Loss Reserve. The Borrower shall maintain loss and dealer reserves at all times during the term of the Agreement in an amount, calculated as of the last day of each quarter, which shall not be less than an amount equal to the Loss Reserve Percentage (determined as of the last day of such quarter) multiplied by the aggregate amount of all Net Contract Payments due as of the last day of such quarter. To the extent that the amount of the then outstanding Loss Reserve Shortfall is deducted (i) from Borrower’s Adjusted Net Earnings from Operations for purposes of the calculation of the Interest Coverage Ratio as set forth in Section 9.18 and (ii) from Borrower’s Adjusted Tangible Net Worth for purposes of the calculation of the Borrowing Base Ratio as set forth in Section 9.21, such Loss Reserve Shortfall shall be deemed not to be a default under this Section 9.20, provided, however, that Agent at any time may give Borrower 60 days’ prior written notice that failure to maintain the Loss Reserve as required by the first sentence of this Section 9.20 may thereafter be deemed a default under this Section 9.20 (whether or not any deductions are made).
Appears in 5 contracts
Samples: Loan Agreement (Nicholas Financial Inc), Loan Agreement (Nicholas Financial Inc), Loan Agreement (Nicholas Financial Inc)