Final Credit Agreement

Question 1

• What is the point of the final credit agreement?

Answer 1

o Memorialise the commitment letter received from banks in legal language

Question 2

• What are the standard sections of a final credit agreement?

Answer 2

o	Commitments/Debt
o	Conditions Precedent (to closing financing)
o	Reps and warranties (NewCo to lenders)
o	Affirmative covenants (I will do XYZ)
o	Negative covenants (I won’t do XYZ) 
o	Events of Default

Question 3

• What is covenant cushion analysis?

Answer 3

o Project future EBITDA to see how much cushion the NewCo has over the lender covenant

Question 4

• How is EBITDA defined in Credit Agreement?

Answer 4

o It is Net Income plus various add backs