Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables. All of the Rental Equipment, Wholesale Disposables and Equipment Disposables owned by any Borrowing Base Party and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by the Borrower to the Administrative Agent shall be “Eligible Rental Equipment”, “Eligible Wholesale Disposables” and “Eligible Equipment Disposables” for purposes of this Agreement, respectively, except any Inventory or Equipment (as applicable) to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Rental Equipment, Eligible Wholesale Disposables and/or Eligible Equipment Disposables, at any time either (x) an Event of Default has occurred and is then continuing and/or (y) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables from time to time, and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in each case effective on prior written notice delivered by the Administrative Agent to the Borrower, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the Borrowing
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Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables. All of the Rental Equipment, Wholesale Disposables and Equipment Disposables owned by any Borrowing Base Party and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by the Borrower to the Administrative Agent shall be “Eligible Rental Equipment”, “Eligible Wholesale Disposables” and “Eligible Equipment Disposables” for purposes of this Agreement, respectively, except any Inventory or Equipment (as applicable) to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Rental Equipment, Eligible Wholesale Disposables and/or Eligible Equipment Disposables, at any time either (x) an Event of Default has occurred and is then continuing and/or (y) Borrowing Availability is less than the Borrowing Base Adjustment LimitPermitted Discretion, to (i) establish, modify or eliminate Reserves against Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables from time to time, time and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in each case effective on prior written notice delivered by the Administrative Agent to the Borrower. Any exercise of rights by Administrative Agent pursuant to clause (ii) of the immediately preceding sentence shall be subject to the approval of Supermajority Required Lenders in the case of adjustments, new criteria or changes in advance rates which have the effect of whichmaking more credit available. Eligible Rental Equipment, along with Eligible Wholesale Disposables and Eligible Equipment Disposables shall not include any Inventory or Equipment of any Borrowing Base Party that:
(a) is not owned by a Borrowing Base Party free and clear of all Liens and rights of any other changes to Reserves, eligibility criteria, advance rates Person (including the rights of a purchaser that has made progress payments and the exercise rights of other Administrative Agent a surety that has issued a bond to assure any Borrowing Base Party’s performance with respect to any Inventory, but excluding the rights of any customer under this Section 2.15 and/or a customer contract entered into by any Borrowing Base Party in the ordinary course of business and consistent with past practices), except the Liens in favor of the Collateral Agent, on behalf of itself and Lenders, and Permitted Liens under Section 2.167.01(b), shall (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb), provided that such Permitted Liens are junior to the Liens in favor of the Collateral Agent, on behalf of itself and Lenders;
(b) is covered by a negotiable document of title, unless such document has been delivered to the Collateral Agent with all necessary endorsements, free and clear of all Liens except those in favor of the Collateral Agent and Lenders;
(c) is unrentable, obsolete, or slow moving;
(d) consists of display items or packing or shipping materials, manufacturing supplies or work in process Inventory;
(e) is not reduce of a type held for sale or rent in the ordinary course of any Borrowing Base by an aggregate amount Party’s business;
(f) is not subject to a first priority lien in excess favor of the BorrowingCollateral Agent on behalf of itself and Lenders, subject to Permitted Liens under Section 7.01(e) in favor of landlords and bailees;
(g) breaches any of the representations or warranties pertaining to Inventory set forth in the Loan Documents;
(h) is not in compliance with Environmental Laws;
(i) is not covered by casualty insurance reasonably acceptable to the Administrative Agent;
(j) is not located in the United States of America or Canada;
(k) has been acquired from a Person subject to any Sanction or on any specially designated nationals list maintained by OFAC; or
(l) is placed on consignment, sale or return or sale on approval.
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Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables. All of the Rental Equipment, Wholesale Disposables and Equipment Disposables owned by any Borrowing Base Party Borrower or any of its Subsidiaries and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by the Borrower Borrowers to the Administrative Agent shall be “Eligible Rental Equipment”, “Eligible Wholesale Disposables” and “Eligible Equipment Disposables” for purposes of this Agreement, respectively, except any Inventory or Equipment (as applicable) to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Rental Equipment, Eligible Wholesale Disposables and/or Eligible Equipment Disposables, at any time either (x) an Event of Default has occurred and is then continuing and/or (y) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables from time to time, and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in each case effective on prior written notice delivered by the Administrative Agent to the BorrowerBorrowers, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the BorrowingBorrowing Base Adjustment Limit. Any exercise of rights by Administrative Agent pursuant to the immediately preceding sentence (A) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (B) subject to the provisions of the immediately preceding clause (A), shall be subject to the approval of (i) Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves which have the effect of making more credit available and (ii) Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves, the effect of which is to make credit available to Borrowers in respect of Rental Equipment, Wholesale Disposables and Equipment Disposables in excess of eighty five percent (85%) of the orderly liquidation value of such assets as reflected in the appraisal of such assets most recently conducted by or at the request of Administrative Agent. If any Eligible Wholesale Deliverables or Eligible Equipment Disposables are located at any leased location of Borrowers, the Administrative Agent shall have the right, in its commercially reasonable judgment, to establish Lease Payment Reserves against such Eligible Wholesale Deliverables and/or Eligible Equipment Disposables effective upon five (5) days prior written notice delivered by the Administrative Agent to the Borrowers. Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables shall not include any Inventory or Equipment of any Borrower or any of its Subsidiaries that:
(a) is not owned by a Borrower or a Subsidiary 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 any Borrower’s or any Subsidiary’s performance with respect to any Inventory, but excluding the rights of any customer under a customer contract entered into by any Borrower in the ordinary course of business and consistent with past practices), except the Liens in favor of the Collateral Agent, on behalf of itself and Lenders, and Permitted Liens under Section 7.01(b), (c), (h), (j), (k), (n), (p), (q), (u), (v), (x), (aa) and (bb), provided that such Permitted Liens are junior to the Liens in favor of the Collateral Agent, on behalf of itself and Lenders;
(b) is covered by a negotiable document of title, unless such document has been delivered to the Collateral Agent with all necessary endorsements, free and clear of all Liens except those in favor of the Collateral Agent and Lenders;
(c) is unrentable, obsolete, or slow moving;
(d) consists of display items or packing or shipping materials, manufacturing supplies or work in process Inventory;
(e) is not of a type held for sale or rent in the ordinary course of any Borrower’s or any Subsidiary’s business;
(f) is not subject to a first priority lien in favor of the Collateral Agent on behalf of itself and Lenders, subject to Permitted Liens under Section 7.01(e) in favor of landlords and bailees;
(g) breaches any of the representations or warranties pertaining to Inventory set forth in the Loan Documents;
(h) is not in compliance with Environmental Laws;
(i) is not covered by casualty insurance reasonably acceptable to the Administrative Agent;
(j) is not located in the United States of America or Canada; or
(k) is placed on consignment, sale or return or sale on approval.
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Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables. All of the Rental Equipment, Wholesale Disposables and Equipment Disposables owned by any Borrowing Base Party Borrower or any of its Subsidiaries and reflected in the most recent Borrowing Base Certificate (to the extent required to be reflected pursuant to Section 6.01(e)) delivered by the Borrower Borrowers to the Administrative Agent shall be “Eligible Rental Equipment”, “Eligible Wholesale Disposables” and “Eligible Equipment Disposables” for purposes of this Agreement, respectively, except any Inventory or Equipment (as applicable) to which any of the exclusionary criteria set forth below applies. Administrative Agent shall have the right, in its commercially reasonable judgment that there has been a material and adverse change from historical performance with respect to the value of Eligible Rental Equipment, Eligible Wholesale Disposables and/or Eligible Equipment Disposables, at any time either (x) an Event of Default has occurred and is then continuing and/or (y) Borrowing Availability is less than the Borrowing Base Adjustment Limit, to (i) establish, modify or eliminate Reserves against Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables from time to time, and/or (ii) adjust from time to time any of the criteria set forth below, establish new criteria and adjust advance rates with respect to Eligible Rental Equipment, Eligible Wholesale Disposables and Eligible Equipment Disposables, in each case effective on prior written notice delivered by the Administrative Agent to the BorrowerBorrowers, the effect of which, along with any other changes to Reserves, eligibility criteria, advance rates and the exercise of other Administrative Agent rights under this Section 2.15 and/or under Section 2.16, shall not reduce the Borrowing Base by an aggregate amount in excess of the BorrowingBorrowing Base Adjustment Limit. Any exercise of rights by Administrative Agent pursuant to the immediately preceding sentence (A) shall be reversed, automatically and without further action by Administrative Agent, at such time that no Event of Default shall have occurred and remain continuing and Borrowing Availability, calculated without giving effect to any actions taken by Administrative Agent pursuant to the immediately preceding sentence, is greater than the Borrowing Base Adjustment Limit and (B) subject to the provisions of the immediately preceding clause (A), shall be subject to the approval of (i) Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves which have the effect of making more credit available and (ii) Supermajority Required Lenders in the case of adjustments, new criteria, changes in advance rates or the elimination of Reserves, the effect of which is to make credit available to Borrowers in respect of Rental Equipment, Wholesale Disposables and Equipment Disposables in excess of eighty five percent
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