Eligible Raw Materials Clause Samples

Eligible Raw Materials. Based on the most recent Borrowing Base Certificate delivered by Borrower to Agent and on other information available to Agent, Agent shall in its reasonable credit judgment determine which Raw Materials of Borrower shall be "Eligible Raw Materials", except that no Raw Materials to which any of the exclusionary criteria set forth below applies shall be Eligible Raw Materials. Agent shall have the right to establish, modify, or eliminate Reserves against Eligible Raw Materials from time to time in its reasonable credit judgment. Agent reserves the right, at any time and from time to time after the Closing Date, to adjust any such criteria, to establish new criteria and to adjust advance rates with respect to Eligible Raw Materials in its reasonable credit judgment, subject to the approval of Supermajority Revolving Lenders in the case of adjustments or new criteria or changes in advance rates which have the effect of making more credit available. Eligible Raw Materials shall not include any Raw Material of Borrower that: (a) is not owned by Borrower free and clear of all Liens and rights of any other Person (including the rights of a purchaser that has made progress payments and the rights of a surety that has issued a bond to assure Borrower's performance with respect to that Inventory), except the Liens in favor of Agent, on behalf of itself and Lenders, and Permitted Encumbrances in favor of landlords and bailees to the extent permitted in Section 5.9 hereof (subject to Reserves, including those established by Agent in accordance with Section 5.9 hereof); (b) is (i) not located on premises owned, leased or rented by Borrower and set forth on Disclosure Schedule (3.2) or (ii) stored at a leased location or with a bailee,