Reserves; Changes to Reserves Clause Samples
The "Reserves; Changes to Reserves" clause defines how financial reserves are established and adjusted within an agreement, typically to cover potential liabilities or future obligations. It outlines the process for setting aside funds or assets, specifies who has the authority to modify the reserve amounts, and may detail the circumstances under which reserves can be increased or decreased, such as changes in risk assessments or regulatory requirements. This clause ensures that adequate resources are maintained to address unforeseen events, thereby protecting the parties from unexpected financial shortfalls and promoting fiscal responsibility.
Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Restatement Effective Date are the following:
(i) The reserve (an Inventory Reserve), if any, referenced in clause (b)(ii)(B) of the definition of Eligible Inventory.
(ii) A reserve (an Availability Reserve) for certain Environmental Liabilities in an amount determined by the Administrative Agent in its reasonable business judgment.
(iii) A reserve (an Availability Reserve) in (A) an amount equal to all past due rent for all of the Borrowers’ leased locations other than leased locations with respect to which the Administrative Agent has received a Collateral Access Agreement, plus (B) an amount equal to all past due rent for all of the Borrowers’ distribution centers or warehouses, other than distribution centers or warehouses with respect to which the Administrative Agent received a Collateral Access Agreement.
(iv) A reserve (an Availability Reserve) for so long as any Swap Contract is in effect in an amount equal to the Swap Termination Value of such Swap Contract (calculated substantially on a net basis for all such Swap Contracts).
(v) A reserve (an Availability Reserve) for royalties payable in an amount determined by the Administrative Agent in its reasonable business judgment.
(vi) A reserve (an Availability Reserve) for (A) claims under PACA, the Food Security Act and the Packers and Stockyards Act and (B) Permitted Liens (including Liens arising from claims under PACA) on any Eligible Accounts, Eligible In-Transit Inventory, Eligible Inventory, Eligible Real Property and Eligible Rolling Stock that are prior to the Liens of the Loan Documents, in each case in an amount determined by the Administrative Agent in its reasonable business judgment.
(vii) Without duplication of any other Reserve, a reserve (an Availability Reserve) for repackaging costs.
(viii) A reserve (a Tax Stamp Reserve) relating to Tax Stamps in an amount determined by the Administrative Agent in its reasonable business judgment.
(b) The Administrative Agent may hereafter establish additional Reserves or change any of the foregoing Reserves, in the exercise of its reasonable business judgment acting in accordance with industry standards for asset based lending in the food and tobacco distribution industry. The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter that is the basis for the Reserve. Notwithstanding anythi...
Reserves; Changes to Reserves. (a) The initial Inventory Reserves, Account Reserves and Availability Reserves as of the Effective Date are the following:
(i) Shrink (an Inventory Reserve): An amount equal to the one month accrual for Shrink reflected in the Borrowers’ books and records from time to time.
(ii) Defective Inventory (an Inventory Reserve) (without duplication for damaged Inventory which is not deemed “eligible” for inclusion within the calculation of the Domestic Borrowing Base or Canadian Borrowing Base, as applicable): An amount equal to the amount of defective goods reflected in the Borrowers’ books and records from time to time.
(iii) Taxes (an Availability Reserve): An amount equal to taxes (whether assessed or estimated) and other governmental charges, including, without limitation, ad valorem and personal property taxes, provincial sales taxes and GST and HST taxes, which would have a Lien senior to the Liens of the Collateral Agent or the Canadian Agent, as applicable.
(iv) Customer Credit Liabilities (an Availability Reserve): An amount equal to 50% of the amount of gift certificates, gift cards, amounts due to customers, merchandise credits, and “passport club” liability reflected in the Borrowers’ books and records from time to time.
(v) Rent (an Availability Reserve): An amount equal to two month’s gross cash rent for each location in the States of Pennsylvania, Virginia, Washington and any other state or province which provides a lien for landlords which may have priority over the Collateral Agent’s Lien or Canadian Agent’s Lien, as applicable (except for those locations for which the Agents have received a landlord’s waiver satisfactory in form to the Agents).
(vi) WEPPA (an Availability Reserve): An amount equal to $278,000 for amounts due to employees and protected under the Wage Earner Protection Program Act (Canada) which have priority over the Canadian Agent’s Lien.
(b) The Administrative Agent shall have the right, at any time and from time to time after the Closing Date in its Permitted Discretion to establish, modify or eliminate Reserves upon two Business Days prior notice to the Borrowers, (during which period the Administrative Agent shall be available to discuss any such proposed Reserve with the Borrowers); provided that no such prior notice shall be required for (1) changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized (suc...
Reserves; Changes to Reserves. (a) The Inventory Reserves and Availability Reserves as of the Effective Date are as set forth on the initial Borrowing Base Certificate furnished to the Administrative Agent as of the Effective Date.
(b) The Administrative Agent may hereafter establish additional Reserves or change any of the foregoing Reserves, in the exercise of its commercially reasonable business judgment acting in accordance with industry standards for asset based lending in the retail industry, provided that such Reserves shall not be established or changed except upon not less than three (3) Business Days’ notice to the Borrower (during which period the Administrative Agent shall be available to discuss any such proposed Reserve with the Borrower), provided further that no such prior notice shall be required for (1) changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized, or (2) changes to Reserves or establishment of additional Reserves if a Material Adverse Effect has occurred or it would be reasonably likely that a Material Adverse Effect would occur were such Reserve not changed or established, or (3) if a Cash Dominion Event or an Event of Default has occurred and is then continuing. Notwithstanding the foregoing or anything to the contrary herein, the Administrative Agent shall impose the Debt Maturity Reserve.
Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Third Restatement Date are as set forth in the Borrowing Base Certificate delivered pursuant to SECTION 4.01(d).
(b) The Administrative Agent may hereafter establish additional Reserves, or change any of the foregoing Reserves, in the exercise of its Permitted Discretion, provided that such Reserves shall not be established or changed except upon not less than six Business Days’ notice to the Borrowers (during which period the Administrative Agent shall be available to discuss any such proposed Reserve with the Borrowers and the Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such Reserve no longer exists, in a manner and to the extent reasonably satisfactory to the Administrative Agent); provided, further, that no such prior notice shall be required for changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized (such as, but not limited to, rent and Customer Credit Liabilities). The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter that is the basis for the Reserve. Notwithstanding anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Credit Card Receivables, Eligible Inventory, Eligible Letter of Credit, Eligible Retail Inventory, Eligible Wholesale Inventory or Eligible Trade Receivables, or reserves or criteria deducted in computing the Appraised Value of Eligible Inventory or Inventory supported by an Eligible Letter of Credit.
Reserves; Changes to Reserves. (a) The initial Reserves as of the Closing Date are those set forth in the Borrowing Base Certificate delivered to the Administrative Agent on the Closing Date.
(b) Notwithstanding anything contained herein to the contrary, the Administrative Agent may, subject to clause (vi) in the second proviso to Section 13.1, hereafter establish additional Reserves or change any of the Reserves or modify standards of eligibility in effect on the Closing Date to the extent it deems necessary or appropriate in its Permitted Discretion; provided that such Reserves shall not be established or changed except upon not less than five (5) Business Days notice to the Borrowers (during which period the Administrative Agent shall be available to discuss any such proposed Reserve with the Borrowers); provided further that no such prior notice shall be required for (1) changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized, or (2) changes to Reserves or the establishment of additional Reserves if a Material Adverse Effect under clause (b) of the definition thereof has occurred or it would be reasonably likely that a Material Adverse Effect under clause (b) of the definition thereof would occur were such Reserves not changed or established prior to the expiration of such five (5) Business Day period.
Reserves; Changes to Reserves. (a) The initial Reserves as of the date of this Agreement are the following:
Reserves; Changes to Reserves. 28 SECTION 2.03
Reserves; Changes to Reserves. The Administrative Agent may hereafter establish additional Reserves or modify any existing Reserves, in the exercise of its reasonable business judgment acting in accordance with industry standards for asset based lending in the retail industry, provided that such Reserves shall not be established or changed except upon not less than ten (10) Business Days notice to the Borrowers (during which period the Agents shall be available to discuss any such proposed Reserve with the Borrowers).
Reserves; Changes to Reserves. 32 SECTION 2.4 Making of Loans .................................................... 33 SECTION 2.5 Overadvances ....................................................... 34 SECTION 2.6 Swingline Loans .................................................... 34 SECTION 2.7 Letters of Credit .................................................. 35 SECTION 2.8 Settlements Amongst Lenders ........................................ 38 SECTION 2.9 Notes; Repayment of Loans .......................................... 40 SECTION 2.10 Interest on Loans ................................................. 40 SECTION 2.11
Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Effective Date are those set forth in the Borrowing Base Certificate delivered to the Administrative Agent on the Effective Date.
(b) Any Co-Collateral Agent (after consultation with the other Co-Collateral Agent) may hereafter establish additional Reserves or change any of the Reserves in effect on the Effective Date, in the exercise of its reasonable business judgment acting in accordance with industry standards for asset based lending in the retail industry; provided that such Reserves shall not be established or changed except upon not less than five (5) Business Days notice to the Borrowers (during which period the Co-Collateral Agents shall be available to discuss any such proposed Reserve with the Borrowers); provided further that no such prior notice shall be required for (1) changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized (such as, but not limited to, Customer Credit Liabilities), or (2) changes to Reserves or the establishment of additional Reserves if a Material Adverse Effect under clause (b) of the definition thereof has occurred or it would be reasonably likely that a Material Adverse Effect under clause (b) of the definition thereof would occur were such Reserves not changed or established prior to the expiration of such five (5) Business Day period.