Common use of Net Worth Covenant Clause in Contracts

Net Worth Covenant. The Guarantor shall at all times maintain a Net Worth greater than or equal to the outstanding principal amount of the Term Loans. For purposes of this Section, Net Worth shall mean the net value of the Guarantor within the meaning of Treasury regulation section 1.752-2(k) (which generally equals the amount by which the fair market value of all assets owned by the Guarantor exceeds the amount of all of the liabilities or other obligations of the Guarantor (other than the obligations under this Guaranty and other similar obligations within the meaning of Treasury regulation section 1.752-2(b)(1)), determined at the times specified in Treasury regulation section 1.752-2(k)). If the Guarantor fails to maintain such Net Worth for a period of ninety (90) continuous days, the Borrower agrees to pay an additional amount of interest of 1% per annum in addition to the interest rate otherwise applicable on the Term Loans from such ninetieth (90th) day until such time as the Guarantor is again in compliance with the Net Worth covenant set forth in this Section.