Common use of Land Owned Test Clause in Contracts

Land Owned Test. At any time at which the Leverage Ratio, determined as of the last day of the most recent fiscal quarter, exceeds 55%, the Borrower will not permit the ratio of (i) the Adjusted Book Value of Land Owned to (ii) Adjusted Consolidated Tangible Net Worth, to exceed 1.25 to 1.00 (the “Land-Owned Test”). The Borrower’s failure to comply with the Land-Owned Test shall not constitute an Event of Default or Default, but there shall be excluded from the Borrowing Base, as of the last day of the quarter in which such noncompliance with the Land-Owned Test occurs, Land Under Development, Entitled Land and/or Finished Lots (as selected by the Borrower) having an aggregate book value equal to the amount by which the Adjusted Book Value of Land Owned would be required to be reduced to bring the Borrower into compliance with the Land-Owned Test as of such day.

Land Owned Test. At any time at which the Leverage Ratio, determined as of the last day of the most recent fiscal calendar quarter, exceeds 55%,, the Borrower will not permit the ratio of (i) the Adjusted Book Value of Land Owned to (ii) Adjusted Consolidated Tangible Net Worth, to exceed 1.25 to 1.00 (the “Land-Owned Test”). The Borrower’s failure to comply with the Land-Owned Test shall not constitute an Event of Default or Default, but there shall be excluded from the Borrowing Base, as of the last day of the quarter in which such noncompliance with the Land-Owned Test occurs, Land Under Development, Entitled Land and/or Finished Lots (as selected by the Borrower) having an aggregate book value equal to the amount by which the Adjusted Book Value of Land Owned would be required to be reduced to bring the Borrower into compliance with the Land-Owned Test as of such day.