Common use of Discretionary Rights Clause in Contracts

Discretionary Rights. The Advance Rates may be increased or decreased by Agent at any time and from time to time in the exercise of its Permitted Discretion, provided, that, Agent shall endeavor to give Borrowers notice of any decrease in the Advance Rates. Each Borrower consents to any such increases or decreases and acknowledges that decreasing the Advance Rates or increasing or imposing Reserves may limit or restrict Advances requested by Borrowing Agent. Without limitation of the foregoing, Agent shall have the right (but not the obligation), to establish from time to time, against the Maximum Revolving Advance Amount, Reserves to reflect the risks, as determined by Agent in its sole discretion exercised in a commercially reasonable manner, of currency exchange rate fluctuations with respect to any Revolving Advances or Letters of Credit denominated in Canadian Dollars or with respect to any Priority Payables. The amount of any Reserves established by Agent shall have a reasonable relationship to the event, condition, other circumstance, or fact that is the basis for such Reserve and shall not be duplicative of any other Reserve established and currently maintained.