Covenant Compliance Calculations Clause Samples
The Covenant Compliance Calculations clause defines how a party’s adherence to financial or operational covenants will be measured and verified under an agreement. Typically, this clause outlines the specific formulas, accounting standards, or time periods to be used when calculating compliance with covenants such as debt ratios, liquidity thresholds, or other performance metrics. By establishing clear calculation methods, the clause ensures consistency and transparency in monitoring obligations, reducing the risk of disputes over whether covenants have been met.
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Covenant Compliance Calculations. (See Credit Agreement definitions for actual calculation)
Covenant Compliance Calculations. The Borrowers shall comply with the financial ratios set forth in SECTION 6.1(a) and SECTION 6.1(c) as of the date of each Borrowing. Such calculations shall be made in accordance with Section 6.1(f). The Borrowers shall deliver an officer’s certificate, signed by the Financial Officer of a Borrower, certifying that the pro forma calculations as of the date of such Borrowing demonstrate the Borrowers’ compliance with the covenants and financial ratios set forth in SECTION 6.1(a) and SECTION 6.1(c), and the Borrowers shall deliver supporting calculations demonstrating such compliance if the amount of Indebtedness incurred or repaid, or the value of assets acquired or sold, has changed by more than $100,000,000 since the date of the most recent certificate delivered pursuant to SECTION 5.1(c).
Covenant Compliance Calculations. The Borrower shall deliver the certificate described in Section 5.1(c) evidencing compliance with the financial ratios set forth in Sections 6.13(f) and (g) as of each Borrowing Date. Such calculations shall be made in accordance with Section 6.13(j).
Covenant Compliance Calculations. The Borrower shall maintain at all times:
(I) RATIO OF CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED TANGIBLE CAPITAL FUNDS OF NOT MORE THAN 6:1:
(i) Consolidated Indebtedness: $________ (ii) Consolidated Tangible Capital Funds: a. Capital Stock: $_______ b. Additional Paid-in Capital: $_______ c. Retained Earnings: $_______ d. Subordinated Debt: $_______ Subtotal 1 (sum of a, b, c, and d): $_______ Less: x. Organizational Costs and Goodwill: $_______ y. Treasury Stock: $_______ z. 25% of Debt Issue Costs: $_______ Subtotal 2 (sum of x, y, and z): $_______ Total ii (Subtotal 1 minus Subtotal 2): $________ ACTUAL RATIO OF (i) TO (ii): _________ MAXIMUM RATIO: 6:1 _________
(II) MINIMUM CONSOLIDATED TANGIBLE NET WORTH: Actual Consolidated Tangible Net Worth: a. Capital Stock: $_______ b. Additional Paid-in Capital $_______ c. Retained Earnings: $_______ Subtotal 1 (sum of a, b, and c): $_______ Less: x. Organizational Costs and Goodwill: $_______ y. Treasury Stock: $_______ z. 25% of Debt Issue Costs: $_______ Subtotal 2 (sum of x, y, and z): $_______ $_______ Total Actual Consolidated Tangible Net Worth (Subtotal 1 minus Subtotal 2): $________