Common use of Lender Discretion; Establishment of Reserves Clause in Contracts

Lender Discretion; Establishment of Reserves. The Lender shall have the right, from time to time, in the good faith exercise of its reasonable credit judgment, to establish reserves in such amounts and with respect to such matters as the Lender deems necessary or appropriate and to increase or decrease such reserves. In exercising such reasonable credit judgment, the Lender may take into account factors which: (a) will or could reasonably be expected to affect adversely in any material respect the enforceability or priority of the Lender’s Liens or the amount which the Lender would be likely to receive in the liquidation of the Borrowers’ real properties or (b) may demonstrate that any collateral report or financial information concerning any Borrower is incomplete, inaccurate or misleading in any material respect. In the exercise of such reasonable credit judgment, the Lender may also establish reserves against anticipated obligations, contingencies or conditions affecting any Borrower or its Subsidiaries including: (a) tax liabilities and other obligations owing to governmental entities, (b) asserted litigation liabilities, (c) anticipated remediation for compliance with Environmental Laws, or (d) obligations owing to any lessor of real property, any warehouseman or mortgagor on third party mortgaged sites. Prior to any Event of Default which is continuing, the Lender shall use commercially reasonable efforts to notify the Borrower Representative prior to the effectiveness of any actions taken under this Section, but shall not be liable for any failure to so notify the Borrower Representative.

Lender Discretion; Establishment of Reserves. The Lender shall have the right, from time to time, in the good faith exercise of its reasonable credit judgment, to establish reserves in such amounts and with respect to such matters as the Lender deems necessary or appropriate and to increase or decrease such reserves. In exercising such reasonable credit judgment, the Lender may take into account factors which: (ai) will or could reasonably be expected to affect adversely in any material respect the enforceability or priority of the Lender’s Liens or the amount which the Lender would be likely to receive in the liquidation of the Borrowers’ real properties or (bii) may demonstrate that any collateral report or financial information concerning any Borrower is incomplete, inaccurate or misleading in any material respect. In the exercise of such reasonable credit judgment, the Lender may also establish reserves against anticipated obligations, contingencies or conditions affecting any Borrower or its Subsidiaries including: (a) tax liabilities and other obligations owing to governmental entities, (b) asserted litigation liabilities, (c) anticipated remediation for compliance with Environmental Laws, or (d) obligations owing to any lessor of real property, any warehouseman or mortgagor on third party mortgaged sites. Prior to any Event of Default which is continuing, the Lender shall use commercially reasonable efforts to notify the Borrower Representative prior to the effectiveness of any actions taken under this Section, but shall not be liable for any failure to so notify the Borrower Representative.

Lender Discretion; Establishment of Reserves. Each Lender may, but shall not be obligated to, rely on each Borrowing Base Certificate and any other schedules or reports in determining the eligibility of Accounts and Inventory. The Lender Administrative Agent shall have the right, from time to time, in the good faith exercise of its reasonable credit judgmentjudgment (consistent with the asset-based nature of this credit), to establish reserves against the Borrowing Base in such amounts and with respect to such matters as the Lender Administrative Agent deems necessary or appropriate and to increase or decrease such reserves. In exercising such reasonable credit judgment, the Lender Administrative Agent may take into account factors which: (a) will or could reasonably be expected to affect adversely in any material respect the value of any Collateral, the enforceability or priority of the Lender’s Administrative Agent's Liens or the amount which the Lender Lenders would be likely to receive in the liquidation of the Borrowers’ real properties such Collateral or (b) may demonstrate that any collateral report or financial information concerning any Borrower the Borrowers is incomplete, inaccurate or misleading in any material respect. In the exercise of such reasonable credit judgment, the Lender Administrative Agent may also establish reserves against anticipated obligations, contingencies or conditions affecting any Borrower the Borrowers or its their Subsidiaries including: (a) tax liabilities and other obligations owing to governmental entities, (b) asserted litigation liabilities, (c) anticipated remediation for compliance with Environmental Laws, or (d) obligations owing to any lessor of real property, any warehouseman or mortgagor on third party mortgaged sites. Prior to any Event of Default which is continuing, the Lender Administrative Agent shall use commercially reasonable efforts provide five (5) Business Days' advance written notice to notify the Borrower Representative prior to the effectiveness of any actions taken under this Section, but shall not be liable for any failure to so notify the Borrower RepresentativeRepresentative .

Lender Discretion; Establishment of Reserves. The Lender shall have the right, from time to time, in the good faith exercise of its reasonable credit judgment, to establish reserves against the Maximum Loan Amount in such amounts and with respect to such matters as the Lender deems necessary or appropriate and to increase or decrease such reserves. In exercising such reasonable credit judgment, the Lender may take into account factors which: (ai) will or could reasonably be expected to affect adversely in any material respect the enforceability or priority of the Lender’s Liens or the amount which the Lender would be likely to receive in the liquidation of the Borrowers’ real properties or (bii) may demonstrate that any collateral report or financial information concerning any Borrower is incomplete, inaccurate or misleading in any material respect. In the exercise of such reasonable credit judgment, the Lender may also establish reserves against anticipated obligations, contingencies or conditions affecting any Borrower or its Subsidiaries including: (a) tax liabilities and other obligations owing to governmental entities, (b) asserted litigation liabilities, (c) anticipated remediation for compliance with Environmental Laws, or (d) obligations owing to any lessor of real property, any warehouseman or mortgagor on third party mortgaged sites. Prior to any Event of Default which is continuing, the Lender shall use commercially reasonable efforts to notify the Borrower Representative prior to the effectiveness of any actions taken under this Section, but shall not be liable for any failure to so notify the Borrower Representative.

Lender Discretion; Establishment of Reserves. The Lender shall have the right, from time to time, in the good faith exercise of its reasonable credit judgment, to establish reserves in such amounts and with respect to such matters as the Lender deems necessary or appropriate and to increase or decrease such reserves. In exercising such reasonable credit judgment, the Lender may take into account factors which: (ai) will or could reasonably be expected to affect adversely in any material respect the enforceability or priority of the Lender’s Liens or the amount which the Lender would be likely to receive in the liquidation of the Borrowers’ real properties or (bii) may demonstrate that any collateral report or financial information concerning any Borrower is incomplete, inaccurate or misleading in any material respect. In the exercise of such reasonable credit judgment, the Lender may also establish reserves against anticipated obligations, contingencies or conditions affecting any Borrower or its Subsidiaries including: (a) tax liabilities and other obligations owing to governmental entities, (b) asserted litigation liabilities, (c) anticipated remediation for compliance with Environmental Laws, or (d) obligations owing to any lessor of real property, any warehouseman or mortgagor on third party mortgaged sites. Prior to any Event of Default which is continuing, the Lender shall use commercially reasonable efforts to notify the Borrower Representative prior to the effectiveness of any actions taken under this Section, but shall not be liable for any failure to so notify the Borrower Representative.