Common use of Interest Coverage Test Clause in Contracts

Interest Coverage Test. If at any time Borrower shall fail to maintain, for two (2) consecutive fiscal quarters, an Interest Coverage Ratio, determined as of the last day of each fiscal quarter (each, a “Testing Date”) for the four-quarter period ending on such Testing Date, of at least 2.0 to 1.0 (the “Interest Coverage Test”), then the Permitted Leverage Ratio for the fiscal quarter next succeeding the second such consecutive fiscal quarter with respect to which Borrower shall have so failed the Interest Coverage Test (such second consecutive fiscal quarter being herein referred to as the “Coverage Test Failure Quarter”) shall, subject to the provisions of Section 6.25(d), be decreased by subtracting 2.5% from the Permitted Leverage Ratio that was in effect on the Testing Date. (By way of example, if the Permitted Leverage Ratio for the Coverage Test Failure Quarter was 52.5%, the Permitted Leverage Ratio for the next succeeding fiscal quarter shall be 50.0%.) The decreased Permitted Leverage Ratio shall remain in effect unless and until further decreased pursuant to this Section 6.25(b) or increased pursuant to Section 6.25(c).

Interest Coverage Test. If at any time Borrower shall fail to maintain, for two (2) consecutive fiscal quarters, an Interest Coverage Ratio, determined as of the last day of each fiscal quarter (each, a “Testing Date”) for the four-quarter period ending on such Testing Dateday, of at least 2.0 to 1.0 (the “Interest Coverage Test”), then the Permitted Leverage Ratio for the fiscal quarter next succeeding the second such consecutive fiscal quarter with respect to which Borrower shall have so failed the Interest Coverage Test (such second consecutive fiscal quarter being herein referred to as the “Coverage Test Failure Quarter”) shall, subject to the provisions of Section 6.25(d), shall be decreased by subtracting 2.5% from as follows: (i) if the Permitted Leverage Ratio that for the Coverage Test Failure Quarter was in effect on 57.5%, the Testing DatePermitted Leverage Ratio for the next succeeding fiscal quarter shall be decreased by 5% to 52.5%; and (ii) if the Permitted Leverage Ratio for the Coverage Test Failure Quarter was less than 57.5%, the Permitted Leverage Ratio for the next succeeding fiscal quarter shall be decreased by 2.5%. (By way of example, if the Permitted Leverage Ratio for the Coverage Test Failure Quarter was 52.5%, the Permitted Leverage Ratio for the next succeeding fiscal quarter shall be 50.0%.) The decreased Permitted Leverage Ratio shall remain in effect unless and until further decreased pursuant to this Section 6.25(b) or increased pursuant to Section 6.25(c).