Tangible Net Worth Covenant Clause Samples
A Tangible Net Worth Covenant is a contractual provision that requires a party, typically a borrower, to maintain a minimum level of tangible net worth throughout the term of an agreement. This covenant is calculated by subtracting intangible assets and liabilities from total assets, ensuring that the company retains a certain amount of real, physical equity. By imposing this requirement, the clause helps protect lenders or counterparties by ensuring the financial stability of the obligated party, thereby reducing the risk of default due to insufficient asset backing.
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Tangible Net Worth Covenant. Subsection b. of Section 6.14 of the Loan Agreement entitled “Tangible Net Worth” is hereby deleted in its entirety and the following is substituted therefor:
Tangible Net Worth Covenant. Section 6.12 of the Credit Agreement is hereby amended by deleting the text of said Section in its entirety and replacing the same with the following: “The Borrower will maintain its Tangible Net Worth, on a consolidate basis with all Subsidiaries, as of the end of each fiscal quarter commencing with the fiscal quarter ending June 30, 2009, at not less than $8,000,000.00.
Tangible Net Worth Covenant. The minimum Tangible Net Worth covenant set forth in Section 6.10(b) of the Loan Agreement shall not apply to Borrower for the period from October 1, 2009, to November 23, 2009.
Tangible Net Worth Covenant. Borrower shall not permit its Tangible Net Worth as at the last day of any calendar month (after giving effect to any capital contributions made by the Members with respect to such calendar month in accordance with the terms of the LLC Agreement) to be less than its Required Equity Investment as of such date; provided that Borrower shall not be deemed to be in breach of this covenant so long as (i) the actual Tangible Net Worth is no more than $ XXXXXXXXXX less than its Required Equity Investment as of such date, or (ii) if the actual Tangible Net Worth is more than $ XXXXXXXXXX less than its Required Equity Investment as of such date, then each Member shall make a capital contribution on or before the twentieth (20th) day of the following month in the amount of such difference. Lender acknowledges that under the terms of Section 2.4 of the LLC Agreement, required capital contributions to Borrower at the end of each month will be based upon estimates. In the case of a deficit of less than $XXXXXXXXXX, Borrower shall take such deficiency into account when determining the required capital contributions to be made by the Members for the following month. [PORTIONS OF THIS SECTION HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIALITY UNDER RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. A COPY OF THIS EXHIBIT WITH ALL SECTIONS INTACT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
Tangible Net Worth Covenant. Borrower will at all times during the term of the Loan maintain a minimum Tangible Net Worth of not less than $2,500,000.
Tangible Net Worth Covenant. For the Consolidated Group permit tangible net worth to be less than $3,000,000.00 at any time. The foregoing covenant shall be measured quarterly, as of the end of each calendar quarter. All computations made to determine compliance with the requirements contained in this paragraph shall be made in accordance with GAAP and shall be certified as true and correct by Borrower.
Tangible Net Worth Covenant. Borrower shall not permit its Tangible Net Worth as at the last day of any calendar month (after giving effect to any capital contributions made by the Members with respect to such calendar month in accordance with the terms of the LLC Agreement) to be less than its Required Equity Investment as of such date; provided that Borrower shall not be deemed to be in breach of this covenant so long as (i) the actual Tangible Net Worth is no more than $ [***] less than its Required Equity Investment as of such date, or (ii) if the actual Tangible Net Worth is more than $ [***] less than its Required Equity Investment as of such date, then each Member shall make a capital contribution on or before the twentieth (20th) day of the following month in the amount of such difference. Lender acknowledges that under the terms of Section 2.4 of the LLC Agreement, required capital contributions to Borrower at the end of each month will be based upon estimates. In the case of a deficit of less than $[***], Borrower shall take such deficiency into account when determining the required capital contributions to be made by the Members for the following month.
Tangible Net Worth Covenant. In addition to the financial covenants contained in this Agreement regarding a minimum amount of New Vehicle Equity as set forth in the section hereof entitled MAINTAIN NEW VEHICLE EQUITY, it is understood and agreed that Dealer shall maintain Tangible Net Worth in at least the following minimum amounts: TIME PERIOD AMOUNT --------------------------------------------------- through 12/31/96 $1,500,000.00 1/1/97 - 12/31/97 $1,800,000.00 1/1/98 - 12/31/98 $2,200,000.00 1/1/99 and thereafter $2,500,000.00
Tangible Net Worth Covenant. Section 8.2 of the Credit Agreement is hereby amended and restated in its entirety as of the date hereof as follows: "Permit Tangible Net Worth as of the last day of any fiscal quarter to be less than the sum of $25,000,000 ($30,000,000 for the fiscal quarter ended June 30, 2003 and each fiscal quarter thereafter), plus 50% of Borrowers' cumulative Net Income from January 1, 1999 calculated for each succeeding fiscal quarter through the last day of such fiscal quarter.
Tangible Net Worth Covenant. That portion of the Schedule to Loan Agreement entitled “Financial Covenants (Section 5.1)” which now reads as follows: