Common use of Debt to Tangible Net Worth Clause in Contracts

Debt to Tangible Net Worth. Borrower shall maintain a Debt to Tangible Net Worth not to exceed (amounts listed in chart) to 1.0 tested quarterly as of the end of each fiscal quarter. “Debt” shall mean total liabilities that in accordance with GAAP should be classified upon the balance sheet of Borrower as a liability, or to which reference should be made by footnotes thereto. “Tangible Net Worth” shall mean the shareholders’ equity of the Borrower less the aggregate amount of all intangible assets of Borrower. Intangible assets shall include, but are not limited to, amounts due from stockholders (Members, Partners), goodwill, customer lists, intellectual property, know-how and noncompetition agreements. Borrower’s failure to maintain its Debt to Tangible Net Worth ratio below the required maximum ratio as of each testing date shall constitute an Event of Default that is not curable.

Debt to Tangible Net Worth. Borrower shall maintain a Debt to Tangible Net Worth not to exceed (amounts listed in chart) to 1.0 tested quarterly as of the end of each fiscal quarter. “Debt” shall mean total liabilities that in accordance with GAAP should be classified upon the balance sheet of Borrower as a liability, or to which reference should be made by footnotes thereto. “Tangible Net Worth” shall mean the shareholders’ equity of the Borrower less the aggregate amount of all intangible assets of Borrower. Intangible assets shall include, but are not limited to, amounts due from stockholders (Members, Partners), goodwill, customer lists, intellectual property, know-how and noncompetition agreements. Borrower’s failure to maintain its Debt to Tangible Net Worth ratio below the required maximum ratio as of each testing date shall constitute an Event of Default that is not curable.. 6/30/2015 2x 12/31/2015 1.75x 6/30/2016 1.5x Thereafter 1.5x