INITIAL RESERVES. CHANGES TO RESERVES Sample Clauses

INITIAL RESERVES. CHANGES TO RESERVES. (a) At the execution of this Agreement, the only Reserves are as follows: (i) Shrinkage (an Inventory Reserve): An amount equal to 2% of the total net retail sales of the Borrower made after the date of the immediately preceding physical count of such Borrower's Inventory. The Reserve for Shrinkage shall be adjusted daily based upon the immediately preceding days' sales and shall be reset after the results of each physical count of such Borrower's Inventory have been furnished to the Agent and posted to the Borrower's stock ledger. (ii) Customer Credits (Merchandise Credits, Layaway Deposits and Gift Certificates) (an Inventory Reserve): An amount equal to fifty percent (50%) of the outstanding amount of such items. The Borrower agrees to accurately post such items to the stock ledger daily, absent which the Agent may establish a Reserve hereunder in such amount as the Agent in its reasonable discretion determines. (iii) A Landlord Lien Reserve (an Availability Reserve): An amount equal to three (3) months rent for the Borrower's locations in Pennsylvania, Washington, Virginia and such other states as the Agent shall reasonably determine a Landlord could obtain a lien having priority over the rights of the Agent; provided that such Reserve, as to any particular location, shall be eliminated upon the Agent's receipt of a landlord's waiver reasonably satisfactory in form and substance to the Agent in its discretion. (iv) A Landing Cost Reserve (an Availability Reserve): An amount equal to Ten percent (10%) of the Cost of Acceptable In-Transit Inventory, but only with respect to Inventory for which the Landing Costs are not paid or to be paid by Federated Department Stores, Inc. under the Sourcing Agreement or by other sourcing agents under sourcing or purchasing arrangements. (b) The Agent shall not establish any Reserve, other than the Reserves referenced in Section 2-2(a) above, except in the exercise of the Agent's reasonable discretion and then only upon not less than seven (7) Business Days prior notice to the Borrower in each instance. Except as provided 2-2(a), above, a change to a then existing Reserve may be made only with not less than seven (7) Business Days prior notice to the Borrower.

INITIAL RESERVES. CHANGES TO RESERVES. (a) At the execution of this Agreement, the only Reserves are as reflected on the Borrowing Base Certificate, a specimen of which is annexed hereto as EXHIBIT 6.4. (b) The Administrative Agent shall provide not less than seven (7) days prior notice to the Borrowers' Representative of the establishment of any Reserve (other than those established at the execution of this Agreement) EXCEPT THAT the following may be undertaken without such prior notice: (i) a change to the amount of a then existing Reserve (as distinguished from a change by which such Reserve is measured or determined), which change reflects changed circumstances (e.g. the amount of the Reserve for Customer Credit Liability will change based on the aggregate of Customer Credit Liability at any one time); and (ii) the creation of, or a change to an existing, Reserve on account of circumstances which the Administrative Agent determines as having a material adverse change on the maintenance of loan to collateral values.