Common use of Interest Coverage Covenant Clause in Contracts

Interest Coverage Covenant. At all times during the term of the Loan, the Borrower’s minimum interest coverage ratio shall exceed 1.4x for each calendar quarter. For the purposes of this Agreement, interest coverage ratio shall be equal to EBITDA for a calendar quarter divided by Interest Expense for the same calendar quarter. As used herein, EBITDA shall mean net income plus Interest Expense, depreciation, amortization, and expensed acquisition costs, all as reflected in the Borrower’s 10Q or 10K, as applicable, filed with the Securities and Exchange Commission. As used herein, “Interest Expense” shall mean Borrower’s interest expense as reported in the Borrower’s 10Q or 10K, as applicable, filed with the Securities and Exchange Commission.