Common use of Net Worth Covenant Clause in Contracts

Net Worth Covenant. Sellers covenant and agree that (a) at Closing, Sellers shall deposit, from the proceeds of the Purchase Price, an amount equal to the Liability Cap in an account established by Sellers with a bank or other financial institution and (b) during the Survival Period (as defined in Section 16 below) (and, in the event Buyer has made a timely claim(s) against Sellers pursuant to this Section 11, thereafter until the claim(s) have been fully resolved): (i) Sellers shall keep and maintain cash or cash equivalents in such account in an amount equal to the Liability Cap, (ii) Sellers shall not pledge, encumber or otherwise grant a security interest in such account or such cash or equivalents and (iii) Sellers shall not distribute or pay any such cash or cash equivalents to its members, partners, affiliates or any other third party.