Negative EBITDA Clause Samples
A Negative EBITDA clause defines the consequences or actions required if a company's earnings before interest, taxes, depreciation, and amortization (EBITDA) fall below zero. Typically, this clause may trigger certain rights for lenders or investors, such as increased reporting requirements, restrictions on further borrowing, or even the right to call a default under a loan agreement. Its core practical function is to protect stakeholders by providing early warning and remedies when a company's financial performance deteriorates significantly, thereby allocating risk and encouraging financial discipline.
Negative EBITDA. During the period from January 1, 1998 through December 31, 2000 cumulative negative EBITDA of the Borrower at the end of any fiscal quarter shall not exceed the sum of (i) $7,000,000 and (ii) an amount, not to exceed $8,000,000, which is equal to the amount by which the aggregate principal amount of unsecured Indebtedness of the Borrower to SDI outstanding at the end of such quarter (or, in the case of the quarter ending June 30, 1999, outstanding on July 31, 1999) as a result of advances by SDI in accordance with Section 6.03 (h) hereof exceeds $10,000,000; provided, that if, on any date in any fiscal quarter commencing with the fiscal quarter in which the Preliminary Acceptance Date occurs, the amount of unsecured Indebtedness to SDI outstanding in accordance with Section 6.03 (h) hereof is less than $25,000,000, the maximum amount of cumulative negative EBITDA (the EBITDA Cap") permitted by the preceding terms of this Section 6.01 (c) at the end of such quarter will be reduced by an amount equal to (A) the difference between $25,000,000 and the principal amount of such unsecured Indebtedness to SDI outstanding at the end of such quarter minus amounts by which the EBITDA Cap previously has been so reduced under this proviso divided by (B) four minus the number of fiscal quarters in which the EBITDA Cap previously has been so reduced. In the event that the amount of such unsecured Indebtedness to SDI increases subsequent to one or more such reductions to the EBITDA Cap, the amount of such increase shall be restored to the EBITDA Cap on a one-for-one basis up to the amount of such previous reductions. In no event shall the EBITSA Cap be reduced below $7,000,000.
Negative EBITDA. From January 1, 1998 to December 31, 1998, the Borrower's cumulative negative EBITDA shall not exceed $5,000,000, and during the period from January 1, 1998 through December 31, 1999 cumulative negative EBITDA of Borrower shall not exceed $7,000,000.
Negative EBITDA. Permit EBITDA as of the end of any Measurement Period to be less than $0.00.
Negative EBITDA. Section 6.01(c) of the Credit Agreement is hereby amended to read in its entirety as follows:
Negative EBITDA. UPCF agrees that negative EBITDA attributable to New Services shall not exceed Euro 50,000,000 in aggregate for the period from 30 June 1999 to 30 June 2001 unless funded by UPC by means of a new cash Subordinated Shareholder Loan or by a cash subscription for equity share capital of UPCF which Subordinated Shareholder Loan or subscription for equity share capital is made no later than 45 days after the date on which such limit was exceeded.
Negative EBITDA. As of June 30, 2001, as of the last day of the fiscal quarter immediately preceding the quarter in which the Keep Well Period Termination Date occurs (unless the Keep Well Period Termination Date is July 1, 2002) and as of the last day of the fiscal quarter in which the Keep Well Period Termination Date occurs, cumulative negative EBITDA of the Borrower for the period from January 1, 1998 through such date shall not exceed $37,500,000.
Negative EBITDA. Permit EBITDA as of the end of any Measurement Period to be less than $0.00. All Guaranties and other Indebtedness permitted pursuant to Sections 7.02(e), 7.02(g), and 7.02(h) shall be excluded from the calculation of this financial covenant at all times that such Indebtedness remains contingent and which are not letters of credit (including any Letters of Credit issued by the Lender) or reflected as liabilities on Borrower’s balance sheet in accordance with GAAP.
Negative EBITDA. During the period from January 1, 1998 through the Financial Covenant Date cumulative negative EBITDA of the Borrower at the end of any fiscal quarter shall not exceed $35,000,000."
(i) Indebtedness of the Borrower to SDI.