calculation may include, without limitation, (1) all adjustments of the type described in clause (a)(viii) of the definition of “Consolidated EBITDA” to the ~~contrary~~ extent such adjustments, without duplication, continue to be applicable to such Test Period, and (2) adjustments calculated in ~~this Section 1.07 or in any classification~~ accordance with Regulation S-X under ~~GAAP of any Person, business, assets or operations in respect of which a definitive agreement for~~ the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummatedSecurities Act. ~~(g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.~~

Appears in 3 contracts

Samples: Credit Agreement (MultiPlan Corp), Credit Agreement (MultiPlan Corp), Incremental Agreement (MultiPlan Corp)

Pro Forma and Other Calculations. (a1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ First Lien Net Leverage Ratio, the ~~Secured Net Leverage Ratio, the Consolidated~~ Total Net Leverage Ratio and the Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided ~~that,~~ that notwithstanding anything to the contrary in clauses (b2), (c3), (d4), (5) or (e7) of this Section 1.07, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (ia) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (iic) ~~Section 2.03(b)(i~~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 ~~2.03(a~~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 ~~2.03(b)(i~~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 such prepayment pursuant to Section ~~2.03(b)(i~~2.05(2)(a) is due 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 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). (b2) For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (~~with any~~ and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection ~~therewith to be subject to clause (d) of this Section 1.07~~therewith) that have been made (ia) during the applicable Test Period or (iib) 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~~1.07 as if such Specified Transaction had occurred at the beginning of the most recently ended Test Period. (c3) 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 ~~and synergies projected by the Borrower in good faith to result~~ resulting from or ~~relating~~ 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 (in 24) months after the ~~good faith determination~~ date of ~~the Borrower) (calculated~~ 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 (Aa) such amounts are (i) reasonably identifiable and factually supportable in the good faith judgment of the ~~Borrower,~~ Borrower and (Bii) 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~~ twenty-four (1224) months after the date of such Specified Transaction and (Cb) 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. (d4) 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 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, ~~assumption~~issuance, ~~guarantee~~repayment or redemption of Indebtedness, issuance, ~~redemption~~repurchase or redemption of Disqualified Stock or Preferred Stock, ~~repurchase~~or establishment or elimination of any Designated Revolving Commitments, ~~repayment, retirement or extinguishment of Indebtedness~~ 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(b). (e5) 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,~~ 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f6) 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~~ disposition thereof has been entered ~~into as discontinued operations~~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~~ disposition shall have been consummated. (g7) 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

Samples: 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. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test Period; provided, however, that, for purposes of any pro forma calculation of the Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower, or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to any limitationslimitation set forth in clause (z) to the ~~Fixed Charge Coverage Ratio~~ proviso to clause (~~or similar ratio)~~a)(J) of the definition thereofof Consolidated EBITDA, ~~in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, Acquisition, Disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, Acquisition, Disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within twelve (12) months after the date of any Acquisition, amalgamation or merger (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to any limitationsthe limitation set forth in clause (z) to the proviso to clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) Notwithstanding anything in this Agreement or any Loan Document to the ~~contrary~~ contrary, when calculating any applicable ratio or determining other compliance with this Agreement (including the determination of compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom) in ~~this Section 1.07 or~~ connection with a Specified Transaction undertaken in ~~any classification under GAAP~~ connection with the consummation of a Limited Condition Acquisition and the incurrence of any ~~Person~~Indebtedness (and use of the proceeds thereof) in connection therewith, ~~business~~the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, ~~assets~~ is continuing or ~~operations~~ would result therefrom or the date of determination of such other applicable covenant shall, at the option of the Borrower (the Borrower’s election to exercise such option in ~~respect of which a~~ connection with any Limited Condition Acquisition, an “LCA Election”), be deemed to be the date the definitive ~~agreement~~ agreements for ~~the Disposition thereof has been~~ such Limited Condition Acquisition are entered into ~~as discontinued operations~~(the “LCA Test Date”) and if, no after such ratios and other provisions are measured on a pro forma basis after giving effect to such Limited Condition Acquisition and the other Specified Transactions to be entered into in connection therewith (including any incurrence of Indebtedness (including any Incremental Facility) and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive fiscal quarter period being used to calculate such financial ratio ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such provisions shall be ~~given~~ deemed to ~~any discontinued operations (~~have been complied with. For the avoidance of doubt, if and after the ~~EBITDA attributable to any such Person, business, assets or operations shall not be excluded~~ Borrower has made an LCA Election for any ~~purposes hereunder~~Limited Condition Acquisition, (x) ~~until~~ if any of such ~~Disposition shall have been consummated.~~ ratios are exceeded as a result of fluctuations in such ratio (gincluding due to fluctuations in Consolidated EBITDA) ~~Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on~~ 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 and any related Specified Transaction and/or incurrence of Indebtedness in connection therewith are permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related Specified Transactions. If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio (specifically excluding the determination of the Applicable Rate and the financial covenant set forth in Section 7.09) 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 ~~determination~~such Limited Condition Acquisition, any such ratio or basket shall be calculated (I) 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) have been consummated and (II) on a pro forma basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof).

Appears in 2 contracts

Samples: Credit Agreement (CBS Corp), Credit Agreement (Entercom Communications Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that Parent or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Total Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that Parent, ~~redemption~~or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~repurchase~~acquisitions, ~~repayment~~dispositions, ~~retirement or extinguishment~~ mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(J) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of Parent as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within twelve (12) months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition thereof, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 2 contracts

Samples: Credit Agreement (Outfront Media Minnesota LLC), Credit Agreement (CBS Outdoor Americas Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, ~~financial ratios and tests, including~~ the ~~Senior Net~~ Total Leverage Ratio, ~~the Secured Net Leverage Ratio, the Consolidated Net~~ First Lien Leverage Ratio and ~~the Fixed Charge Coverage Ratio~~ Consolidated EBITDA shall be calculated in the manner prescribed by this ~~Section 1.07~~Section; provided that, ~~notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07,~~ when calculating ~~the Senior Net Leverage Ratio~~ any such ratio or amount (i) for purposes of ~~(i)~~ the definition of ~~“Applicable Rate,”~~ ECF Percentage and (ii) for the purposes of actual compliance with the financial maintenance covenant contained in Section ~~2.03(b)(i~~6.10 (as opposed to a pro forma calculation for purposes of another provision), the events described in ~~this Section 1.07~~ Sections 1.03(b), 1.03(c) and 1.03(d) below 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating ~~any financial ratio or test (or~~ the First Lien Leverage Ratio, the Total ~~Assets)~~Leverage Ratio and Consolidated EBITDA, Specified Transactions (~~with any incurrence or repayment~~ including, for the avoidance of ~~any Indebtedness in connection therewith to be subject to clause (d) of this Section 1.07~~doubt, the Transactions) that have been ~~made (i)~~ completed by Holdings or any of its Restricted Subsidiaries during the applicable Test Period or ~~(ii)~~ subsequent to the end of such Test ~~Period~~ Period, and prior to or simultaneously with the event ~~for~~ with respect to which the calculation of any such ratio is ~~made~~ being 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~~ such Test Period any ~~Person~~ 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~~ completed any Specified Transaction that would have required adjustment pursuant to this ~~Section 1.07~~Section, then ~~such financial ratio or test (or~~ the First Lien Leverage Ratio and the Total ~~Assets)~~ Leverage Ratio shall be calculated ~~to give~~ giving pro forma effect thereto for such period as if such Specified Transaction occurred at the beginning of the applicable Test Period. Notwithstanding the foregoing, at the election of the Borrower, such pro forma adjustment shall not be required to be determined for any acquired entity or business to the extent the aggregate consideration paid in ~~accordance~~ connection with ~~this Section 1.07~~such acquisition is less than $5,000,000. (c) ~~Whenever~~ In the event that Holdings or any Restricted Subsidiary incurs, assumes, guarantees, redeems, repays, retires or extinguishes any Indebtedness included in the definition of Total Debt (other than Indebtedness incurred or repaid under any revolving credit facility unless all such Indebtedness has been permanently repaid and no such amount has been replaced), subsequent to the end of the Test Period with respect to which the First Lien Leverage Ratio or the Total Leverage Ratio, as the case may be, is being calculated, and prior to or simultaneously with the event with respect to which the calculation of any such ratio is being made, the First Lien Leverage Ratio or the Total Leverage Ratio, as the case may be, shall be calculated giving pro forma effect is to ~~be given to a Specified Transaction~~such incurrence, assumption, guarantee, redemption, repayment, retirement or extinguishment of Indebtedness and the resulting proceeds therefrom, as if the same had occurred on the last day of the applicable Test Period. (d) All pro forma calculations ~~shall~~ permitted or required to be made pursuant to this Agreement (i) may include those adjustments permitted by and calculated in ~~good faith by a Financial Officer~~ accordance with Article 11 of Regulation S-X under the ~~Borrower~~ Securities Act and (ii) may ~~include, for the avoidance of doubt, the amount of~~ include pro forma “~~run-~~run rate” cost savings, operating expense reductions and synergies (net of actual amounts realized) related to any Specified Transaction that are projected by ~~the Borrower~~ such Person in good faith to result from ~~or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect~~ actions 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~~such Person) ~~(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 within 24 months after such Specified Transaction; provided that ~~(A)~~ all such ~~amounts are~~ adjustments shall be set forth in a reasonably ~~identifiable and factually supportable~~ detailed certificate of a Financial Officer of the Borrower certifying that such adjustments have been prepared in ~~the~~ good faith ~~judgment~~ based upon assumptions believed to be reasonable, using, for purposes of making such calculations, the historical consolidated financial statements of the ~~Borrower,~~ Borrower (~~B) such actions are taken, committed to~~ which shall 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~~ reformulated as if such Specified ~~Transaction~~ 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. (d) In the event~~ Specified Transaction that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), in each case included in the calculations of any financial ratio or test, (i)~~ consummated 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~~period, ~~then such financial ratio or test shall be calculated giving pro forma effect to such incurrence, issuance, repayment or redemption of Indebtedness, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred been consummated on the first day of the applicable period); provided further that the aggregate amount added to or included in Consolidated EBITDA pursuant to clause (ii) above or clauses (a)(vii) or (a)(viii) of the definition of “Consolidated EBITDA” for any Test Period), shall not exceed 25.0% of Consolidated EBITDA (giving effect to such adjustments) for such 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 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. For purposes of ~~making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a~~ determining pro forma ~~basis~~ compliance with the financial maintenance covenant set forth in Section 6.10, with respect to any Test Period ending prior to March 31, 2019, the ratio applicable to the Test Period ending March 31, 2019 shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateapplicable. (f) Notwithstanding anything to the contrary ~~in this Section 1.07~~ herein, with respect to any amounts incurred 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~~ transactions entered into ~~as discontinued operations~~(or consummated) in reliance on a provision of this Agreement that does not require compliance with a financial ratio (any such amounts, ~~no pro forma effect~~ the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio (including Section 6.10 hereof, any First Lien Leverage Ratio test or any Total Leverage Ratio test) (any such amounts, the “Incurrence-Based Amounts”), it is understood and agreed that the Fixed Amounts shall be ~~given~~ disregarded in the calculation of the financial ratio or test applicable to any ~~discontinued operations (and~~ substantially concurrent utilization of the ~~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~~Incurrence-Based Amounts. (g) ~~Any~~ For purposes of determining the permissibility of any action, change, transaction or event that requires a calculation of any financial ratio or test (including any leverage ratio or the amount of Consolidated EBITDA), such financial ratio or test shall be calculated at the time such action is taken, such change is made, such transaction is consummated or such event occurs (or at such other time elected by the Borrower in accordance with Section 1.03(h) below), as the case may be, and no default or event of default shall be deemed to have occurred solely as a result of a change in such financial ratio or test occurring after the time such action is taken, such change is made, such transaction is consummated or such event occurs (or at such time elected by the Borrower in accordance with Section 1.03(h) below), as the case may be. (h) Notwithstanding anything in this Agreement or any other Loan Document to the contrary, to the extent that this Agreement or any other Loan Document requires (i) compliance with any financial ratio or test (including the financial maintenance covenant set forth in Section 6.10 hereof), (ii) accuracy of representations and warranties (other than Specified Representations), (iii) the absence of a Default or Event of Default (or any type of Default or Event of Default) or (iv) testing availability under baskets set forth herein (including compliance with the Incremental Facility Amount or any cap expressed as a percentage of Consolidated EBITDA), in each case, as a condition to (x) the consummation of any transaction in connection with any acquisition or similar Investment, (y) the making of any Restricted Payment and/or (z) the making of any Restricted Debt Payment, the determination of ~~Total Assets shall~~ whether the relevant condition is satisfied may be ~~made by reference~~ made, at the election of the Borrower: (A) in the case of any acquisition or similar Investment, at the time of the execution of the definitive agreement with respect to the ~~last day~~ relevant acquisition or Investment, after giving effect to the acquisition or Investment and any related Indebtedness and Liens on a pro forma basis, (B) in the case of any Restricted Payment, at the time of the ~~Test Period most recently ended~~ declaration of such Restricted Payment, after giving effect to the relevant Restricted Payment on a pro forma basis or (C) in the case of any Restricted Debt Payment, at the time of delivery of irrevocable (which may be conditional) notice with respect to such Restricted Debt Payment, after giving effect to the relevant Restricted Debt Payment on a pro forma basis. If the Borrower makes any such election to determine whether the relevant condition is satisfied at the times set forth in the foregoing clauses (A), (B) or (C), for purposes of calculating the availability under any basket hereunder in connection with any action or transaction following such time and prior to the ~~relevant~~ earlier of the date on which such acquisition or other Investment, Restricted Payment or Restricted Debt Payment, as applicable, is consummated or the date that the definitive agreement or date for Restricted Debt Payment or Restricted Payment specified in the notice or declaration therefor is terminated, expires or passes, as applicable, without consummation thereof, any such basket shall be determined or tested giving pro forma effect to such acquisition or other Investment, Restricted Payment or Restricted Debt Payment, as applicable, and any actions or transactions related thereto (including the incurrence of ~~determination~~any Indebtedness in connection therewith).

Appears in 2 contracts

Samples: Credit Agreement (AssetMark Financial Holdings, Inc.), Credit Agreement (AssetMark Financial Holdings, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio, the~~ Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the ~~Fixed Charge~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that, ~~notwithstanding~~ not-withstandingnotwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07, when calculating the ~~Senior~~ Secured Net Leverage Ratio for purposes of ~~(i) the definition of “Applicable Rate,” and (ii)~~ Section 2.03(b)(i), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (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 1.07) 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 ~~the~~ 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. (c) 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. (d) 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~~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~~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 ~~twelve~~ twenty-four (1224) 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. (de) In the event that ~~the~~ Holdings, a Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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~~ Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period). (ef) 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~~ 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 or Finance Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower Representative to be the rate of interest implicit in such Capitalized or Finance 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 Representative or Holdings or the applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (fg) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (gh) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 2 contracts

Samples: Second Lien Credit Agreement, Second Lien Credit Agreement (DTZ Jersey Holdings LTD)

Appears in 2 contracts

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

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests (including measurements of Total Assets or Consolidated EBITDA), including the ~~Senior Net~~ First Lien Leverage Ratio, ~~the~~ Senior Secured ~~Net Leverage Ratio, the Consolidated Net~~ Leverage Ratio and ~~the Fixed Charge Coverage~~ Total Leverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that, notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07, when calculating the ~~Senior Net~~ First Lien Leverage Ratio and Total Leverage Ratio, as applicable, for purposes of (i) the definition of “Applicable ~~Rate~~Margin,” and (ii) Section ~~2.03(b)(i~~2.12(c) and Section 2.12(d), 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 for purposes of any determination under the proviso to Section 2.12(d), the First Lien Leverage Ratio shall be determined after giving pro forma effect to any voluntary prepayments of Term Loans made pursuant to Section ~~2.03(a) during any~~ 2.12 after the end of Holdings’ most recently ended full 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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the ~~time such prepayment~~ date of the applicable payment to be made pursuant to such Section ~~2.03(b)(i~~2.12(d) ~~is due but shall not be given pro forma effect thereafter~~assuming such prepayments had been made on the last day of such fiscal year. In addition, whenever a financial ratio or test is to be calculated on a pro forma ~~basis~~basis or requires pro forma compliance, 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)~~Section 5.04 Financials have been delivered. (b) For purposes of calculating any financial ratio or test (including Total Assets or ~~Total Assets~~Consolidated EBITDA), Specified Transactions (with any incurrence or ~~repayment~~ Refinancing 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 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~~Assets or “unrestricted” cash and Cash Equivalents, on the last day of the applicable Test Period). If If, since the beginning of any applicable Test ~~Period~~ Period, any Person that subsequently became a Restricted Subsidiary or was merged, amalgamated or consolidated with or into ~~the Borrower~~ Holdings 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 including Total ~~Assets~~Assets and Consolidated EBITDA) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (c) Whenever pro forma effect or a determination of pro forma compliance is to be given to a Specified Transaction, the pro forma calculations shall be made in good faith by a ~~Financial~~ Responsible Officer of the Canadian Borrower and may include, for the avoidance of doubt, the amount of “~~run-~~run rate” cost savings, operating expense reductions and cost synergies and other synergies projected by the Canadian Borrower in good faith to result from or relating to any Specified Transaction (including the Transactions) ~~which~~ that is being given pro forma effect or for which a determination of pro forma compliance is being made 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~~ reductions, cost synergies ~~are~~ or other synergies have been taken, have been committed to be ~~taken or~~ taken, with respect to which substantial steps have been taken or which are expected to be taken (in the good faith determination of the Canadian Borrower) (calculated on a pro forma basis as though such cost savings, operating expense ~~reductions~~ reductions, cost synergies and other synergies had been realized on the first day of such period and as if such cost savings, operating expense ~~reductions~~ reductions, cost synergies and other synergies were realized during the entirety of such period and “~~run-~~run rate” means the full recurring benefit for a period that is associated with any action taken, any action committed to be ~~taken or~~ taken, any action with respect to which substantial steps have been taken or ~~are~~ any action that is 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, and any such adjustments included in the initial pro forma calculations shall continue to apply to subsequent calculations of such financial ratios or tests, including during any subsequent test periods in which the effects thereof are expected to be realizable; provided that (A) such amounts are reasonably identifiable ~~and factually supportable~~ in the good faith judgment of the Canadian Borrower, (B) such actions are taken, such actions are committed to be ~~taken or~~ taken, substantial steps with respect to ~~which substantial steps~~ such action have been taken or such actions are expected to be taken no later than ~~twelve (12) months~~ six fiscal quarters after the date of 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 all such pro forma adjustments pursuant to this clause (c) or clause (l) of the definition of “Consolidated EBITDA” in any Test Period shall not exceed 20% of Consolidated EBITDA for such Test Period (in each case, calculated before giving effect to any such adjustment). (d) In the event that ~~the Borrower~~ Holdings or any Restricted Subsidiary incurs (including by assumption or ~~guarantees), issues~~ guarantee) or ~~repays~~ Refinances (including by redemption, repurchase, repayment, 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)~~Indebtedness, 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~~ incurrence or ~~redemption~~ Refinancing of ~~Indebtedness~~Indebtedness (including pro forma effect to the application of the net proceeds therefrom), in each case to the extent required, as if the same had occurred on the last day of the applicable Test ~~Period (except~~ Period; provided that, with respect to any incurrence of Indebtedness permitted by the provisions of this Agreement in reliance on the ~~case~~ pro forma calculation of the ~~Fixed Charge Coverage~~ First Lien Leverage Ratio, the Senior Secured Leverage Ratio and/or the Total Leverage Ratio, as applicable, shall not give pro forma effect to any Indebtedness being incurred (or ~~similar ratio)~~expected to be incurred) substantially simultaneously or contemporaneously with the incurrence of any such Indebtedness in reliance on any “basket” set forth in this Agreement (including any “baskets” measured as a percentage of Total Assets or Consolidated EBITDA) including any Credit Event under the Revolving R-2 Facility or, except to the extent expressly required to be calculated otherwise in ~~which case such incurrence~~Section 2.21, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period)any Replacement Revolving Credit Facility. (e) ~~If any Indebtedness bears a floating rate of interest and is being given~~ Whenever pro forma ~~effect~~effect is to be given to a pro forma event, the ~~interest on such Indebtedness~~ pro forma calculations shall be ~~calculated as if the rate~~ made in ~~effect on the date~~ good faith by a Responsible Officer 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)Canadian Borrower. Interest on a ~~Capitalized~~ Finance Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a ~~Financial~~ Responsible Officer of the Canadian Borrower to be the rate of interest implicit in such ~~Capitalized~~ Finance 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 Canadian Borrower or applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, period or, if ~~none~~lower, ~~then based upon~~ the maximum commitments under such ~~optional rate chosen~~ revolving credit facility, except as ~~the Borrower may designate~~set forth in Section 1.07(d). (f) ~~Notwithstanding anything~~ Any such pro forma calculation may include, without limitation, adjustments calculated in accordance with Regulation S-X under the Securities Act; provided that the aggregate amount of all such pro forma adjustments pursuant to this clause (f), clause (c) above or clause (l) of the ~~contrary in this Section 1.07 or~~ definition of “Consolidated EBITDA” in any ~~classification under GAAP~~ Test Period shall not exceed 20% of ~~any Person~~Consolidated EBITDA for such Test Period (in each case, ~~business, assets or operations in respect of which a definitive agreement for the Disposition thereof has been entered into as discontinued operations, no pro forma~~ calculated before giving effect ~~shall be given to any discontinued operations (and the 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~~adjustment). ~~(g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.~~

Appears in 2 contracts

Samples: Credit Agreement (Telesat Holdings Inc.), Credit Agreement (Telesat Holdings Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ First Lien Net Leverage Ratio, the ~~Secured~~ Total Net Leverage Ratio, the ~~Consolidated Net Leverage Ratio and the~~ Fixed Charge Coverage Ratio and the Interest Coverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.12; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.12, when calculating the ~~Senior Net Leverage~~ Fixed Charge Coverage Ratio for purposes of Section 11.11 (i) other than for the ~~definition~~ purpose of ~~“Applicable Rate,” and (ii)~~ determining pro forma compliance with Section ~~2.03(b)(i~~11.11), the events described in this Section ~~1.07~~ 1.12 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.12) that have been made (i) during the applicable Test Period or (ii) other than as described in the 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 or Consolidated Total Assets, 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~~ CGI Borrower or any of the Restricted ~~Subsidiary~~ 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~~1.12, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.12. (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 ~~Financial Officer~~ responsible financial or accounting officer of the Borrower Representative and may include, for the avoidance of doubt, the amount of “~~run-~~run- rate” cost savings, operating expense reductions and synergies resulting from or relating to such Specified Transaction 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~~ as a result of 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 such that “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~~ for 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the ~~Borrower~~Borrower Representative, (B) such actions are ~~taken, committed to be~~ taken or substantial steps with respect to ~~which substantial steps have been taken~~ such actions are or are expected to be taken no later than ~~twelve~~ eighteen (1218) months after the date of such Specified ~~Transaction~~ 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. (d) In the event that ~~the~~ (x) CGI Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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 each case included~~ in the ~~calculations~~ ordinary course of business for working capital purposes) or (y) CGI Borrower or any ~~financial ratio~~ Restricted Subsidiary issues, repurchases or ~~test~~redeems Disqualified 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except (I) in the case of calculating the “Average Revolver Debt,” any such incurrence or repayment of Revolving Loans will be given effect as if the same had occurred on the first day of the applicable Test Period and (II) in the case of the Fixed Charge Coverage Ratio and the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 date of the event for which the calculation of the Fixed Charge Coverage Ratio or the Interest Coverage Ratio, as applicable, 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~~ an Authorized 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~~ 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 Representative or any applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) ~~Notwithstanding anything~~ In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of: (i) determining compliance with any provision of this Agreement which requires the calculation of any financial ratio or test, including the First Lien Net Leverage Ratio, the Total Net Leverage Ratio, the Fixed Charge Coverage Ratio and the Interest Coverage Ratio; or (ii) testing availability under baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets); in each case, at the option of CGI Borrower (CGI Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder shall be either (i) on the date of execution of the definitive agreement with respect to such Limited Condition Transaction or (ii) on the date of the consummation of such Limited Condition Transaction (the date chosen pursuant to such LCT Election, the “LCT Test Date”), and if, after giving Pro Forma Effect to the ~~contrary~~ Limited Condition Transaction, CGI Borrower or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in ~~this Section 1.07~~ compliance with such ratio, test or basket, such ratio, test or basket shall be deemed to have been complied with. For the avoidance of doubt, if CGI Borrower has made an LCT Election and any of the ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would have failed to have been satisfied as a result of fluctuations in any ~~classification under GAAP~~ such ratio, test or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Total Assets of CGI Borrower or the Person subject to such Limited Condition Transaction, at any ~~Person~~time other than the LCT Test Date at or prior (as applicable) to the consummation of the relevant transaction or action, ~~business~~such baskets, ~~assets~~ tests or operations in respect of which a definitive agreement for the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall ratios will not be ~~excluded~~ deemed to have failed to have been satisfied as a result of such fluctuations. If CGI Borrower has made an LCT Election for any ~~purposes hereunder) until such Disposition shall have been consummated. (g) Any determination of Total Assets shall be made by reference to~~ Limited Condition Transaction, then in connection with any event or transaction occurring after the ~~last day of the~~ relevant LCT Test ~~Period most recently ended on or~~ Date and prior to the ~~relevant~~ earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or date for redemption, repurchase, defeasance, satisfaction and discharge or repayment specified in an irrevocable notice for such Limited Condition Transaction is terminated, expires or passes, as applicable, without consummation of ~~determination~~such Limited Condition Transaction (a “Subsequent Transaction”) in connection with which a ratio, test or basket availability calculation must be made on a Pro Forma Basis or giving Pro Forma Effect to such Subsequent Transaction, for purposes of determining whether such ratio, test or basket availability has been complied with under this Agreement, any such ratio, test or basket shall be required to be satisfied 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 until such time as the applicable Limited Condition Transaction has actually closed or the definitive agreement with respect thereto has been terminated.

Appears in 2 contracts

Samples: Credit Agreement (Canada Goose Holdings Inc.), Credit Agreement (Canada Goose Holdings Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, ~~financial ratios and tests~~Financial Incurrence Tests, including the ~~Senior~~ Interest Coverage Ratio, the First Lien Net Leverage Ratio, the Secured Net Leverage ~~Ratio, the Consolidated Net Leverage~~ Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Net Leverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.12; provided ~~that,~~ that notwithstanding anything to the contrary in clauses (b), (c), (d), (e) or (ef) of this Section ~~1.07~~1.12, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (i) determining the ~~definition of~~ “~~Applicable~~ Commitment Fee Rate,” ~~and~~ (ii) Section ~~2.03(b)(i~~10.9 (other than for the purpose of determining pro forma compliance with Section 10.9) and (iii) Section 5.2(a)(ii), in each case, (x) the events described in this Section ~~1.07~~ 1.12 that occurred subsequent to the end of the applicable Test Period shall not be given pro forma ~~effect; provided however~~ effect (except that ~~voluntary prepayments made pursuant~~ the ECF Payment Percentage shall be calculated giving effect to ~~Section 2.03(a~~the prepayment) ~~during any fiscal year~~ and (~~without duplication~~ y) the effect of any ~~prepayments in such fiscal year that reduced the amount of Excess Cash Flow required to be repaid pursuant to Section 2.03(b)(i) for any prior fiscal year)~~ LCT Election shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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)disregarded. (b) For purposes of calculating any ~~financial ratio~~ Financial Incurrence Test or ~~test (~~compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.12) that have been made (i) during the applicable Test Period or (ii) other than as described in the proviso to clause (a) above, subsequent to such Test Period and prior to or ~~simultaneously~~ concurrently with the event for which the calculation of any such ~~ratio~~ Financial Incurrence Test, or any such calculation of Consolidated EBITDA or Consolidated Total Assets, 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 the Restricted ~~Subsidiary~~ 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~~1.12, then such ~~financial ratio or test~~ Financial Incurrence Test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.12. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 2 contracts

Samples: Credit Agreement (Surgery Partners, Inc.), Credit Agreement (Surgery Partners, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ First Lien Net Leverage Ratio, the ~~Secured~~ Total Net Leverage Ratio, the ~~Consolidated Net Leverage Ratio and the~~ Fixed Charge Coverage Ratio and the Interest Coverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.12; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.12, when calculating the ~~Senior Net Leverage~~ Fixed Charge Coverage Ratio for purposes of Section 11.11 (i) other than for the ~~definition~~ purpose of ~~“Applicable Rate,” and (ii)~~ determining pro forma compliance with Section ~~2.03(b)(i~~11.11), the events described in this Section ~~1.07~~ 1.12 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.12) that have been made (i) during the applicable Test Period or (ii) other than as described in the 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 or Consolidated Total Assets, 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~~ CGI Borrower or any of the Restricted ~~Subsidiary~~ 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~~1.12, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.12. (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 ~~Financial Officer~~ responsible financial or accounting officer of the Borrower Representative and may include, for the avoidance of doubt, the amount of “~~run-~~run- rate” cost savings, operating expense reductions and synergies resulting from or relating to such Specified Transaction 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~~ as a result of 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 such that “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~~ for 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; provided that (A) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the ~~Borrower~~Borrower Representative, (B) such actions are ~~taken, committed to be~~ taken or substantial steps with respect to ~~which substantial steps have been taken~~ such actions are or are expected to be taken no later than ~~twelve~~ eighteen (1218) months after the date of such Specified ~~Transaction~~ 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. (d) In the event that ~~the~~ (x) CGI Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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 each case included~~ in the ~~calculations~~ ordinary course of business for working capital purposes) or (y) CGI Borrower or any ~~financial ratio~~ Restricted Subsidiary issues, repurchases or ~~test~~redeems Disqualified 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, in each case to the extent required, as if the same had occurred on the last day of the applicable Test Period (except (I) in the case of calculating the “Average Revolver Debt,” any such incurrence or repayment of any revolving loans, including the Revolving Loans under this Agreement and the revolving loans under the Term Loan Credit Documents (if any) will be given effect as if the same had occurred on the first day of the applicable Test Period and (II) in the case of the Fixed Charge Coverage Ratio and the Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 date of the event for which the calculation of the Fixed Charge Coverage Ratio or the Interest Coverage Ratio, as applicable, 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~~ an Authorized Officer of the Borrower Representative to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with ~~GAAP~~IFRS. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a ~~eurocurrency~~ 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 Representative or any applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) ~~Notwithstanding anything~~ In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of: (i) determining compliance with any provision of this Agreement which requires the calculation of any financial ratio or test, including the First Lien Net Leverage Ratio, the Total Net Leverage Ratio, the Fixed Charge Coverage Ratio and the Interest Coverage Ratio; or (ii) testing availability under baskets set forth in this Agreement (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets); in each case, at the option of CGI Borrower (CGI Borrower’s election to exercise such option in connection with any Limited Condition Transaction, an “LCT Election”), the date of determination of whether any such action is permitted hereunder shall be either (i) on the date of execution of the definitive agreement with respect to such Limited Condition Transaction or (ii) on the date of the consummation of such Limited Condition Transaction (the date chosen pursuant to such LCT Election, the “LCT Test Date”), and if, after giving Pro Forma Effect to the ~~contrary~~ Limited Condition Transaction, CGI Borrower or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in ~~this Section 1.07~~ compliance with such ratio, test or basket, such ratio, test or basket shall be deemed to have been complied with. For the avoidance of doubt, if CGI Borrower has made an LCT Election and any of the ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would have failed to have been satisfied as a result of fluctuations in any ~~classification under GAAP~~ such ratio, test or basket, including due to fluctuations in Consolidated EBITDA or Consolidated Total Assets of CGI Borrower or the Person subject to such Limited Condition Transaction, at any ~~Person~~time other than the LCT Test Date at or prior (as applicable) to the consummation of the relevant transaction or action, ~~business~~such baskets, ~~assets~~ tests or operations in respect of which a definitive agreement for the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall ratios will not be ~~excluded~~ deemed to have failed to have been satisfied as a result of such fluctuations. If CGI Borrower has made an LCT Election for any ~~purposes hereunder) until such Disposition shall have been consummated. (g) Any determination of Total Assets shall be made by reference to~~ Limited Condition Transaction, then in connection with any event or transaction occurring after the ~~last day of the~~ relevant LCT Test ~~Period most recently ended on or~~ Date and prior to the ~~relevant~~ earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or date for redemption, repurchase, defeasance, satisfaction and discharge or repayment specified in an irrevocable notice for such Limited Condition Transaction is terminated, expires or passes, as applicable, without consummation of ~~determination~~such Limited Condition Transaction (a “Subsequent Transaction”) in connection with which a ratio, test or basket availability calculation must be made on a Pro Forma Basis or giving Pro Forma Effect to such Subsequent Transaction, for purposes of determining whether such ratio, test or basket availability has been complied with under this Agreement, any such ratio, test or basket shall be required to be satisfied 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 until such time as the applicable Limited Condition Transaction has actually closed or the definitive agreement with respect thereto has been terminated.

Appears in 2 contracts

Samples: Credit Agreement (Canada Goose Holdings Inc.), Credit Agreement (Canada Goose Holdings Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Total Leverage Ratio ~~(or similar ratio~~on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in ~~which~~ accordance with GAAP) and operational changes, in each case with respect to a business, a company, a segment, an operating division or unit or line of business that the Borrower, or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such ~~incurrence~~Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, ~~assumption~~acquisitions, ~~guarantee~~Dispositions, ~~issuance~~mergers, ~~redemption~~amalgamations and consolidations and operational changes (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, ~~repurchase~~subject to any limitations set forth in clause (a)(J) of the definition thereof, ~~repayment, retirement or extinguishment of Indebtedness will be given effect, as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation and operational changes, in each case with respect to a business, a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation and operational changes had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable cost-savings, operating expense reductions, restructuring charges and expense and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within twelve (12) months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) ~~If any Indebtedness bears a floating rate~~ For purposes 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~~ Ratio, any amount in a currency other than Dollars will be converted to ~~such Indebtedness). Interest on~~ Dollars in a ~~Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined~~ manner consistent with that used by ~~a Financial Officer of~~ the Borrower ~~to be the rate of interest implicit in such Capitalized Lease Obligation~~ when preparing its financial statements 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 2 contracts

Samples: Credit Agreement (Halyard Health, Inc.), Credit Agreement (Halyard Health, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, ~~financial ratios and tests, including~~ the ~~Senior Net~~ Total Leverage Ratio, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage~~ Interest Coverage Ratio and ~~the Fixed Charge Coverage Ratio~~ Consolidated EBITDA shall be calculated in the manner prescribed by this Section 1.07; provided that, notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07, when calculating the Senior Net Leverage Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section 2.03(b)(i), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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)Section. (b) For purposes of calculating ~~any financial ratio or test (or~~ the Total ~~Assets)~~Leverage Ratio, the Interest Coverage Ratio and Consolidated EBITDA, 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)~~ completed by Borrower or any of its Restricted Subsidiaries during ~~the applicable Test Period or (ii) subsequent to such Test Period~~ any four consecutive fiscal quarter period, and prior to or simultaneously with the event ~~for~~ with respect to which the calculation of any such ratio is ~~made~~ being 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)~~four quarter period. If since the beginning of any ~~applicable Test Period~~ such four quarter period any ~~Person~~ 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~~ period shall have ~~made~~ completed any Specified Transaction that would have required adjustment pursuant to this ~~Section 1.07~~Section, then the Total Leverage Ratio and the Interest Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such Specified Transaction occurred at the beginning of the applicable period of four consecutive fiscal quarters. Notwithstanding the foregoing, at the election of Borrower, such pro forma adjustment shall not be required to be determined for any acquired entity or business to the extent the aggregate consideration or other amount paid in connection with such Specified Transaction is less than $5,000,000. (c) Notwithstanding anything to the contrary herein, with respect to any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that does not require compliance with a financial ratio (any such amounts, the “Fixed Amounts”) substantially concurrently with any amounts incurred or transactions entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio (including Section 7.13 hereof, any Total Leverage Ratio or the 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 any substantially concurrent utilization of the Incurrence-Based Amounts. (d) For purposes of determining the permissibility of any action, change, transaction or event that requires a calculation of any financial ratio or test (including any leverage ratio or Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section 1.07. (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 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) 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 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 thereofConsolidated EBITDA), whether through a pro forma adjustment or otherwise, with respect to such period. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 at the time such action is taken, such change is made, such transaction is consummated or such event occurs (or at such other time elected by Borrower in accordance with Section 1.6(f) below), as the case may be, and no default or event of default shall be deemed to have occurred solely as a result of a change in such financial ratio or test occurring after the time such action is taken, such change is made, such transaction is consummated or such event occurs (or at such time elected by Borrower in accordance with Section 1.6(f) below), as the case may be. (e) Notwithstanding anything in this Agreement or any other Loan Document to the contrary, to the extent that this Agreement or any other Loan Document requires (i) compliance with any financial ratio or test (including the financial maintenance covenant set forth in Section 7.13), (ii) accuracy of representations and warranties (other than Specified Representations), (iii) the absence of a Default (or any type of Default) or (iv) testing availability under baskets set forth herein (including compliance with any cap expressed as a percentage of Consolidated EBITDA), in each case, as a condition to the consummation of any transaction in connection with any Acquisition or similar investment, the determination of whether the relevant condition is satisfied may be made, at the election of Borrower, at the time of the execution of the definitive agreement with respect to the relevant acquisition or investment, after giving effect to the acquisition or investment and any related Indebtedness and Liens on a pro forma basis. If Borrower makes any such election to determine whether the relevant condition is satisfied at the times set forth in the foregoing sentence, for purposes of calculating the availability under any basket hereunder in connection with any action or transaction following such time and prior to the earlier of the date on which such acquisition or other investment, as applicable, is consummated or the date that the definitive agreement is terminated, expires or passes, as applicable, without consummation thereof, any such basket shall be determined or tested giving pro forma effect to such ~~incurrence, issuance, repayment~~ acquisition or ~~redemption~~ other and any actions or transactions related thereto (including the incurrence of Indebtedness, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 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 Indebtednessconnection therewith). 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate.744209099 20664705 (f) ~~Notwithstanding anything to the contrary in~~ For purpose of this Section ~~1.07~~ 1.6, “Specified Transaction” shall mean any acquisition or ~~in any classification under GAAP of any Person~~other investment, ~~business~~disposition or other specified transaction (including, ~~assets or operations in respect of which a definitive agreement~~ for the ~~Disposition thereof has been entered into as discontinued operations~~avoidance of doubt, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or acquisitions occurring prior to the ~~relevant date of determination~~Closing Date), restructurings, cost savings initiatives and other similar initiatives.

Appears in 1 contract

Samples: Credit Agreement (AssetMark Financial Holdings, Inc.)

Pro Forma and Other Calculations. ~~(a)~~ Notwithstanding anything to the contrary herein, financial ratios and tests, including the Senior Net Leverage Ratio, the Secured Net Leverage Ratio, the Consolidated 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 (b), (c), (d) or (e) of this Section 1.07, when calculating the Senior Net Leverage Ratio for purposes of determining compliance with any test or covenant contained in this Agreement, “pro forma” or “pro forma basis” means, as to any calculation of the ratio of Consolidated Net Secured Debt to Consolidated EBITDAX, the ratio of Consolidated Net Debt to Consolidated EBITDAX, the ratio of Consolidated EBITDAX to Consolidated Net Cash Interest Expense or the Current Ratio (~~i) the definition of “Applicable Rate,” and (ii) Section 2.03(b)(i~~including component definitions thereof), ~~the~~ for any events as described ~~in this Section 1.07~~ below that ~~occurred~~ occur 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 2.03(a) during any fiscal year (without duplication~~ commencement of any ~~prepayments in such~~ period of four consecutive fiscal ~~year that reduced~~ quarters (the ~~amount of Excess Cash Flow required to be repaid pursuant to Section 2.03(b)(i~~“Reference Period”) for ~~any prior fiscal year) shall be given~~ which the financial effect of such events is being calculated, and giving effect to the events for which such calculation is being made, such calculation as will give pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (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 1.07) 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~~ events as if such events occurred as 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~~ Reference Period (or, in the case of ~~Total Assets~~Current Ratio, as of the last day of such Reference Period) and that: (i) in making any determination on a pro forma basis, (x) all Debt (including Debt issued, incurred or assumed as a result of, or to finance, any relevant transactions and for which the financial effect is being calculated, whether incurred under this Agreement or otherwise, but excluding normal fluctuations in revolving Debt incurred for working capital purposes) issued, incurred, assumed or permanently repaid during the Reference Period (or, unless otherwise specified, occurring during the Reference Period or thereafter and through and including the date of determination, if applicable) shall be deemed to have been issued, incurred, assumed or permanently repaid at the beginning of such period, (y) interest charges attributable to interest on any Debt, for which pro forma effect is being given as provided in preceding clause (x), bearing floating interest rates shall be computed on a pro forma basis as if the rate that is or would be in effect with respect to such Indebtedness as at the relevant date of determination would have been in effect during the period for which pro forma effect is being given and (z) the acquisition or disposition of any assets included in calculating Current Ratio shall be deemed to have occurred as of the last day of the applicable ~~Test~~ Reference Period~~). If since the beginning~~ , and (ii) any designation of ~~any applicable Test Period any Person that subsequently became~~ an Unrestricted Subsidiary as a Restricted ~~Subsidiary or was merged~~Subsidiary, ~~amalgamated or consolidated with or into the Borrower or any Restricted Subsidiary since the beginning of such Test Period~~ effect 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. (c) Whenever pro forma effect is to be given to such designation and all other designations of Unrestricted Subsidiaries as Restricted Subsidiaries after the first day of the relevant Reference Period and on or prior to the date of the then applicable designation of an Unrestricted Subsidiary as a ~~Specified Transaction~~Restricted Subsidiary, collectively. Notwithstanding anything to the contrary contained herein, all pro forma calculations shall be ~~made~~ in ~~good faith by a Financial Officer of the Borrower~~ all respects, acceptable to, and ~~may include, for the avoidance of doubt~~approved by, 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) 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 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 periodAdministrative Agent. ~~(d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~1.4 Amendment to Section 3.04(c), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Credit Agreement (Chaparral Energy, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests (including measurements of Consolidated Total Assets or Consolidated EBITDA, ~~including~~ the ~~Senior Net~~ First Lien Secured Leverage Ratio, the Senior Secured ~~Net Leverage Ratio, the Consolidated Net~~ Leverage Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Leverage Ratio) shall be calculated in the manner prescribed by this Section ~~1.07~~1.09; provided that, notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.09, when calculating the ~~Senior Net~~ First Lien Secured Leverage Ratio and, if each where applicable, the Total Leverage Ratio for purposes of ~~(i)~~ calculating the ~~definition of “Applicable Rate,” and (ii)~~ Financial Maintenance Covenant in Section ~~2.03(b)(i)~~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 that voluntary prepayments made pursuant to Section 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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~~basis or requires pro forma compliance, 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 Test Period most recently ended ~~Test Period~~ for which ~~internal~~ financial statements have been delivered pursuant to Section 5.01(a) or 5.01(b) (or, prior to the delivery of any such financial statements, the most recent period of four consecutive fiscal quarters of the Borrower ~~are available (as determined~~ included in ~~good faith by~~ the ~~Borrower~~Latest Financial Statements). (b) For purposes of calculating any financial ratio or test (including Consolidated Total Assets or ~~Total Assets~~Consolidated EBITDA), Specified Transactions (with any incurrence or ~~repayment~~ Refinancing of any Indebtedness in connection therewith to be subject to clause (d) of this Section ~~1.07~~1.09) 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 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~~Assets or Unrestricted Cash and Cash Equivalents, on the last day of the applicable Test Period). If If, since the beginning of any applicable Test ~~Period~~ 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~~1.09, then such financial ratio or test (or including Consolidated Total ~~Assets~~Assets and Consolidated EBITDA) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.09. (c) Whenever pro forma effect is to be given or a determination of pro forma compliance or on a pro forma basis is to made (or words to similar effect) with respect to a Specified ~~Transaction~~Transaction or a Specified Restructuring, the pro forma calculations shall be made in good faith by ~~a Financial~~ an Authorized Officer of the Borrower and may include, for the avoidance of doubt, ~~the amount of~~ pro forma adjustments related to such Specified Transaction or Specified Restructuring, including pro forma “~~run-~~run rate” cost savings, operating expense reductions and ~~synergies~~ other synergies, in each case projected by the Borrower in good faith to result from ~~or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect~~ actions 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 which are expected to be taken (in each case, in the good faith determination of the Borrower) (calculated on a pro forma basis as though such “run rate” cost savings, operating expense reductions and other synergies had been realized on the first day of such period and as if such “run rate” cost savings, operating expense reductions and other synergies were realized during the entirety of such period and “~~run-~~run rate” means the full recurring benefit for a period that is associated with any ~~action taken~~such action), 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) in each case 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~~ substantial steps with respect to ~~which substantial steps~~ such action have been taken or such actions are expected to be taken no later than ~~twelve (12) months~~ six fiscal quarters after the date of consummation of such Specified Transaction ~~and~~ or the date of initiation of such Specified Restructuring, (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~~ and (D) the aggregate amount of any such pro forma increase added to Consolidated EBITDA pursuant to this clause (c) and pursuant to clause (a)(x)(A) of the definition of “Consolidated EBITDA” for any Test Period (other than any such adjustments related to the Transactions or included in any other provision in this Agreement) shall not exceed an amount equal to 20.0% of Consolidated EBITDA for such Test Period (calculated without giving effect to such ~~period.~~add-backs); (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or ~~guarantees), issues~~ guarantee) or ~~repays~~ Refinances (including by redemption, repurchase, repayment, 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)~~Indebtedness, 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~~ incurrence or ~~redemption~~ Refinancing of ~~Indebtedness~~Indebtedness (including pro forma effect to the application of the net proceeds therefrom), in each case ~~to the extent required,~~ as if the same had occurred on the last day of the applicable Test ~~Period (except~~ Period; provided that, with respect to any incurrence of Indebtedness permitted by the provisions of this Agreement in reliance on the ~~case~~ pro forma calculation of the ~~Fixed Charge Coverage~~ First Lien Secured Leverage Ratio, the Senior Secured Leverage Ratio or the Total Leverage Ratio, as applicable (each, a “Ratio Incurrence”), such calculation shall not give pro forma effect to any Indebtedness being incurred (or ~~similar ratio)~~expected to be incurred) substantially simultaneously or contemporaneously with such Ratio Incurrence in reliance on any “basket” set forth in this Agreement (including the Incremental Base Amount, ~~in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement~~ and any “baskets” measured as a percentage of Consolidated Total Assets or ~~extinguishment of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period~~Consolidated EBITDA). (e) ~~If any Indebtedness bears a floating rate of interest and is being given~~ Whenever pro forma ~~effect~~effect is to be given to a pro forma event, the ~~interest on such Indebtedness~~ pro forma calculations shall be ~~calculated as if the rate~~ made in ~~effect on the date~~ good faith by an Authorized Officer of the ~~event for which the~~ Borrower. Any such pro forma calculation (1) may include, without limitation, (1) all adjustments of the ~~Fixed Charge Coverage Ratio is made had been~~ type described in clause (a) and (b) of the ~~applicable rate for~~ definition of “Consolidated EBITDA” to the ~~entire period (taking into account any interest hedging arrangements~~ extent such adjustments, without duplication, continue to be applicable to such ~~Indebtedness). Interest on a Capitalized Lease Obligation~~ Test Period, and (2) 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~~ include, without limitation, all adjustments calculated 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 Regulation S-X under the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateSecurities Act. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Credit Agreement (Costar Group Inc)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.08 (other than for the purpose of determining Pro Forma Compliance with Section 7.08), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that the Borrower, ~~redemption~~or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~repurchase~~acquisitions, ~~repayment~~Dispositions, ~~retirement or extinguishment~~ mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated Adjusted EBITDA resulting therefrom, subject to any limitations set forth in clause (a)(x) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period). (ed) 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. For purposes of making the ~~computations~~ computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no whenever pro forma effect ~~shall~~ is to be given to ~~any discontinued operations (and~~ a transaction, the 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. (g) Any determination of Total Assets pro forma calculations shall be made in good faith by ~~reference~~ a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within 18 months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(x) of the definition of Consolidated Adjusted EBITDA, to the ~~last day of the Test Period most recently ended on or prior~~ extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the ~~relevant date~~ extent duplicative of ~~determination~~any amounts that are otherwise added back in computing Consolidated Adjusted EBITDA with respect to such period.

Appears in 1 contract

Samples: Credit Agreement (Meredith Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio, the~~ Consolidated Secured ~~Net Leverage Ratio, the Consolidated Net Leverage~~ Debt Ratio and the Fixed Charge Coverage ~~Ratio~~ Ratio, shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating the ~~Senior Net Leverage~~ Consolidated Secured Debt Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining pro forma compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For~~ In the event that the Borrower or any of its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than, for purposes of calculating Consolidated EBITDA only, Indebtedness incurred under any ~~financial ratio~~ revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or ~~test (~~issues or ~~Total Assets), Specified Transactions (with any incurrence~~ redeems Disqualified Stock or ~~repayment~~ Preferred Stock subsequent to the commencement 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 for which the Consolidated Secured Debt Ratio or ~~(ii) subsequent to such Test Period and~~ the Fixed Charge Coverage Ratio, as applicable, is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such~~ the applicable ratio is made (the “Ratio Calculation Date”), then the applicable ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable Test Period; provided, however, that, for purposes of any pro forma calculation of the Fixed Charge Coverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such ~~Specified Transactions~~ Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (and the change in any ~~increase or decrease in EBITDA~~ associated fixed charge obligations and the ~~component financial definitions used therein attributable to any Specified Transaction~~change in Consolidated EBITDA resulting therefrom) 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~~ such Test Period any Person that subsequently became a Restricted Subsidiary or was ~~merged, amalgamated or consolidated~~ merged with or into the Borrower or any of its Restricted ~~Subsidiary~~ Subsidiaries since the beginning of such Test Period shall have made any ~~Specified Transaction~~ Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section ~~1.07~~1.08, then ~~such financial~~ the applicable ratio ~~or test (or Total Assets)~~ shall be calculated ~~to give~~ giving pro forma effect thereto ~~in accordance with this Section 1.07~~for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (cd) ~~Whenever~~ For purposes of making the computation referred to above, whenever pro forma effect is to be given to a ~~Specified Transaction~~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 responsible financial 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 accounting officer 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 ~~date of the event for which the calculation of the Fixed Charge Coverage~~ Ratio ~~is made~~ Calculation Date had been the applicable rate for the entire ~~period~~ Test Period (taking into account any ~~interest hedging arrangements~~ Hedging Obligations 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~~ responsible financial or accounting 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. For purposes of making the ~~computations~~ computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable ~~period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor~~ Test Period except as set forth in clause (b) of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummated1. ~~(g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.~~

Appears in 1 contract

Samples: Credit Agreement (Activision Blizzard, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests (including measurements of Consolidated Total Assets or Consolidated EBITDA), including the ~~Senior Net~~ Consolidated Leverage Ratio or the Consolidated Interest Coverage Ratio, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.09; provided that, notwithstanding anything to the contrary in clauses (b), (c~~), (d~~) or (ed) of this Section ~~1.07~~1.09, when calculating the ~~Senior Net~~ Consolidated Leverage Ratio for purposes of ~~(i)~~ the definition of “Applicable Rate,” and ~~(ii)~~ Section ~~2.03(b)(i)~~7.11, the events described in this Section ~~1.07~~ 1.09 that occurred subsequent to the end of the applicable ~~Test~~ Measurement Period shall not be given pro forma effect; provided however that voluntary prepayments made pursuant to Section 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due but shall not be given pro forma effect thereafter. In addition, subject to Section 1.08, whenever a financial ratio or test is to be calculated on a pro forma ~~basis~~basis or requires pro forma compliance, the reference to “~~Test~~ Measurement 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~~ Measurement Period for which ~~internal~~ financial statements ~~of the Borrower are available (as determined in good faith by the Borrower~~have been delivered pursuant to Section 4.01 or Section 6.01(a) or 6.01(b). (b) For purposes of calculating any financial ratio or test (including Consolidated Total Assets or ~~Total Assets~~Consolidated EBITDA), Specified Transactions (with any incurrence or ~~repayment~~ Refinancing of any Indebtedness in connection therewith to be subject to clause (d) of this Section ~~1.07~~1.09) that have been made (i) during the applicable ~~Test~~ Measurement Period or (ii) subsequent to such ~~Test~~ Measurement 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~~ Measurement Period (or, in the case of Consolidated Total ~~Assets~~Assets or “unrestricted” cash and Cash Equivalents, on the last day of the applicable ~~Test~~ Measurement Period). If If, since the beginning of any applicable ~~Test Period~~ Measurement 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~~ Measurement Period shall have made any Specified Transaction that would have required adjustment pursuant to this Section ~~1.07~~1.09, then such financial ratio or test (or including Consolidated Total ~~Assets~~Assets and Consolidated EBITDA) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.09. (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 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) 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 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. (d) In the event that the Borrower or any ~~Restricted~~ Subsidiary incurs (including by assumption or ~~guarantees), issues~~ guarantee) or ~~repays~~ Refinances (including by redemption, repurchase, repayment, 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)~~Indebtedness, in each case included in the calculations of any financial ratio or test, (i) during the applicable ~~Test~~ Measurement Period or (ii) subsequent to the end of the applicable ~~Test~~ Measurement 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~~ incurrence or ~~redemption~~ Refinancing of ~~Indebtedness~~Indebtedness (including pro forma effect to the application of the net proceeds therefrom), in each case to the extent required, as if the same had occurred on the last day of the applicable ~~Test~~ Measurement Period (except in the case of the ~~Fixed Charge~~ Consolidated Interest Coverage Ratio (or similar ratio), in which case such ~~incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement~~ incurrence or ~~extinguishment~~ Refinancing of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable ~~Test~~ Measurement Period); provided that, with respect to any incurrence of Indebtedness, creation of Lien, Investment or Restricted Payment permitted by the provisions of this Agreement in reliance on the pro forma calculation of the Consolidated Leverage Ratio and/or the Consolidated Interest Coverage Ratio, as applicable, pro forma effect shall not be given to any Indebtedness being incurred, Lien created or Investment or Restricted Payment made (or expected to be incurred, created or made) substantially simultaneously or contemporaneously with the incurrence of any such Indebtedness, creation of such Lien or making of such Investment or Restricted Payment, as applicable, in reliance on any “basket” set forth in this Agreement (including any “baskets” measured as a percentage of Consolidated Total Assets or Consolidated EBITDA) including any Credit Extension under the Revolving Credit Facility or, except to the extent expressly required to be calculated otherwise in Section 2.14, in respect of any Incremental Commitment. (ed) Whenever pro forma effect is to be given to a pro forma event, the pro forma calculations shall be made in good faith by a Responsible Officer of the Borrower. 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~~ Consolidated Interest Coverage Ratio is made had been the applicable rate for the entire period (taking into account any interest ~~hedging arrangements~~ Swap Contracts applicable to such Indebtedness). To the extent interest expense generated by Swap Obligations that have been terminated is included in Consolidated Interest Charges prior to the date of the event for which the calculation of the Consolidated Interest Coverage Ratio is being made, Consolidated Interest Charges shall be adjusted to exclude such expense. Interest on a Capitalized Lease ~~Obligation~~ shall be deemed to accrue at an interest rate reasonably determined by a ~~Financial~~ Responsible 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, period or, if ~~none~~lower, ~~then based upon~~ the maximum commitments under such ~~optional rate chosen~~ revolving credit facility as of the ~~Borrower~~ date of the event for which the calculation of the Consolidated Interest Coverage Ratio is being made, except as set forth in Section 1.09(c). (e) Any such pro forma calculation may ~~designate~~include, without limitation, adjustments calculated in accordance with Regulation S-X under the Securities Act of 1933, as amended. (f) ~~Notwithstanding anything~~ For purposes of determining compliance at any time with Sections 2.14(a), 7.01, 7.02, 7.03, 7.05 and 7.06, in the event that any Indebtedness, Lien, Disposition, Restricted Payment, prepayment, redemption, purchase, defeasance or other satisfaction of Junior Financings and/or Investment, as applicable, meets the criteria of more than one of the categories of transactions or items permitted pursuant to any clause of such Sections 2.14(a), 7.01 (other than Section 7.01(a)), 7.02 (other than Section 7.02(c)), 7.03, 7.05 and 7.06, the ~~contrary~~ Borrower, in ~~this Section 1.07~~ its sole discretion, may, from time to time, divide, classify and/or reclassify such transaction or item (or portion thereof) among any combination of one or more categories and will be required to include the amount and type of such transaction (or portion thereof) only in any ~~classification under GAAP~~ one category at any time. For the avoidance of doubt, it is understood and agreed that any ~~Person~~Indebtedness, ~~business~~Lien, ~~assets~~ Disposition, Restricted Payment, prepayment, redemption, purchase, defeasance or ~~operations in respect~~ other satisfaction of which a definitive agreement for the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall Junior Financings and/or Investment need not be ~~excluded for any purposes hereunder) until such Disposition shall have been consummated. (g) Any determination of Total Assets shall be made~~ permitted solely by reference to one category of permitted Indebtedness, Lien, Disposition, Restricted Payment, prepayment, redemption, purchase, defeasance or other satisfaction of Junior Financings and/or Investment under Sections 2.14(a), 7.01, 7.02, 7.03, 7.05 and 7.06, respectively, but may instead be permitted in part under any combination thereof. In addition, with respect to any amount incurred or transaction entered into (or consummated) in reliance on a provision of this Agreement that does not require compliance with a financial ratio or test (including, without limitation, Section 2.14(a)(A)) (any such amount, a “Fixed Amount”) substantially concurrently with, or prior to, any amount incurred or transaction entered into (or consummated) in reliance on a provision of this Agreement that requires compliance with a financial ratio or test (including, without limitation, Section 2.14(a)(B), any Interest Coverage Ratio test and/or any Consolidated Leverage Ratio test) (any such amount, an “Incurrence-Based Amount”), it is understood and agreed that the ~~last day~~ Borrower may select that amounts incurred or transactions entered into (or consummated) be incurred or entered into (or consummated) in reliance on one or more of any Incurrence-Based Amount and/or Fixed Amount in its sole discretion; provided that, unless the Borrower elects otherwise, each such amount or transaction will be deemed incurred, entered into or consummated first under any Incurrence-Based Amount to the maximum extent permitted thereunder. In addition, any Indebtedness, Lien, Restricted Payment, prepayment, redemption, purchase, defeasance or other satisfaction of Junior Financings and/or Investment incurred or made in reliance on any Fixed Amount (including Section 2.14(a)(A)) will automatically be reclassified as having been incurred in reliance on any applicable Incurrence-Based Amount of the ~~Test Period~~ same negative covenant (including Section 2.14(a)(B)) if the Borrower satisfies the relevant ratio or test applicable to such Incurrence-Based Amount at any time on a pro forma basis for the most recently ~~ended~~ completed Measurement Period after the incurrence in reliance on ~~or prior to~~ the relevant ~~date of determination~~Fixed Amount.

Appears in 1 contract

Samples: Credit Agreement (Nu Skin Enterprises, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test Period; provided, however, that, for purposes of any pro forma calculation of the Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower, or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to any limitation set forth in clause (z) to the ~~Fixed Charge Coverage Ratio~~ proviso to clause (~~or similar ratio)~~a)(J) of the definition of Consolidated EBITDA, ~~in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, Acquisition, Disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, Acquisition, Disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within eighteen (18) months after the date of any Acquisition, amalgamation or merger (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to the limitation set forth in clause (z) to the proviso to clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) Notwithstanding anything in this Agreement or any Loan Document to the ~~contrary~~ contrary, when calculating any applicable ratio or determining other compliance with this Agreement (including the determination of compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom) in ~~this Section 1.07 or~~ connection with a Specified Transaction undertaken in ~~any classification under GAAP~~ connection with the consummation of a Limited Condition Acquisition and the incurrence of any ~~Person~~Indebtedness (and use of the proceeds thereof) in connection therewith, ~~business~~the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, ~~assets~~ is continuing or ~~operations~~ would result therefrom or the date of determination of such other applicable covenant shall, at the option of the Borrower (the Borrower’s election to exercise such option in ~~respect of which a~~ connection with any Limited Condition Acquisition, an “LCA Election”), be deemed to be the date the definitive ~~agreement~~ agreements for ~~the Disposition thereof has been~~ such Limited Condition Acquisition are entered into ~~as discontinued operations~~(the “LCA Test Date”) and if, no after such ratios and other provisions are measured on a pro forma basis after giving effect to such Limited Condition Acquisition and the other Specified Transactions to be entered into in connection therewith (including any incurrence of Indebtedness (including any Incremental Facility) and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive fiscal quarter period being used to calculate such financial ratio ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such provisions shall be ~~given~~ deemed to ~~any discontinued operations (~~have been complied with. For the avoidance of doubt, if and after the ~~EBITDA attributable to any such Person, business, assets or operations shall not be excluded~~ Borrower has made an LCA Election for any ~~purposes hereunder~~Limited Condition Acquisition, (x) ~~until~~ if any of such ~~Disposition shall have been consummated.~~ ratios are exceeded as a result of fluctuations in such ratio (gincluding due to fluctuations in Consolidated EBITDA) ~~Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on~~ 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 and any related Specified Transaction and/or incurrence of Indebtedness in connection therewith are permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related Specified Transactions. If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio (specifically excluding the determination of the Applicable Rate and the financial covenant set forth in Section 7.09) 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 ~~determination~~such Limited Condition Acquisition, any such ratio or basket shall be calculated (I) 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) have been consummated and (II) on a pro forma basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof).

Appears in 1 contract

Samples: Credit Agreement (Entercom Communications Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ First Lien Net Leverage Ratio, the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the ~~Fixed Charge~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that, ~~notwithstanding~~ not-withstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (i) the definition of “Applicable Rate,” ~~and~~ (ii) Section ~~2.03(b)(i~~2.05(b)(i) and (iii) 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 ~~2.03(a~~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 ~~2.03(b)(i~~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 such prepayment pursuant to Section ~~2.03(b)(i~~2.05(b)(i) is due 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 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). (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 1.07) 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 ~~the~~ 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. (c) 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. (d) 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~~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~~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 ~~twelve~~ twenty-four (1224) 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. (de) In the event that ~~the~~ Holdings, a Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Syndicated Facility Agreement (DTZ Jersey Holdings LTD)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ Fixed Charge Coverage Ratio, the First Lien Net Leverage Ratio, the Secured Net Leverage ~~Ratio, the Consolidated Net Leverage~~ Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Net Leverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.05; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.05, (x) when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (i) determining the ~~definition of~~ “Applicable ~~Rate,~~Margin” and “Commitment Fee” with respect to the Revolving Loans, (ii) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant) and (iii) Section ~~2.03(b)(i~~2.10(f), in each case, the events described in this Section ~~1.07~~ 1.05 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 2.03(a~~effect and (y) ~~during any fiscal year~~ when calculating Consolidated EBITDA solely for purposes of clause (~~without duplication~~ b) of ~~any prepayments in such fiscal year that reduced~~ the ~~amount~~ definition of ~~Excess Cash Flow required to be repaid pursuant to Section 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect~~ Cumulative Amount, Specified Transactions occurring after ~~such fiscal year-end and prior to~~ the ~~time such prepayment pursuant to Section 2.03(b)(i) is due but~~ Amendment No. 4 Effective Date 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)effect. (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.05) that have been made (i) during the applicable Test Period or (ii) other than as described in the proviso to clause (a) above, subsequent to such Test Period and prior to or ~~simultaneously~~ concurrently with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA or Consolidated Total Assets, 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 the Restricted ~~Subsidiary~~ 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~~1.05, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.05. (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 ~~Financial~~ 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 resulting from or relating to such Specified Transaction that are reasonably identifiable and factually supportable and projected by ~~the~~ Borrower in good faith to be realized as a result ~~from or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect~~ of actions 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~~ judgment of ~~the~~ Borrower) no later than twenty four (24) months after the date of such Specified Transactions (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 such that “run-rate” means the full recurring benefit for a period that is associated with any ~~action taken, committed to be~~ actions that have been 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; 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 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) or excluded in calculating Consolidated Net Income (or any component thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (d) In the event that ~~the~~ (x) Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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~~ in the ordinary course of business for working capital purposes; provided that the proceeds of any such Indebtedness ~~has been permanently repaid and~~ shall not ~~replaced), in each case included in the calculations~~ be netted for any concurrent calculation of ~~any~~ a financial ratio or ~~test~~test that determines whether such Indebtedness can be incurred) or (y) Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or ~~simultaneously~~ concurrently 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, 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, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 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 (x) the rate actually ~~chosen~~used, in the case of Indebtedness incurred prior to the applicable Specified Transaction or ~~if none, then based upon~~ (y) such optional rate actually chosen ~~as the~~ by Borrower or any such applicable Restricted ~~Subsidiary may designate. For purposes~~ Subsidiary, in the case of ~~making~~ Indebtedness incurred in connection with the ~~computations referred~~ applicable Specified Transaction. (f) Solely for the purpose of (i) measuring the relevant ratios and baskets with respect to ~~above, interest on~~ the incurrence of any Indebtedness ~~under a revolving credit facility computed on a pro forma basis~~ (including any Incremental Facilities) or Liens or the making of any Investment, Permitted Acquisition or other acquisition, Dividends, prepayment of Junior Indebtedness, Dispositions or fundamental changes or the designation of any Restricted Subsidiaries or Unrestricted Subsidiaries or (ii) determining compliance with representations and warranties (other than with respect to the incurrence of any Incremental Facilities, which compliance shall be ~~computed based upon~~ determined as required in Section 2.19(a)(iii)) in connection with a Limited Condition Acquisition, if Borrower has made an LCA Election with respect to such Limited Condition Acquisition, the ~~average daily balance~~ date of determination of whether any such action is permitted hereunder shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”), and, if after giving Pro Forma Effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith as if they had occurred at the beginning of the most recent Test Period ending prior to the LCA Test Date (or, in the case of any incurrence or repayment of Indebtedness ~~during~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio)), as if incurred (or repaid, as applicable) on the last day of the applicable ~~period. Interest~~ Test Period), Borrower could have taken such action on ~~Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime~~ the relevant LCA Test Date in compliance with such ratio, basket, representation or ~~similar rate~~warranty, ~~a eurocurrency interbank offered rate~~such ratio, basket, representation or ~~other rate,~~ warranty shall be deemed to have been ~~based upon~~ complied with. For the ~~rate actually chosen~~avoidance of doubt, or(i) if, ~~if none~~following the LCA 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 Acquisition, such ratios and other provisions will not be deemed to have been failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition and related transactions are 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 Borrower subsequently elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Acquisition and related transactions are consummated. If Borrower has made an LCA Election for any Limited Condition Acquisition, then ~~based upon such optional rate chosen as~~ in connection with any subsequent calculation of any ratio or basket on or following the ~~Borrower may designate. (f) Notwithstanding anything~~ relevant LCA Test Date and prior to the ~~contrary in this Section 1.07~~ earlier of (i) the date on which such Limited Condition Acquisition is consummated or ~~in any classification under GAAP of any Person, business, assets or operations in respect of which a~~ (ii) 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 ~~Disposition thereof~~ use of proceeds thereof) have been consummated until such time as the applicable Limited Condition Acquisition has actually closed or the definitive agreement with respect thereto has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummatedterminated. (g) ~~Any determination~~ For the avoidance of ~~Total Assets shall be made by reference to the last day~~ doubt, none of the ~~Test Period most recently ended on~~ Agents or ~~prior~~ any agents thereof shall have any duty to calculate or verify the ~~relevant date of determination~~Borrower’s calculations with respect to any financial ratios or tests, including without limitation those referred to in this Section 1.05.

Appears in 1 contract

Samples: First Lien Credit Agreement (SolarWinds Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio, the~~ Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the ~~Fixed Charge~~ Interest Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided that, ~~notwithstanding~~ not-withstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section 1.07, when calculating the ~~Senior~~ Secured Net Leverage Ratio for purposes of ~~(i) the definition of “Applicable Rate,” and (ii)~~ Section 2.03(b)(i), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (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 1.07) 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 ~~the~~ 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. (c) 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. (d) 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~~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~~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 ~~twelve~~ twenty-four (1224) 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. (de) In the event that ~~the~~ Holdings, a Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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~~ Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period). (ef) 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~~ 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 or Finance Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a Financial Officer of the Borrower Representative to be the rate of interest implicit in such Capitalized or Finance 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 Representative or Holdings or the applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (fg) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (gh) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Syndicated Facility Agreement (DTZ Jersey Holdings LTD)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ Consolidated Total Net ~~Leverage~~ Debt Ratio, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in ~~clauses~~ clause (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating the ~~Senior~~ Consolidated Total Net ~~Leverage~~ Debt Ratio for purposes of Section 7.04 (i) other than for the ~~definition~~ purpose of ~~“Applicable Rate,” and (ii)~~ determining pro forma compliance with Section ~~2.03(b)(i~~7.04), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For~~ In the event that the Borrower or any of its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or extinguishes any Indebtedness (other than, for purposes of calculating Consolidated EBITDA only, Indebtedness incurred under any ~~financial ratio~~ revolving credit facility unless such Indebtedness has been permanently repaid and has not been replaced) or ~~test (~~issues or ~~Total Assets), Specified Transactions (with any incurrence~~ redeems Disqualified Stock or ~~repayment~~ Preferred Stock subsequent to the commencement 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~~ for which the Consolidated Total Net Debt Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such~~ the applicable ratio is made (the “Ratio Calculation Date”), then the applicable ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable Test Period. (c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such ~~Specified Transactions~~ Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (and the change in any ~~increase or decrease in EBITDA~~ associated fixed charge obligations and the ~~component financial definitions used therein attributable to any Specified Transaction~~change in Consolidated EBITDA resulting therefrom) 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~~ such Test Period any Person that subsequently became a Restricted Subsidiary or was ~~merged, amalgamated or consolidated~~ merged with or into the Borrower or any of its Restricted ~~Subsidiary~~ Subsidiaries since the beginning of such Test Period shall have made any ~~Specified Transaction~~ Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section ~~1.07~~1.08, then ~~such financial~~ the applicable ratio ~~or test (or Total Assets)~~ shall be calculated ~~to give~~ giving pro forma effect thereto ~~in accordance with this Section 1.07~~for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (cd) ~~Whenever~~ For purposes of making the computation referred to above, whenever pro forma effect is to be given to a ~~Specified Transaction~~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 responsible financial 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 accounting officer 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 ~~date of the event for which the calculation of the Fixed Charge Coverage~~ Ratio ~~is made~~ Calculation Date had been the applicable rate for the entire ~~period~~ Test Period (taking into account any ~~interest hedging arrangements~~ Hedging Obligations 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~~ responsible financial or accounting 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. For purposes of making the ~~computations~~ computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable ~~period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor~~ Test Period except as set forth in clause (b) of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummated1. ~~(g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.~~

Appears in 1 contract

Samples: Credit Agreement (Activision Blizzard, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and ~~tests~~tests (including measurements of Consolidated Total Assets, ~~including~~ Consolidated Cash EBITDA, Liquidity or Consolidated EBITDA and the ~~Senior~~ Total Net Leverage Ratio, the ~~Secured~~ Total Net Cash Leverage Ratio, the ~~Consolidated Net Leverage Ratio and the Fixed Charge~~ Contract Asset Balance Coverage Ratio or the LTV Ratio), shall be calculated in the manner prescribed by this Section ~~1.07~~1.11; provided that, notwithstanding anything to the contrary in clauses (ba), (c~~), (d~~) or (ed) of this Section ~~1.07~~1.11, (i) when calculating the ~~Senior~~ Total Net Leverage Ratio for purposes of of, as applicable, (iA) ~~the definition of “Applicable Rate,”~~ [reserved], (B) [reserved] and (C) Section 6.13 and (ii) when calculating the Total Net Cash Leverage Ratio for purposes of Section ~~2.03(b)(i~~2.11(d), in each case, 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~~ provided, however, that ~~voluntary~~ (i) for purposes of calculating the ECF Percentage, Consolidated Total Net Debt shall be determined after giving pro forma effect to the Permitted ECF Recalculation Considerations assuming such prepayments had been made on the last day of such fiscal year and (ii) in connection with the calculation of the Total Net Cash Leverage Ratio pursuant to Section ~~2.03(a~~6.13, (A) ~~during any fiscal year (without duplication of any prepayments in such fiscal year that reduced~~ Consolidated Total Net Debt for the ~~amount of Excess Cash Flow required to be repaid pursuant to Section 2.03(b)(i) for any prior fiscal year)~~ Test Period ending on March 31, 2024 shall be ~~given pro forma~~ calculated to give effect ~~after~~ to the April TL Prepayment so long as such ~~fiscal year-end and~~ payment is actually made on or prior to April 12, 2024 and (B) Consolidated Total Net Debt for the ~~time~~ Test Period ending on September 30, 2024 shall be calculated to give effect to the October TL Prepayment so long as such ~~prepayment pursuant~~ payment is actually made on or prior to ~~Section 2.03(b)(i) is due but shall not be given pro forma effect thereafter~~October 15, 2024. In addition, whenever a financial ratio or test is to be calculated on a pro forma ~~basis~~basis or requires pro forma compliance, 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 Test Period most recently ended ~~Test Period~~ for which ~~internal~~ financial statements ~~of the Borrower are available~~ have been (~~as determined in good faith by the Borrower~~or were required to have been) delivered pursuant to Section 5.01(a) or (b). (b) For purposes of calculating any financial ratio or test (or including Consolidated Total Assets, Consolidated Cash EBITDA or Consolidated EBITDA), Specified Transactions (with any incurrence or ~~repayment~~ Refinancing of any Indebtedness in connection therewith to be subject to clause (d) of this Section ~~1.07~~1.11) 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 Consolidated EBITDA, Consolidated Cash 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~~Assets or “unrestricted” cash and Cash Equivalents, on the last day of the applicable Test Period). If If, since the beginning of any applicable Test ~~Period~~ 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.with (c) Whenever pro forma effect or a determination of pro forma compliance is to be given to a Specified ~~Transaction~~Transaction or a Specified Restructuring, the pro forma calculations shall be made in good faith by a ~~Financial~~ Responsible Officer of ~~the Borrower~~ Holdings and may include, for the avoidance of doubt, the amount of “~~run-~~run rate” cost savings, operating expense reductions and cost synergies and other synergies projected by ~~the Borrower~~ Holdings in good faith to result from or relating to any Specified Transaction (including the Transactions) ~~which~~ or Specified Restructuring that is being given pro forma effect or for which a determination of pro forma compliance is being made 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~~ reductions, cost synergies ~~are taken~~or other synergies have been taken or initiated, have been committed to be taken or initiated, with respect to which substantial steps have been taken or initiated or which are expected to be taken or initiated (in the good faith determination of the Borrower) (calculated on a pro forma basis as though such cost savings, operating expense ~~reductions~~ reductions, cost synergies and other synergies had been realized on the first day of such period and as if such cost savings, operating expense ~~reductions~~ reductions, cost synergies and other synergies were realized during the entirety of such period and “~~run-~~run rate” means the full recurring benefit for a period that is associated with any action taken, any action committed to be ~~taken or~~ taken, any action with respect to which substantial steps have been taken or ~~are~~ initiated or any action that is expected to be taken (including any savings expected to result from the elimination of ~~a public target’s compliance costs with public company requirements~~Public Company Costs) 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~~Transaction or Specified Restructuring, and any such adjustments included in the initial pro forma calculations shall continue to apply to subsequent calculations of such financial ratios or tests, including during any subsequent Test Periods in which the effects thereof are expected to be realizable; provided that (Ai) such amounts are reasonably identifiable and factually supportable in the good faith judgment of ~~the Borrower~~Holdings, (Bii) such actions are taken, such actions are committed to be ~~taken or~~ taken, substantial steps with respect to ~~which substantial steps~~ such action have been taken or initiated or such actions are expected to be taken no later than ~~twelve~~ (12I) ~~months~~ during the Suspension Period, four fiscal quarters and (II) after the Suspension Period has ended, six fiscal quarters, in each case, after the date of consummation of such Specified Transaction ~~and~~ or the date of initiation of such Specified Restructuring, (Ciii) no amounts shall be added to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA or Consolidated Cash EBITDA (or any other components thereof), whether through a pro forma adjustment or otherwise, with respect to such ~~period.~~period and (iv) the aggregate amount of any such pro forma increase added to Consolidated EBITDA pursuant to this clause (iv), when combined, without duplication, with amounts added to Consolidated EBITDA pursuant to clauses (a)(xv), (a)(xvi) and (b)(1) of the definition of “Consolidated EBITDA” and amounts excluded pursuant to clause (a) of the definition of “Consolidated Net Income” shall not exceed (x) for purpose of any calculation of Consolidated EBITDA under this Agreement, an amount equal to 20.0% of Consolidated EBITDA for such Test Period (calculated prior to giving effect to such add-backs) and (y) for purposes of any calculation of Consolidated Cash EBITDA under (d) In the event that Holdings, the Borrower or any Restricted Subsidiary incurs (including by assumption or ~~guarantees), issues~~ guarantee) or ~~repays~~ Refinances (including by redemption, repurchase, repayment, 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)~~Indebtedness, 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~~ incurrence or ~~redemption~~ Refinancing of ~~Indebtedness~~Indebtedness (including pro forma effect to the application of the net proceeds therefrom), in each case to the extent required, as if the same had occurred on the last day of the applicable Test ~~Period (except~~ Period; provided that, with respect to any Incurrence of Indebtedness pursuant to Section 6.01(a) in reliance on the ~~case~~ pro forma calculation of the ~~Fixed Charge Coverage~~ Total Net Cash Leverage Ratio (a “Ratio Incurrence”) such calculation shall not give pro forma effect to any Indebtedness being incurred (or ~~similar ratio),~~ expected to be incurred) substantially simultaneously or contemporaneously with such Ratio Incurrence in ~~which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred~~ reliance on ~~the first day~~ any “basket” set forth in Section 6.01(a) (including clause (a) of the ~~applicable Test Period~~definition of “Incremental Cap” and any “baskets” measured as a percentage of Consolidated Total Assets, Consolidated Cash EBITDA or Consolidated EBITDA and including any Borrowing of up to $15,000,000 under the Revolving Credit Facility or issuance of any Letter of Credit, except to the extent expressly required to be calculated otherwise in Section 2.20, Section 6.01(a)(xxiii) or any Replacement Revolving Facility). (e) ~~If any Indebtedness bears a floating rate of interest and is being given~~ Any such pro forma ~~effect~~shall include, ~~the interest on such Indebtedness shall be~~ without limitation, all adjustments 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 Regulation S-X under the rate actually chosen, or if none, then based upon such optional rate chosen as the Borrower or applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateSecurities Act. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Credit Agreement (GoHealth, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated 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 (b), (c), (d) or (e) of this Section 1.07, when calculating the Senior Net Leverage Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section 2.03(b)(i), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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)1.08. (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test Period; provided, however, that, for purposes of any pro forma calculation of the Consolidated Net Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower, or any of its Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, Acquisitions, Dispositions, mergers, amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to any limitation set forth in clause (z) to the ~~Fixed Charge Coverage Ratio~~ proviso to clause (~~or similar ratio~~a)(J) of the definition of Consolidated EBITDA, to the extent applicable)~~, in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same~~ ) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Subsidiary or was merged with or into the Borrower or any of its Subsidiaries since the beginning of such Test Period shall have made any Investment, Acquisition, Disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, Acquisition, Disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable operating expense reductions and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within eighteen (18) months after the date of any Acquisition, amalgamation or merger (and, in the case of any pro forma calculation of Consolidated EBITDA, subject only to the limitation set forth in clause (z) to the proviso to clause (a)(J) of the definition of Consolidated EBITDA, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) If For purposes of calculation of any ~~Indebtedness bears~~ Ratio, any amount in a ~~floating~~ currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate ~~of interest and is being given pro forma effect,~~ for such currency for the ~~interest on such Indebtedness shall be calculated as if the rate in effect on~~ most recent twelve (12) month period immediately prior to the date of ~~the event~~ determination determined in a manner consistent with that used in calculating Consolidated EBITDA 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designateTest Period. (f) Notwithstanding anything in this Agreement or any Loan Document to the ~~contrary~~ contrary, when calculating any applicable ratio or determining other compliance with this Agreement (including the determination of compliance with any provision of this Agreement which requires that no Default or Event of Default has occurred, is continuing or would result therefrom) in ~~this Section 1.07 or~~ connection with a Specified Transaction undertaken in ~~any classification under GAAP~~ connection with the consummation of a Limited Condition Acquisition and the incurrence of any ~~Person~~Indebtedness (and use of the proceeds thereof) in connection therewith, ~~business~~the date of determination of such ratio and determination of whether any Default or Event of Default has occurred, ~~assets~~ is continuing or ~~operations~~ would result therefrom or the date of determination of such other applicable covenant shall, at the option of the Borrower (the Borrower’s election to exercise such option in ~~respect of which a~~ connection with any Limited Condition Acquisition, an “LCA Election”), be deemed to be the date the definitive ~~agreement~~ agreements for ~~the Disposition thereof has been~~ such Limited Condition Acquisition are entered into ~~as discontinued operations~~(the “LCA Test Date”) and if, no after such ratios and other provisions are measured on a pro forma basis after giving effect to such Limited Condition Acquisition and the other Specified Transactions to be entered into in connection therewith (including any incurrence of Indebtedness (including any Incremental Facility) and the use of proceeds thereof) as if they occurred at the beginning of the four consecutive fiscal quarter period being used to calculate such financial ratio ending prior to the LCA Test Date, the Borrower could have taken such action on the relevant LCA Test Date in compliance with such ratios and provisions, such provisions shall be ~~given~~ deemed to ~~any discontinued operations (~~have been complied with. For the avoidance of doubt, if and after the ~~EBITDA attributable to any such Person, business, assets or operations shall not be excluded~~ Borrower has made an LCA Election for any ~~purposes hereunder~~Limited Condition Acquisition, (x) ~~until~~ if any of such ~~Disposition shall have been consummated.~~ ratios are exceeded as a result of fluctuations in such ratio (gincluding due to fluctuations in Consolidated EBITDA) ~~Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on~~ 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 and any related Specified Transaction and/or incurrence of Indebtedness in connection therewith are permitted hereunder and (y) such ratios and other provisions shall not be tested at the time of consummation of such Limited Condition Acquisition or related Specified Transactions. 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 ~~determination~~such Limited Condition Acquisition, any such ratio or basket shall be calculated (I) 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) have been consummated and (II) on a pro forma basis but without giving effect to such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence of Indebtedness and the use of proceeds thereof).

Appears in 1 contract

Samples: Credit Agreement (Audacy, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio, the Secured Net Leverage Ratio, the Consolidated~~ First Lien Net Leverage Ratio and the ~~Fixed Charge Coverage~~ Total Net Leverage Ratio shall be calculated in the manner prescribed by this Section ~~1.07~~1.06; provided ~~that,~~ that notwithstanding anything to the contrary in ~~clauses~~ subsections (b), (c), (d) or (e) of this Section ~~1.07~~1.06, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of ~~(i)~~ the ~~definition of~~ “~~Applicable Rate,” and (ii) Section 2.03(b)(i)~~Required Percentage”, the events described in this Section ~~1.07~~ 1.06 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating any financial ratio or test (or EBITDA or Consolidated Total Assets), Specified Transactions (~~with any~~ and, subject to clause (d) below, the incurrence or repayment of any Indebtedness in connection ~~therewith to be subject to clause (d) of this Section 1.07~~therewith) 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 Consolidated Total Assets, on the last day of the applicable Test Period). If since the beginning of any applicable Test Period any ~~Person~~ 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~~1.06, then such financial ratio or test (or EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.06. (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 Financial Officer of the Borrower and may include, for the avoidance of doubt, the amount of “run-rate” cost savings, operating expense ~~reductions~~ reductions, synergies (other than revenue synergies) and ~~synergies~~ operating improvements projected by the Borrower in good faith to result from or relating to any Specified Transaction (~~including~~ including, for the ~~Transactions~~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~~ reductions, synergies and ~~synergies~~ operating improvements 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~~ reductions, synergies and ~~synergies~~ operating improvements had been realized on the first day of such period and as if such cost savings, operating expense ~~reductions~~ reductions, synergies and ~~synergies~~ operating improvements 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~~ following the ~~elimination of a public target’s compliance costs with public company requirements)~~ 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 (Ai) such amounts are reasonably identifiable and factually supportable in the good faith judgment of the ~~Borrower~~Borrower and certified by a Financial Officer of the Borrower in an officer’s certificate, (Bii) 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)~~ 12 months after the date of such Specified Transaction ~~and~~ (Cor such actions are undertaken or implemented prior to the consummation of such Specified Transaction), (iii) 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~~period and (iv) the aggregate amount of such “run-rate” cost savings, synergies, operating expense reductions and operating improvements increasing EBITDA pursuant to this Section 1.06(c) in any Test Period, together with the amount of any “run-rate” cost savings, synergies, operating expense reductions and operating improvements added back to EBITDA for such Test Period pursuant to clause (k) of the definition thereof, shall not exceed 25% of EBITDA, calculated prior to giving effect to all such add-backs, adjustments and increases, for such Test Period on a pro forma basis. (d) In the event that the Borrower or any ~~Restricted~~ Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment) any Indebtedness (other than Indebtedness incurred or repaid under any revolving credit facility or line of credit for working capital purposes unless such Indebtedness has been permanently repaid and not replaced), 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, in each case to the extent required, as if the same had occurred on the last day of the applicable Test ~~Period (except in~~ Period; provided, however, that at the ~~case~~ election of the ~~Fixed Charge Coverage Ratio (or similar ratio)~~Borrower, the pro forma calculation will not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described in which case such incurrence, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness will be given effect, as if the same had occurred on the first day of the applicable Test Period)Section 1.07. (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 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate[Reserved]. (f) Notwithstanding anything to the contrary in this Section ~~1.07~~ 1.06 or in any classification under GAAP of any ~~Person~~person, business, assets or operations in respect of which a definitive agreement for the ~~Disposition~~ disposition thereof has been entered ~~into as discontinued operations~~into, at the election of the Borrower, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such ~~Person~~person, business, assets or operations shall not be excluded for any purposes hereunder) until such ~~Disposition~~ disposition shall have been consummated. (g) ~~Any determination~~ [Reserved]. (h) If any Lien, Indebtedness, Asset Sale (or other disposition), Investment, Restricted Payment, Voluntary Junior Prepayment or other transaction, action, judgment or amount (any of ~~Total Assets shall be made~~ the foregoing in concurrent transactions, a single transaction or a series of related transactions) is incurred, issued, taken or consummated in reliance on categories of baskets measured by reference to a percentage of EBITDA or Consolidated Total Assets, and any Lien, Indebtedness, Asset Sale (or other disposition), Investment, Restricted Payment, Voluntary Junior Prepayment or other transaction, action, judgment or amount (including in connection with refinancing thereof) would subsequently exceed the ~~last day~~ applicable percentage of EBITDA or Consolidated Total Assets if calculated based on the EBITDA or Consolidated Total Assets on a later date (including the date of any refinancing), such percentage of EBITDA or Consolidated Total Assets will be deemed not to be exceeded (so long as, in the case of refinancing any Indebtedness (and any related Lien), the principal amount of such newly incurred or issued Indebtedness does not exceed the maximum principal amount in respect of the Indebtedness being refinanced, extended, replaced, refunded, renewed or defeased (plus an amount equal to unpaid accrued interest, fees and premium (including tender premium) and penalties (if any) thereon, upfront fees and original issue discount and other reasonable and customary fees and expenses incurred or paid in connection with such refinancing and any existing commitment unutilized and letters of credit undrawn thereunder)). (i) Notwithstanding anything in this Agreement or any Loan Document to the contrary, when (i) calculating any applicable ratio, Consolidated Net Income, EBITDA, Consolidated Total Assets or availability under any basket in connection with the incurrence of Indebtedness, the creation of Liens, the making of any Asset Sale (or other disposition), the making of an Investment, the making of a Restricted Payment, Voluntary Junior Prepayment, the designation of a subsidiary as a Subsidiary or an Unrestricted Subsidiary, the repayment of Indebtedness or any other actions or transactions, (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 creation of Liens, the making of any Asset Sale (or other disposition), the making of an Investment, the making of a Restricted Payment, Voluntary Junior Prepayment, the designation of a subsidiary as a Subsidiary or an Unrestricted Subsidiary, the repayment of Indebtedness or any other actions or transactions, 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,” which LCA 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 any such other Limited Condition Acquisition are entered into (such applicable date, the “LCA Test ~~Period most recently ended~~ Date”). (ii) If, after giving pro forma effect to the Limited Condition Acquisition, any Indebtedness or other transaction in connection therewith and any actions or transactions related thereto and any related pro forma adjustments, the Borrower or any of its Subsidiaries would have been permitted to take such actions or consummate such transactions on the relevant LCA Test Date in compliance with such ratio, test, basket or other provisions (and any related requirements and conditions), such ratio, test, basket or other provisions (and any related requirements and conditions) shall be deemed to have been complied with (or satisfied) for all purposes. (iii) For the avoidance of doubt, (i) if, following the LCA Test Date, any of such ratios, tests, baskets or other provisions are breached as a result of fluctuations in such ratio (including due to fluctuations in EBITDA, Consolidated Total Assets or other components of such ratio), test, basket or other provisions at or prior to the consummation of the relevant Limited Condition Acquisitions, such ratios, tests, baskets and other provisions will not be deemed to have failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition is permitted hereunder and (ii) subject to Section 1.06(i)(v) below, such ratios, tests, baskets and compliance with such conditions shall not be tested at the time of consummation of such Limited Condition Acquisition or related transactions. (iv) If the Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of any ratio, test, basket availability or compliance with any other provision hereunder on or following the relevant LCA Test Date and prior to the earliest of the date on which such Limited Condition Acquisition is consummated, the date that the definitive agreement for such Limited Condition Acquisition is terminated or expires without consummation of such Limited Condition Acquisition or the date the Borrower makes an election pursuant to the immediately preceding sentence, any such ratio, test, basket or compliance with any other provision hereunder shall be calculated on a pro forma basis assuming such Limited Condition Acquisition and other transactions in connection therewith (including any incurrence or issuance of Indebtedness and the use of proceeds thereof) had been consummated on the LCA Test Date. (v) Notwithstanding anything in this Agreement or any Loan Document to the contrary, (i) the Borrower at any time may elect, in its sole discretion, to rescind any LCA Election, in which case the relevant ratios, tests and baskets shall be recalculated, and compliance with the relevant conditions shall be determined, at the time of consummation of the applicable Limited Condition Acquisition as if such LCA Election had never been made and (ii) if financial statements for one or more subsequent fiscal quarters after the making of an LCA Election shall have been delivered, the Borrower may elect, in its sole discretion, to redetermine the applicable ratio, Consolidated Net Income, EBITDA or Consolidated Total Assets on the basis of such financial statements, in which case, such date of ~~determination~~redetermination shall thereafter be deemed to be the applicable LCA Test Date.

Appears in 1 contract

Samples: Credit Agreement (TravelCenters of America Inc. /MD/)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), or (d~~) or (e~~) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that Parent or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, repays, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent to ~~be subject to clause (d) of this Section 1.07) that have been made (i) during~~ the ~~applicable~~ Test Period or for which any Ratio is being calculated (~~ii)~~ or, prior to the delivery of financial statements pursuant to Section 6.01, subsequent to ~~such Test Period and~~ the Closing Date) but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Total Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that Parent or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~redemption~~acquisitions, ~~repurchase~~dispositions, ~~repayment~~mergers, ~~retirement or extinguishment~~ amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (subject to any limitations set forth in clause (a)(I) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation or consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger, amalgamation or consolidation (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred at the beginning of the applicable Test Period). (ed) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. 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~~ Calculation Date had been the applicable rate for the entire ~~period~~ Test Period (taking into account any ~~interest hedging arrangements~~ Hedging Obligations applicable to such Indebtedness); provided that in the case of repayment of any Indebtedness to the extent actual interest related thereto was included during all or any portion of the applicable Test Period, the actual interest may be used for the applicable portion of such Test Period and to give pro forma effect to such repayment. 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.interest

Appears in 1 contract

Samples: Credit Agreement (Uniti Group Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this ~~Section 1.07~~‎Section 1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b‎(b), (c‎(c), ~~(d)~~ or (e‎(d) of this ~~Section 1.07~~‎Section 1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (~~i) the~~ i)the definition of “Applicable Rate,” and (~~ii) Section 2.03(b)(i~~ii)‎Section 7.09 (other than for the purpose of determining Pro Forma Compliance with ‎Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that Parent or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, repays, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent to ~~be subject to clause (d) of this Section 1.07) that have been made (i) during~~ the ~~applicable~~ Test Period or for which any Ratio is being calculated (~~ii)~~ or, prior to the delivery of financial statements pursuant to Section 6.01, subsequent to ~~such Test Period and~~ the Closing Date) but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Total Leverage Ratio on such determination date pursuant to the provisions described in ‎Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that Parent or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~redemption~~acquisitions, ~~repurchase~~dispositions, ~~repayment~~mergers, ~~retirement or extinguishment~~ amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (subject to any limitations set forth in clause (a)(I) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation or consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this ‎Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger, amalgamation or consolidation (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred at the beginning of the applicable Test Period). (ed) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. 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~~ Calculation Date had been the applicable rate for the entire ~~period~~ Test Period (taking into account any ~~interest hedging arrangements~~ Hedging Obligations applicable to such Indebtedness); provided that in the case of repayment of any Indebtedness to the extent actual interest related thereto was included during all or any portion of the applicable Test Period, the actual interest may be used for the applicable portion of such Test Period and to give pro forma effect to such repayment. Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a ~~Financial~~ Responsible Officer of ~~the Borrower~~ Parent 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. For purposes of making the ~~computations~~ computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable ~~period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor~~ Test Period except as set forth in clause (b) of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummated1. ~~(g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.~~

Appears in 1 contract

Samples: Credit Agreement (Uniti Group Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage~~ Interest Coverage Ratio, the ~~Secured Net Leverage Ratio, the Consolidated~~ First Lien Net Leverage Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Net Leverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.12; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.12, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (i) determining the ~~definition of~~ “Applicable ~~Rate,~~Margin” and “Commitment Fee Rate” with respect to the Revolving Credit Loans, (ii) Section ~~2.03(b)(i~~10.11 (other than for the purpose of determining pro forma compliance with Section 10.11) and (iii) Section 5.2(a)(ii), in each case, the events described in this Section ~~1.07~~ 1.12 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.12) that have been made (i) during the applicable Test Period or (ii) other than as described in the 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 or Consolidated Total Assets, 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 the Restricted ~~Subsidiary~~ 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~~1.12, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.12. (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 Financial~~ an Authorized 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 such Specified Transaction projected by the Borrower 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~~ as a result of 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 such that “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~~ for 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; 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 substantial steps with respect to ~~which substantial steps have been taken~~ such actions are or are expected to be taken no later than ~~twelve~~ twenty-four (1224) months after the date of such Specified ~~Transaction~~ 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. (d) In the event that (w) the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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 each case included~~ in the ~~calculations~~ ordinary course of business for working capital purposes) or (x) the Borrower or any ~~financial ratio~~ Restricted Subsidiary issues, repurchases or ~~test~~redeems Disqualified 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, 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~~ Interest Coverage Ratio (or similar ratio), in which case such incurrence, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 date of the event for which the calculation of the ~~Fixed Charge~~ 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~~ an Authorized 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 any applicable Restricted Subsidiary may designate. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) ~~Notwithstanding anything to~~ In connection with any action being taken in connection with a Limited Condition Transaction, for purposes of: (i) determining compliance with any provision of this Agreement which requires the ~~contrary~~ calculation of any financial ratio or test, including the First Lien Net Leverage Ratio, the Interest Coverage Ratio and the Total Net Leverage Ratio; or (ii) testing availability under baskets set forth in this ~~Section 1.07~~ Agreement (including baskets measured as a percentage of Consolidated EBITDA or Consolidated Total Assets); in each case, at the option of the Borrower (the Borrower’s election to exercise such option in connection with any ~~classification under GAAP~~ Limited Condition Transaction, an “LCT Election”), the date of determination of whether any ~~Person, business, assets or operations in respect of which a~~ such action is permitted hereunder shall be deemed to be the date the definitive agreement for ~~the Disposition thereof has been~~ such Limited Condition Transaction is entered into ~~as discontinued operations~~(the “LCT Test Date”), ~~no pro forma effect~~ and if, after giving Pro Forma Effect to the Limited Condition Transaction, the Borrower or any of its Restricted Subsidiaries would have been permitted to take such action on the relevant LCT Test Date in compliance with such ratio, test or basket, such ratio, test or basket shall be ~~given~~ deemed to have been complied with. For the avoidance of doubt, if the Borrower has made an LCT Election and any ~~discontinued operations (and~~ of the ~~EBITDA attributable~~ ratios, tests or baskets for which compliance was determined or tested as of the LCT Test Date would have failed to have been satisfied as a result of fluctuations in any such ~~Person~~ratio, ~~business~~test or basket, ~~assets~~ including due to fluctuations in Consolidated EBITDA or ~~operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummated. (g) Any determination of~~ Consolidated Total ~~Assets shall be made by reference to the last day of the Test Period most recently ended on~~ Assets, at or prior to the consummation of the relevant transaction or action, such baskets, tests or ratios will not be deemed to have failed to have been satisfied as a result of such fluctuations. If the Borrower has made an LCT Election for any Limited Condition Transaction, then in connection with any event or transaction occurring after the relevant LCT Test Date and prior to the earlier of the date on which such Limited Condition Transaction is consummated or the date that the definitive agreement or date for redemption, repurchase, defeasance, satisfaction and discharge or repayment specified in an irrevocable notice for such Limited Condition Transaction is terminated, expires or passes, as applicable, without consummation of ~~determination~~such Limited Condition Transaction (a “Subsequent Transaction”) in connection with which a ratio, test or basket availability calculation must be made on a Pro Forma Basis or giving Pro Forma Effect to such Subsequent Transaction, for purposes of determining whether such ratio, test or basket availability has been complied with under this Agreement, any such ratio, test or basket shall be required to be satisfied on a Pro Forma Basis (i) assuming such Limited Condition Transaction and other transactions in connection therewith have been consummated and (ii) assuming such Limited Condition Transaction and other transactions in connection therewith have not been consummated.

Appears in 1 contract

Samples: Credit Agreement (Blue Coat, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in ~~clauses~~ clause (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that the Borrower or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent 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~~ for which any Ratio is being calculated but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Total Leverage Ratio ~~(or similar ratio~~on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (c) For purposes of making the computation referred to above, Investments, acquisitions, Dispositions, mergers, amalgamations and consolidations (as determined in ~~which~~ accordance with GAAP) and operational changes, in each case with respect to a business, a company, a segment, an operating division or unit or line of business that the Borrower, or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such ~~incurrence~~Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis assuming that all such Investments, ~~assumption~~acquisitions, ~~guarantee~~Dispositions, ~~issuance~~mergers, ~~redemption~~amalgamations and consolidations and operational changes (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom, ~~repurchase~~subject to any limitations set forth in clause (a)(J) of the definition thereof, ~~repayment, retirement or extinguishment of Indebtedness will be given effect, as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Borrower or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation and consolidation and operational changes, in each case with respect to a business, a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger and consolidation and operational changes had occurred at the beginning of the applicable Test Period. (d) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower. Any such pro forma calculation may include adjustments appropriate, in the reasonable determination of the Borrower as set forth in an officer’s certificate, to reflect reasonably identifiable and factually supportable cost-savings, operating expense reductions, restructuring charges and expense and other operating improvements or synergies reasonably expected to result from any action taken or expected to be taken within twelve (12) months after the date of any acquisition, amalgamation or merger (subject to any limitations set forth in clause (a)(J) of the definition of “Consolidated EBITDA”, to the extent applicable); provided, that no such amounts shall be included pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing Consolidated EBITDA with respect to such period. (e) ~~If any Indebtedness bears a floating rate~~ For purposes 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~~ Ratio, any amount in a currency other than Dollars will be converted to ~~such Indebtedness). Interest on~~ Dollars in a ~~Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined~~ manner consistent with that used by ~~a Financial Officer of~~ the Borrower ~~to be the rate of interest implicit in such Capitalized Lease Obligation~~ when preparing its financial statements 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.

Appears in 1 contract

Samples: Credit Agreement (Avanos Medical, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio~~Ratios, ~~the Secured Net Leverage Ratio, the Consolidated Net Leverage Ratio and the Fixed Charge Coverage Ratio~~ shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), or (d~~) or (e~~) of this Section ~~1.07~~1.08, when calculating ~~the Senior Net Leverage~~ any Ratio for purposes of (i) the definition of “Applicable Rate,” and (ii) Section ~~2.03(b)(i~~7.09 (other than for the purpose of determining Pro Forma Compliance with Section 7.09), 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) ~~For purposes~~ In the event that Parent or any of ~~calculating any financial ratio~~ its Restricted Subsidiaries incurs, assumes, guarantees, repays, redeems, retires or ~~test (or Total Assets), Specified Transactions (with any incurrence or repayment of~~ extinguishes any Indebtedness ~~in connection therewith~~ or issues or redeems Disqualified Stock or Preferred Stock subsequent to ~~be subject to clause (d) of this Section 1.07) that have been made (i) during~~ the ~~applicable~~ Test Period or for which any Ratio is being calculated (~~ii)~~ or, prior to the delivery of financial statements pursuant to Section 6.01, subsequent to ~~such Test Period and~~ the Closing Date) but prior to or simultaneously with the event for which the calculation of ~~any such ratio~~ the applicable 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~~ “Ratio Calculation Date”), then 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. (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 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) 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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 Ratio shall be calculated giving pro forma effect to such incurrence, ~~issuance~~assumption, ~~repayment~~ guarantee, redemption, retirement or extinguishment of Indebtedness, or such issuance or redemption of ~~Indebtedness, in each case to the extent required~~Disqualified Stock or Preferred Stock, as if the same had occurred on the last day of the applicable Test ~~Period (except in the case~~ Period; provided, however, that, for purposes of any pro forma calculation of the ~~Fixed Charge Coverage~~ Consolidated Total Leverage Ratio on such determination date pursuant to the provisions described in Section 7.02(a), the pro forma calculation shall not give effect to any Indebtedness incurred on such determination date pursuant to the provisions described under Section 7.02(b). (~~or similar ratio~~c) For purposes of making the computation referred to above, Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (as determined in accordance with GAAP), in ~~which~~ each case with respect to a business (as such ~~incurrence~~term is used in Regulation S-X Rule 11-01 under the Securities Act), ~~assumption~~a company, ~~guarantee~~a segment, ~~issuance~~an operating division or unit or line of business that Parent or any of its Restricted Subsidiaries has determined to make and/or made during the Test Period or subsequent to such Test Period and on or prior to or simultaneously with the Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such Investments, ~~redemption~~acquisitions, ~~repurchase~~dispositions, ~~repayment~~mergers, ~~retirement or extinguishment~~ amalgamations and consolidations (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom (subject to any limitations set forth in clause (a)(I) of ~~Indebtedness will be given effect~~the definition thereof, ~~as if~~ to the ~~same~~ extent applicable) had occurred on the first day of the Test Period. If since the beginning of such Test Period any Person that subsequently became a Restricted Subsidiary or was merged with or into Parent or any of its Restricted Subsidiaries since the beginning of such Test Period shall have made any Investment, acquisition, disposition, merger, amalgamation or consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section 1.08, then the applicable Ratio shall be calculated giving pro forma effect thereto for such Test Period as if such Investment, acquisition, disposition, merger, amalgamation or consolidation (and the change in any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred at the beginning of the applicable Test Period). (ed) For purposes of making the computation referred to above, whenever pro forma effect is to be given to a transaction, the pro forma calculations shall be made in good faith by a responsible financial or accounting officer of Parent. 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~~ Calculation Date had been the applicable rate for the entire ~~period~~ Test Period (taking into account any ~~interest hedging arrangements~~ Hedging Obligations applicable to such Indebtedness)~~. Interest on a Capitalized Lease Obligation shall be deemed~~ ; provided that in the case of repayment of any Indebtedness to ~~accrue at an~~ the extent actual interest ~~rate reasonably determined by a Financial Officer~~ related thereto was included during all or any portion of the ~~Borrower to~~ applicable Test Period, the actual interest may 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) 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 used for the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on or prior to the relevant date of determination.the

Appears in 1 contract

Samples: Credit Agreement (Communications Sales & Leasing, Inc.)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage~~ Fixed Charge Coverage Ratio, the Secured Net Leverage ~~Ratio, the Consolidated Net Leverage~~ Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Net Leverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.05; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.05, (x) when calculating the ~~Senior~~ Secured Net Leverage Ratio for purposes of ~~(i) the definition of “Applicable Rate,” and (ii)~~ Section ~~2.03(b)(i~~2.10(f), the events described in this Section ~~1.07~~ 1.05 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 2.03(a~~effect and (y) ~~during any fiscal year~~ when calculating Consolidated EBITDA solely for purposes of clause (~~without duplication~~ b) of ~~any prepayments in such fiscal year that reduced~~ the ~~amount~~ definition of ~~Excess Cash Flow required to be repaid pursuant to Section 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect~~ Cumulative Amount, Specified Transactions occurring after ~~such fiscal year-end and prior to~~ the ~~time such prepayment pursuant to Section 2.03(b)(i) is due but~~ Closing Date 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)effect. (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.05) that have been made (i) during the applicable Test Period or (ii) other than as described in the proviso to clause (a) above, subsequent to such Test Period and prior to or ~~simultaneously~~ concurrently with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA or Consolidated Total Assets, 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 the Restricted ~~Subsidiary~~ 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~~1.05, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.05. (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 ~~Financial~~ 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 resulting from or relating to such Specified Transaction that are reasonably identifiable and factually supportable and projected by ~~the~~ Borrower in good faith to be realized as a result ~~from or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect~~ of actions 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~~ judgment of ~~the~~ Borrower) no later than twenty four (24) months after the date of such Specified Transactions (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 such that “run-rate” means the full recurring benefit for a period that is associated with any ~~action taken, committed to be~~ actions that have been 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; 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 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) or excluded in calculating Consolidated Net Income (or any component thereof), whether through a pro forma adjustment or otherwise, with respect to such period. (d) In the event that ~~the~~ (x) Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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 each case included~~ in the ~~calculations~~ ordinary course of business for working capital purposes; provided that the proceeds of any Indebtedness shall not be netted for any concurrent calculation of a financial ratio or ~~test~~test that determines whether such Indebtedness can be incurred); or (y) Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or ~~simultaneously~~ concurrently 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, 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, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 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 (x) the rate actually ~~chosen~~used, in the case of Indebtedness incurred prior to the applicable Specified Transaction or ~~if none, then based upon~~ (y) such optional rate actually chosen ~~as the~~ by Borrower or any such applicable Restricted ~~Subsidiary may designate. For purposes~~ Subsidiary, in the case of ~~making~~ Indebtedness incurred in connection with the ~~computations referred~~ applicable Specified Transaction. (f) Solely for the purpose of (i) measuring the relevant ratios and baskets with respect to ~~above, interest on~~ the incurrence of any Indebtedness ~~under a revolving credit facility computed on a pro forma basis~~ (including any Incremental Facilities) or Liens or the making of any Investment, Permitted Acquisition or other acquisition, Dividends, prepayment of Junior Indebtedness, Dispositions or fundamental changes or the designation of any Restricted Subsidiaries or Unrestricted Subsidiaries or (ii) determining compliance with representations and warranties (other than with respect to the incurrence of any Incremental Facilities, which compliance shall be ~~computed based upon~~ determined as required in Section 2.19(a)(iii)) in connection with a Limited Condition Acquisition, if Borrower has made an LCA Election with respect to such Limited Condition Acquisition, the ~~average daily balance~~ date of determination of whether any such action is permitted hereunder shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”), and, if after giving Pro Forma Effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith as if they had occurred at the beginning of the most recent Test Period ending prior to the LCA Test Date (or, in the case of any incurrence or repayment of Indebtedness ~~during~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio)), as if incurred (or repaid, as applicable) on the last day of the applicable ~~period. Interest~~ Test Period), Borrower could have taken such action on ~~Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime~~ the relevant LCA Test Date in compliance with such ratio, basket, representation or ~~similar rate~~warranty, ~~a eurocurrency interbank offered rate~~such ratio, basket, representation or ~~other rate,~~ warranty shall be deemed to have been ~~based upon~~ complied with. For the ~~rate actually chosen~~avoidance of doubt, or(i) if, ~~if none~~following the LCA 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 Acquisition, such ratios and other provisions will not be deemed to have been failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition and related transactions are 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 Borrower subsequently elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Acquisition and related transactions are consummated. If Borrower has made an LCA Election for any Limited Condition Acquisition, then ~~based upon such optional rate chosen as~~ in connection with any subsequent calculation of any ratio or basket on or following the ~~Borrower may designate. (f) Notwithstanding anything~~ relevant LCA Test Date and prior to the ~~contrary in this Section 1.07~~ earlier of (i) the date on which such Limited Condition Acquisition is consummated or ~~in any classification under GAAP of any Person, business, assets or operations in respect of which a~~ (ii) 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 ~~Disposition thereof~~ use of proceeds thereof) have been consummated until such time as the applicable Limited Condition Acquisition has actually closed or the definitive agreement with respect thereto has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the EBITDA attributable to any such Person, business, assets or operations shall not be excluded for any purposes hereunder) until such Disposition shall have been consummatedterminated. (g) ~~Any determination~~ For the avoidance of ~~Total Assets shall be made by reference to the last day~~ doubt, none of the ~~Test Period most recently ended on~~ Agents or ~~prior~~ any agents thereof shall have any duty to calculate or verify the ~~relevant date of determination~~Borrower’s calculations with respect to any financial ratios or tests, including without limitation those referred to in this Section 1.05 or Applicable Premium.

Appears in 1 contract

Samples: Second Lien Credit Agreement (SolarWinds Corp)

Pro Forma and Other Calculations. (a1) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ First Lien Net Leverage Ratio, the ~~Secured Net Leverage Ratio, the Consolidated~~ Total Net Leverage Ratio and the Fixed Charge Coverage Ratio shall be calculated in the manner prescribed by this Section 1.07; provided ~~that,~~ that notwithstanding anything to the contrary in clauses (b2), (c3), (d4), (5) or (e7) of this Section 1.07, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (ia) the definition of “Applicable Rate,” (b) Section 2.05(2)(a) and (iic) ~~Section 2.03(b)(i~~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 ~~2.03(a~~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 ~~2.03(b)(i~~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 such prepayment pursuant to Section ~~2.03(b)(i~~2.05(2)(a) is due 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)due. (b2) For purposes of calculating any financial ratio or test (or Total Assets), Specified Transactions (~~with any~~ and, subject to clause (4) below, the incurrence or repayment of any Indebtedness in connection ~~therewith to be subject to clause (d) of this Section 1.07~~therewith) that have been made (ia) during the applicable Test Period or (iib) 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~~1.07 as if such Specified Transaction had occurred at the beginning of the most recently ended Test Period. (c3) 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 ~~and synergies projected by the Borrower in good faith to result~~ resulting from or ~~relating~~ 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 (in 24) months after the ~~good faith determination~~ date of ~~the Borrower) (calculated~~ 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 (Aa) such amounts are (i) reasonably identifiable and factually supportable in the good faith judgment of the ~~Borrower,~~ Borrower and (Bii) 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~~ twenty-four (1224) months after the date of such Specified Transaction and (Cb) 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. (d4) 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 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, ~~assumption~~issuance, ~~guarantee~~repayment or redemption of Indebtedness, issuance, ~~redemption~~repurchase or redemption of Disqualified Stock or Preferred Stock, ~~repurchase~~or establishment or elimination of any Designated Revolving Commitments, ~~repayment, retirement or extinguishment of Indebtedness~~ 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 on the date of such establishment; 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(b). (e5) 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,~~ 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f6) 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~~ disposition thereof has been entered ~~into as discontinued operations~~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~~ disposition shall have been consummated. (g7) 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 1 contract

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

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior~~ Fixed Charge Coverage Ratio, the First Lien Net Leverage Ratio, the Secured Net Leverage ~~Ratio, the Consolidated Net Leverage~~ Ratio and the ~~Fixed Charge Coverage Ratio~~ Total Net Leverage Ratio, and compliance with covenants determined by reference to Consolidated EBITDA or Consolidated Total Assets, shall be calculated in the manner prescribed by this Section ~~1.07~~1.05; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses (b), (c), (d) or (e) of this Section ~~1.07~~1.05, when calculating the ~~Senior~~ First Lien Net Leverage Ratio for purposes of (i) determining the ~~definition of~~ “Applicable ~~Rate,~~Margin” and “Commitment Fee” with respect to the Revolving Loans, (ii) the Financial Covenant (other than for the purpose of determining pro forma compliance with the Financial Covenant) and (iii) Section ~~2.03(b)(i~~2.10(f), in each case, the events described in this Section ~~1.07~~ 1.05 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 2.03(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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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). (b) For purposes of calculating any financial ratio or test (or compliance with any covenant determined by reference to Consolidated EBITDA 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 ~~1.07~~1.05) that have been made (i) during the applicable Test Period or (ii) other than as described in the proviso to clause (a) above, subsequent to such Test Period and prior to or ~~simultaneously~~ concurrently with the event for which the calculation of any such ratio or test, or any such calculation of Consolidated EBITDA or Consolidated Total Assets, 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 the Restricted ~~Subsidiary~~ 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~~1.05, then such financial ratio or test (or Consolidated EBITDA or Consolidated Total Assets) shall be calculated to give pro forma effect thereto in accordance with this Section ~~1.07~~1.05. (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 ~~Financial~~ 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 resulting from or relating to such Specified Transaction that are reasonably identifiable and factually supportable and projected by ~~the~~ Borrower in good faith to be realized as a result ~~from or relating to any Specified Transaction (including the Transactions) which is being given pro forma effect~~ of actions 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~~ judgment of ~~the~~ Borrower) no later than twenty four (24) months after the date of such Specified Transactions (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 such that “run-rate” means the full recurring benefit for a period that is associated with any ~~action taken, committed to be~~ actions that have been 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~~Transaction (and in respect of any subsequent pro forma calculations in which such Specified Transaction or cost savings, operating expense reductions and synergies are given pro forma effect) and during any applicable subsequent Test Period for any subsequent calculation of such financial ratios and tests; 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 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) or excluded in calculating Consolidated Net Income (or any component thereof), whether through a pro forma adjustment or otherwise, with respect to such period; provided further that the aggregate amount added back to Consolidated EBITDA pursuant to this Section 1.05(c) with respect to “run-rate” cost savings, operating expense reductions and synergies and clauses (b)(i) and (b)(ii) of the definition of Consolidated EBITDA shall not, in the aggregate, exceed 20% of Consolidated EBITDA with respect to any Test Period (prior to giving effect to such addbacks). (d) In the event that ~~the~~ (x) Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees~~), issues~~ ) or repays (including by repurchase, redemption~~, repurchase~~, repayment, ~~retirement~~ 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~~ in the ordinary course of business for working capital purposes (solely for purposes of calculating the Total Gross Leverage Ratio, excluding any such Indebtedness ~~has been permanently repaid and not replaced~~incurred on the Closing Date)~~, in each case included in~~ ; provided that the ~~calculations~~ proceeds of any ~~financial ratio~~ such Indebtedness incurred shall not be netted for any purposes hereunder) or ~~test~~(y) Borrower or any Restricted Subsidiary issues, repurchases or redeems Disqualified Stock, (i) during the applicable Test Period or (ii) subsequent to the end of the applicable Test Period and prior to or ~~simultaneously~~ concurrently 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, assumption, guarantee, repurchase, redemption, repayment, retirement, discharge, defeasance or extinguishment of Indebtedness, or such issuance, ~~repayment~~ repurchase or redemption of ~~Indebtedness~~Disqualified Stock, 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, assumption, guarantee, ~~issuance~~repurchase, redemption, ~~repurchase,~~ repayment, ~~retirement~~ retirement, discharge, defeasance or extinguishment of Indebtedness or such issuance, repurchase or redemption of Disqualified Stock will be given ~~effect,~~ 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 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 (x) the rate actually ~~chosen~~used, in the case of Indebtedness incurred prior to the applicable Specified Transaction or ~~if none, then based upon~~ (y) such optional rate actually chosen ~~as the~~ by Borrower or any such applicable Restricted ~~Subsidiary may designate. For purposes~~ Subsidiary, in the case of ~~making~~ Indebtedness incurred in connection with the ~~computations referred~~ applicable Specified Transaction. (f) Solely for the purpose of (i) measuring the relevant ratios and baskets with respect to ~~above, interest on~~ the incurrence of any Indebtedness ~~under a revolving credit facility computed on a pro forma basis~~ (including any Incremental Facilities) or Liens or the making of any Investment, Permitted Acquisition or other acquisition, Dividends, prepayment of Junior Indebtedness, Dispositions or fundamental changes or the designation of any Restricted Subsidiaries or Unrestricted Subsidiaries or (ii) determining compliance with representations and warranties (other than with respect to the incurrence of any Incremental Facilities, which compliance shall be ~~computed based upon~~ determined as required in Section 2.19(a)(iii)) in connection with a Limited Condition Acquisition, if Borrower has made an LCA Election with respect to such Limited Condition Acquisition, the ~~average daily balance~~ date of determination of whether any such action is permitted hereunder shall be deemed to be the date the definitive agreements for such Limited Condition Acquisition are entered into (the “LCA Test Date”), and, if after giving Pro Forma Effect to the Limited Condition Acquisition and the other transactions to be entered into in connection therewith as if they had occurred at the beginning of the most recent Test Period ending prior to the LCA Test Date (or, in the case of any incurrence or repayment of Indebtedness ~~during~~ (except in the case of the Fixed Charge Coverage Ratio (or similar ratio)), as if incurred (or repaid, as applicable) on the last day of the applicable ~~period. Interest~~ Test Period), Borrower could have taken such action on ~~Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime~~ the relevant LCA Test Date in compliance with such ratio, basket, representation or ~~similar rate~~warranty, ~~a eurocurrency interbank offered rate~~such ratio, basket, representation or ~~other rate,~~ warranty shall be deemed to have been ~~based upon~~ complied with. For the ~~rate actually chosen~~avoidance of doubt, or(i) if, ~~if none~~following the LCA Test Date, ~~then based upon~~ any of such ~~optional rate chosen~~ ratios or other provisions are exceeded or breached as ~~the Borrower may designate.~~ a result of fluctuations in such ratio (fincluding due to fluctuations in Consolidated EBITDA or other components of such ratio) ~~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 as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination of Total Assets shall be made by reference to the last day of the Test Period most recently ended on 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 failed to have been satisfied as a result of such fluctuations solely for purposes of determining whether the Limited Condition Acquisition and related transactions are 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 Borrower subsequently elects, in its sole discretion, to test such ratios and compliance with such conditions on the date such Limited Condition Acquisition and related transactions are consummated. If Borrower has made an LCA Election for any Limited Condition Acquisition, then in connection with any subsequent calculation of ~~determination.~~any ratio or basket on or following the relevant LCA Test Date and prior to the earlier of (i) the date on which such Limited Condition Acquisition is consummated or (ii) 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) have been consummated until such time as the applicable Limited Condition Acquisition has actually closed or the definitive agreement with respect thereto has been terminated

Appears in 1 contract

Samples: First Lien Credit Agreement (SolarWinds Corp)

Pro Forma and Other Calculations. (a) Notwithstanding anything to the contrary herein, financial ratios and tests, including the ~~Senior Net Leverage Ratio, the~~ Consolidated Secured ~~Net Leverage~~ Debt Ratio, the Consolidated Total Net ~~Leverage~~ Debt Ratio and the Fixed Charge Coverage ~~Ratio~~ Ratio, shall be calculated in the manner prescribed by this Section ~~1.07~~1.08; ~~provided that~~provided, that notwithstanding anything to the contrary in clauses clause (b), (c), (d) or (e) of this Section ~~1.07~~1.08, when calculating the ~~Senior~~ Consolidated Secured Debt Ratio or the Consolidated Total Net ~~Leverage~~ Debt Ratio for purposes of (i) the definition of “Applicable Rate,” ~~and~~ (ii) Section 2.03(b)(i), 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 2.03(a67 1002217597 1001820109v3 (c) 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 2.03(b)(i) for any prior fiscal year) shall be given pro forma effect after such fiscal year-end and prior to the time such prepayment pursuant to Section 2.03(b)(i) is due 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 For purposes of ~~calculating such financial ratio or test shall be deemed~~ making the computation referred to ~~be a reference to~~above, Investments, acquisitions, dispositions, mergers, amalgamations and ~~shall be based on, the most recently ended Test Period for which internal financial statements of the Borrower are available~~ consolidations (as determined in ~~good faith by the Borrower). (b) For purposes of calculating any financial ratio or test (or Total Assets~~accordance with GAAP), ~~Specified Transactions~~ in each case with respect to a business (~~with~~ as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that the Borrower or any ~~incurrence or repayment~~ of ~~any Indebtedness in connection therewith~~ its Restricted Subsidiaries has determined to ~~be subject to clause (d) of this Section 1.07) that have been~~ make and/or made ~~(i)~~ during the ~~applicable~~ Test Period or ~~(ii)~~ subsequent to such Test Period and on or prior to or simultaneously with the ~~event for which the calculation of any such ratio is made~~ Ratio Calculation Date shall be calculated on a pro forma basis in accordance with GAAP (except as set forth in the last sentence of clause (d) below) assuming that all such ~~Specified Transactions~~ Investments, acquisitions, dispositions, mergers, amalgamations and consolidations (and the change in any ~~increase or decrease in EBITDA~~ associated fixed charge obligations and the ~~component financial definitions used therein attributable to any Specified Transaction~~change in Consolidated EBITDA resulting therefrom) 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~~ such Test Period any Person that subsequently became a Restricted Subsidiary or was ~~merged, amalgamated or consolidated~~ merged with or into the Borrower or any of its Restricted ~~Subsidiary~~ Subsidiaries since the beginning of such Test Period shall have made any ~~Specified Transaction~~ Investment, acquisition, disposition, merger, amalgamation and consolidation, in each case with respect to a business (as such term is used in Regulation S-X Rule 11-01 under the Securities Act), a company, a segment, an operating division or unit or line of business that would have required adjustment pursuant to this Section ~~1.07~~1.08, then ~~such financial~~ the applicable ratio ~~or test (or Total Assets)~~ shall be calculated ~~to give~~ giving pro forma effect thereto ~~in accordance with this Section 1.07~~for such Test Period as if such Investment, acquisition, disposition, merger and consolidation had occurred at the beginning of the applicable Test Period. (cd) ~~Whenever~~ For purposes of making the computation referred to above, whenever pro forma effect is to be given to a ~~Specified Transaction~~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 responsible financial 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 accounting officer 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 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. (d) In the event that the Borrower or any Restricted Subsidiary incurs (including by assumption or guarantees), issues or repays (including by redemption, repurchase, repayment, 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), 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, 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, assumption, guarantee, issuance, redemption, repurchase, repayment, retirement or extinguishment of Indebtedness 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 ~~date~~ Ratio Calculation Date had been the 68 1002217597 1001820109v3 (e) For purposes of ~~the event for which the~~ calculation of the Fixed Charge Coverage ~~Ratio is made had been~~ Ratio, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination determined in a manner consistent with that used in calculating Consolidated EBITDA for the applicable ~~rate for the entire period (taking into account any interest hedging arrangements applicable to such Indebtedness)~~Test Period. 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. For purposes of making the computations referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. 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 deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Borrower may designate. (f) ~~Notwithstanding anything~~ If any Indebtedness, Disqualified Stock or Preferred Stock is Incurred to refinance Indebtedness, Disqualified Stock or Preferred Stock initially incurred (or, to refinance Indebtedness, Disqualified Stock or Preferred Stock incurred to refinance Indebtedness, Disqualified Stock or Preferred Stock initially incurred) in reliance on any provision of Section 7.02(b) measured by reference to a percentage of Total Assets at the ~~contrary in this Section 1.07 or in any classification under GAAP~~ time of ~~any Person~~incurrence, ~~business~~and such refinancing would cause such percentage of Total Assets to be exceeded if calculated based on the Total Assets on the date of such refinancing, assets or operations in respect of which a definitive agreement for the Disposition thereof has been entered into as discontinued operations, no pro forma effect shall be given to any discontinued operations (and the 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. (g) Any determination~~ percentage of Total Assets shall not be ~~made~~ deemed to be exceeded (and such refinancing Indebtedness, Disqualified Stock or Preferred Stock shall be deemed permitted) so long as the principal amount of such refinancing Indebtedness, Disqualified Stock or Preferred Stock does not exceed an amount equal to the principal amount of such Indebtedness, Disqualified Stock or Preferred Stock being refinanced, plus the aggregate amount of fees, underwriting discounts, premiums and other costs and expenses (including accrued and unpaid interest) incurred or payable in connection with such refinancing. (g) If any Liens securing Indebtedness or other obligations are incurred to refinance Liens securing Indebtedness or other obligations initially incurred (or, to refinance Liens incurred to refinance Liens initially incurred) in reliance on a basket measured by reference to a percentage of Total Assets at the ~~last day~~ time of ~~the Test Period most recently ended on~~ incurrence of such Indebtedness or ~~prior to the relevant date of determination.~~other 69 1002217597 1001820109v3

Appears in 1 contract

Samples: Credit Agreement (Activision Blizzard, Inc.)

Common use of Pro Forma and Other Calculations Clause in Contracts