Seller Net Worth Sample Clauses
The Seller Net Worth clause establishes a minimum financial threshold that the seller must maintain, typically to ensure the seller's ongoing ability to fulfill contractual obligations. This clause may require the seller to provide periodic financial statements or certifications demonstrating that their net worth does not fall below a specified amount during the term of the agreement. Its core practical function is to protect the buyer by reducing the risk of seller insolvency or default, thereby ensuring the seller remains financially stable throughout the contract period.
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Seller Net Worth. Seller covenants and agrees that for a period of ---------------- not less than one year immediately following the Closing, Seller shall maintain a tangible net worth (calculated in accordance with GAAP, with the exception that real estate shall be accounted for at fair market value) of not less than $1,000,000.
Seller Net Worth. From and after the Closing, the Seller will maintain a minimum net worth of (a) $40 million until the first anniversary of the Closing, and (b) $14 million until the sixth anniversary of the Closing; provided, however, that if any of the events described in Section 9.9 of the Seller Disclosure Letter occurs, then the foregoing minimum net worth requirements will be reduced as provided in such Section 9.9 of the Seller Disclosure Letter; provided, further, however, if the Buyer makes an indemnification claim against the Seller pursuant to Article X hereof, then notwithstanding the permitted reduction in such minimum net worth set forth above following the first or sixth anniversary dates of the Closing, as applicable, such reduction shall not occur to the extent the pending indemnification claim would exceed the minimum net worth following such reduction and such reduction shall only occur when such claim has been fully resolved to the Buyer’s reasonable satisfaction. “Minimum net worth” is defined as all assets owned by the Seller which are free and clear of any liens, claims, or other encumbrances minus all liabilities of the Seller, determined in accordance with GAAP. The Seller shall provide to the Buyer, on a quarterly basis, a balance sheet prepared in accordance with GAAP setting forth the Seller’s fair market value certified by a manager of the Seller or an independent accounting firm.