Common use of Interest Rate Reduction Clause in Contracts

Interest Rate Reduction. 5.1 The interest rates with respect to the Line Note and any other Note which bears interest at a floating rate shall be reduced by one quarter of one percent (1/4%) per annum at all times while the following conditions shall have been satisfied by Company: (a) The ratio of Debt to Tangible Net Worth is equal to or less than 1.5 to 1.0; (b) The Leverage Ratio is equal to or less than 2.5 to 1.0 and (c) The after tax profit for Company and its consolidated subsidiaries for two consecutive years (beginning with the year ending December 31, 1997) are $2,000,000 or more per year. 5.2 The determination of whether the conditions for reduction have been satisfied shall be determined based on Company's quarterly and year end financial statements and shall be adjusted as of the first day of the first month following the delivery of such financial statements indicating that an adjustment to the interest rates is applicable.