EBITDA Coverage Ratio Clause Samples
The EBITDA Coverage Ratio clause defines a financial covenant that requires a borrower to maintain a minimum ratio of earnings before interest, taxes, depreciation, and amortization (EBITDA) to certain fixed charges, such as interest payments or debt service obligations. In practice, this clause is used in loan agreements to ensure that the borrower generates sufficient operating income to cover its debt-related expenses, often calculated and tested on a quarterly or annual basis. Its core function is to protect lenders by providing an early warning mechanism for financial distress, thereby reducing the risk of default.
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EBITDA Coverage Ratio. EBITDA divided by Debt Service not less than 1.50 to 1.00, determined at each fiscal quarter end for the four fiscal quarters then ended; provided, however, that EBITDA divided by Debt Service may be not less than 1.25 to 1.00 as of the end of any given fiscal quarter for the four fiscal quarters then ended if both of the following conditions have been met:
(i) Borrower shall have had no greater than One Million Dollars ($1,000,000.00) outstanding in the aggregate under Line of Credit A and Line of Credit B at any time during the thirty (30) consecutive days immediately prior to the end of such fiscal quarter; and
(ii) Borrower shall have an aggregate balance outstanding under Line of Credit A and Line of Credit B of no greater than One Million Dollars ($1,000,000.00) as of the last day of such fiscal quarter. As used herein, "Debt Service" shall be defined as total interest expense and dividends on preferred stock for the most recent four quarters ended, plus the current maturity of long-term debt ("CMLTD") which shall be based on the CMLTD (including subordinated debt and capital leases) within the Balance Sheet dated 12-months prior to the most recent quarter ended, less that portion of balloon payments within CMLTD that exceeds normally scheduled payments. In the event of an acquisition, Debt Service shall include the Debt Service (as defined herein) of the acquired property."
EBITDA Coverage Ratio. At the end of any fiscal quarter of Borrower, permit the EBITDA Coverage Ratio, determined on a four quarter rolling basis, to be less than 1.50:1.00.
EBITDA Coverage Ratio. Maintain an EBITDA Coverage Ratio, of not less than (i) 1.25 to 1.00 as of the last day of each Fiscal Quarter ending before June 30, 2009 and (ii) 1.30 to 1.00 as of the last day of each Fiscal Quarter ending on June 30, 2009 and thereafter.”
EBITDA Coverage Ratio. Not at any time less than 2.0 to 1.0, --------------------- ---------- calculated at each fiscal quarter end on a rolling four fiscal quarter basis for the immediately preceding four fiscal quarters. "EBITDA Coverage Ratio" means EBITDA divided by the aggregate of total interest expense plus the current maturity of long-term debt and the current maturity of subordinated debt, and "EBITDA" means net profit before tax plus the non-cash portion of the $1,500,000 obligation of UDT Sensors, Inc. to the United States of America, plus interest expense (net of capitalized interest expense), depreciation expense and amortization expense.
EBITDA Coverage Ratio. Borrower shall maintain on the last day of each fiscal quarter year a ratio of (i) Borrower's earnings before interest expense, taxes, dividends, depreciation and amortization to (ii) Borrower's interest expense, dividends, taxes, and current maturities of long term debt of not less than 2.00 to 1.00.
EBITDA Coverage Ratio. EBITDA divided by Debt Service not less than (i) 1.20 to 1.00 as of December 31, 2004 and at the end of each fiscal quarter thereafter through June 30, 2005 for the four fiscal quarters then ended and (ii) 1.25 to 1.00 as of the end of the fiscal quarter ending September 30, 2005 and at the end of each fiscal quarter thereafter, for the four fiscal quarters then ended. As used herein, "Debt Service" shall be defined as total interest expense and dividends on preferred stock for the most recent four quarters ended, plus the current maturity of long-term debt ("CMLTD") which shall be based on the CMLTD (including subordinated debt and capital leases but excluding indebtedness outstanding under Line of Credit A and Line of Credit B) within the Balance Sheet dated 12-months prior to the most recent quarter ended, less that portion of balloon payments within CMLTD that exceeds normally scheduled payments. In the event of an acquisition, Debt Service shall include the Debt Service (as defined herein) of the acquired property.
EBITDA Coverage Ratio. At any time, permit Borrower's EBITDA Coverage Ratio to be less than 3.0 to 1.0.
EBITDA Coverage Ratio. Borrower shall maintain, on a rolling four-quarters basis as measured at the end of each fiscal quarter of Borrower, a ratio of EBITDA to Debt Service of not less than 1.00 to 1.00 until Borrower closes an initial public offering of its stock with net proceeds of at least Twenty Five Million Dollars ($25,000,000) received by Borrower, and not less than 1.25 to 1.00 thereafter, except for the fiscal quarter ending September 30 of each year when the ratio shall be not less than 1.00 to 1.00.
EBITDA Coverage Ratio. Borrower shall maintain a financial condition as follows using generally accepted accounting principles consistently applied and used consistently with prior practices (except to the extent modified, by the definitions herein): EBITDA Coverage Ratio as of the end of each fiscal quarter, calculated on a rolling four-quarter basis, of not less then 1.25 to 1.0. For the purpose of this provision, "EBITDA Coverage Ratio" means EBITDA divided by the aggregate of the total interest expense plus the prior period current maturities of long-term debt and the prior period current maturities of Subordinated Debt; and "EBITDA" means net income before tax plus the sum of interest expense (net of capitalized interest expense), depreciation expense, amortization expense, and non-cash or non-recurring expenses (as allowed by Lender), less the sum of non-cash or non-recurring income (as allowed by ▇▇▇▇▇▇), dividends, and distributions.
EBITDA Coverage Ratio. Not less than 1.2 to 1.0 on a rolling four-quarter basis as of each fiscal quarter end, based on the sum of the results of four consecutive quarters consisting of the present quarter and the three preceding quarters. ("EBITDA Coverage Ratio" means EBITDA minus non-financed capital expenditures minus dividends divided by interest expense plus income tax expense plus prior period current portion of long term indebtedness, and "EBITDA" means net profit before tax plus interest expense (net of capitalized interest expense), depreciation expense and amortization expense.) In the event that the denominator is a negative number, Borrower will be considered compliant with this covenant.