Common use of Budget Variance Clause in Contracts

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

Budget Variance. In addition Beginning on the Friday of the first full week following the Closing Date, and then no later than the Friday of each subsequent calendar week, the Issuer may deliver to any the Purchasers a proposed budget for the following 13-week period, which shall be in form and all other reporting requirements substance reasonably satisfactory to the Purchasers (it being agreed that using a form similar to the Approved Budget shall be acceptable); provided, that if the week period covered by the Approved Budget then in effect (the “Current Budget Period”) shall have elapsed without the Issuer having delivered to the Purchasers a proposed budget for the 13-week period following the Current Budget Period in accordance with the terms of this Section 8.21 that is approved by each Purchaser in its sole discretion, an immediate Event of Default shall be deemed to have occurred and continuing until waived in writing by each of the Purchasers. The Issuer shall not permit (i) the amount of its actual disbursements of the type set forth in this Agreement, commencing in the week following entry of the Final Order, Loan Parties shall prepare and deliver to Agent, no later than Wednesday of each week, a report in form satisfactory to Agent (the “Variance ReportProgram Cost of Goods Sold (COGs)”), comparing (1) Loan Parties’ actual results under the then applicable “SG&A Expenses” and “Non-Operating Expenditures/Working Capital” line items set forth in an Approved Budget for to exceed the immediately preceding week budgeted amount of such disbursements shown in an Approved Budget by more than ten percent (10%) on a line item basis, (ii) the amount of all other actual disbursements to exceed the budgeted amount of such disbursements shown in an Approved Budget by more than twenty percent (20%) on a line item basis compared to and (iii) the projections amount of all of its actual disbursements (including disbursements of the type set forth in then applicable the “Program Cost of Goods Sold (COGs)”, “SG&A Expenses” and “Non-Operating Expenditures/Working Capital” line items set forth in an Approved Budget) to exceed the budgeted amount of such disbursements shown in an Approved Budget including, in each case, without limitation, an analysis of any budget variances. The Loan Parties’ actual collections by more than ten percent (excluding actual collections of payments from the Department of Health and Human Services/Center for Medicare and Medicaid Services (“CMS”10%) that were previously subject to the administrative freeze imposed by CMS) shall not be less than 92.5% on a weekly aggregate basis (the “Deposits Permitted Variance”) of the aggregate amount of “Total Deposits” projected (excluding projected collections of payments from CMS that were previously subject to the administrative freeze imposed by CMS) in the then applicable Approved Budget over the course of the applicable Test Period (as defined herein); and the Loan Parties’ actual operating disbursements shall not be greater than 107.5% (the “Disbursements Permitted Variance” and, collectively with the Deposits Permitted Variance, the “Permitted Variances”) of the aggregate amount of “Total Operating Disbursements” projected in the then applicable Approved Budget over the course of the applicable Test Period; provided, however, that, as to the Test Period described in foregoing clause (i) of the definition of Test Period applies, the Deposits Permitted Variance shall be 85% of the aggregate amount of “Total Deposits” projected in the Approved Budget over the course of such Test Period. “Test Period” shall mean (i) as to the Variance Report due to be delivered on December 12, 2018, the period from December 1, 2018, through and including December 8, 2018), (ii) as and (iii), collectively, the “Budget Variance”). The Issuer shall also deliver with each proposed budget a variance report reflecting on a line item and an aggregate basis, the Issuer’s actual unrestricted cash receipts and cash disbursements compared to the Variance Report due to be delivered on December 19, 2018, Approved Budget for such immediately preceding week and for the period from December 1, 2018, commencing on the Closing Date through and including December 15, 2018, (iii) as to the Variance Report due to be delivered on December 26, 2018, end of the period from December 1, 2018, through and including December 22, 2018, and (iv) as to each Variance Report due on or after January 2, 2019, week immediately preceding the consecutive four-week period ending on the Saturday prior to the due date of such Variance Report. Each such Variance Report shall (1) detail the variance, if any, of actual cash disbursements, actual cash receipts and actual net cash flow (for the avoidance of doubt, including all cash expenditures for operations, professional fees and otherwise) from the Approved Budget (on a weekly basis), (2) provide an explanation of any variance greater or lesser, as applicable, than the Permitted Variance, and (3) include a statement from an officer of the Administrative Borrower that to such person’s actual knowledge after due inquiry that an Event of Default has not occurredreport. For the avoidance of doubt, no variance in excess for purposes of calculating the total amount of anticipated expenditures Budget Variance, any unused amounts set forth on each of the “Debtor Professional Fees” and “Committee Professional Fees” line items on in the Approved Budget for any period of determination may be carried forward and used during subsequent periods. Each proposed budget shall be subject to review and approval by each Purchaser in its sole discretion before being deemed an Approved Budget. Upon approval of any proposed budget, the same shall constitute the Approved Budget, but until such proposed budget shall have been approved or any updated rejected, the most recent Approved Budget (subject to permitted variances) shall be permitted under this Agreement, the Final Order continue in full force and effect for purposes of determining Issuer’s compliance hereof. Each Purchaser agrees that it shall not unreasonably withhold or otherwise. Furthermore, for the avoidance of doubt, no variance in excess of the total amount of anticipated expenditures set forth on the “Critical Vendor Payments” line item on the Approved Budget or delay its consent to any updated Approved Budget shall be permitted under this Agreement, the Final Order or otherwiseproposed budget.