22 April 2014
“Adjusted Tangible Net Worth” means, with respect to Seller and its Subsidiaries on a consolidated basis at any date, an amount equal to (i) the Tangible Net Worth of Seller and its Subsidiaries on a consolidated basis at such date, plus (ii) the lesser of (A) one percent (1%) of the unpaid principal balances of all Mortgage Loans at such date for which Seller and its Subsidiaries owns the Servicing Rights and (B) the capitalized value of Seller’s and its Subsidiaries’ Servicing Rights, plus (iii) the unpaid principal amount of all Qualified Subordinated Debt of Seller and its Subsidiaries at such date, minus (iv) an amount equal to 50% of the net book value of Mortgage Loans held by Seller for investment purposes at such date, minus (v) an amount equal to 50% of the net book value of net REO Property held by Seller at such date, minus (vi) an amount equal to 50% of the net book value of other illiquid investments held by Seller at such date.
In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc) less any liabilities you may have. In the financial markets, tangible net worth represents the amount of physical assets a company has net of its liabilities. Thus, it represents the supposed liquidation proceeds a company would fetch if its operations were to cease immediately and the firm was sold off.
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