Common use of Reserves; Changes to Reserves Clause in Contracts

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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Second 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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Restatement Effective Closing 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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Restatement Effective Date date of this Agreement are the following: (i) The reserve Shrink (an Inventory Reserve), if any, referenced in clause ): An amount equal to one-half of one percent (b)(ii)(B0.50%) of the definition gross sales of Eligible Inventorythe Borrowers for the fiscal year to date or determined based on such other methodology as the Lead Borrower and the Administrative Agent may agree. The percentage of gross sales to be reserved hereunder may be adjusted by the Administrative Agent based upon the results of any physical inventory undertaken by the Borrowers in accordance with the provisions of Section 2.03(b) hereof. (ii) A reserve Rent (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 ): An amount equal to all past due two months rent for all of the Borrowers’ ' leased locations in the states of Virginia, Pennsylvania, Washington and other states in which Applicable Law provides a landlord with a Lien for unpaid rent having priority over the Lien of the Collateral Agent, other than leased locations with respect to which the Administrative Collateral Agent has received a landlord's waiver of lien in form reasonably satisfactory to the Collateral Access Agreement, plus Agent or the applicable lease contains such a waiver in form reasonably satisfactory to the Collateral Agent. (Biii) Layaways (an Availability Reserve): An amount equal to all past due rent for all 100% of the Borrowers’ distribution centers or warehouses, other than distribution centers or warehouses with respect to which the Administrative Agent received a Collateral Access Agreementcustomer deposits made for layaway goods. (iv) A reserve Customer Credit Liabilities (an Availability Reserve) for so long as any Swap Contract is in effect in an ): 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 50% of the Loan Documents, Borrowers' Customer Credit Liabilities as reflected 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 judgmentBorrowers' books and records. (b) The Administrative Agent may hereafter establish additional Reserves or change any of the foregoing Reserves, in the exercise of its the reasonable business judgment acting in accordance with industry standards for asset based lending in of the food and tobacco distribution industry. The amount of any Reserve established by Administrative Agent after furnishing ten (10) days prior notice to the Lead Borrower , provided that the Administrative Agent shall have a reasonable relationship not modify the methodology in which Reserves described in Section 2.03(a) hereof are determined from time to time, and further provided that in no event shall the Administrative Agent establish new Reserves in any fiscal quarter in an aggregate amount in excess of ten percent (10%) of the Borrowing Base (as set forth in the most recent Borrowing Base Certificate delivered 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 Administrative Agent under Section 5.01(f) of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventorythis Agreement).

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 Return to Vendor (an Inventory Reserve), if any, referenced ): An amount equal to the Cost of Inventory for which vendors are to furnish credit to the Borrower Affiliated Group as reflected in clause (b)(ii)(B) of the definition of Eligible InventoryBorrower Affiliated Group’s books and records from time to time. (ii) A reserve Shrink (an Availability Inventory Reserve) ): An amount equal to the one month accrual for certain Environmental Liabilities Shrink reflected in an amount determined by the Administrative Agent in its reasonable business judgmentBorrower Affiliated Group’s books and records from time to time. (iii) A reserve Defective and Refurbishment Parts (an Inventory Reserve): An amount equal to the amount of defective goods and goods at the refurbishment center for repair reflected in the Borrower Affiliated Group’s books and records from time to time. (iv) Internal Warranties (an Inventory Reserve): An amount equal to the amount of internal warranties reflected in the cost of the Borrower Affiliated Group’s Inventory from time to time. (v) Customer Credit Liabilities (an Availability Reserve) in (A) an ): An amount equal to all past due rent for all 30% of the amount of gift certificates and merchandise credits reflected in the Borrower Affiliated Group’s books and records from time to time. (vi) Customer Deposits (an Availability Reserve): An amount equal to 30% of the outstanding customer deposits held by the Borrowers as reflected in the Borrowers’ leased books and records. (vii) Rent (an Availability Reserve): An amount equal to one month’s rent for each location in the States of Pennsylvania, Virginia, Washington and any other state which provides a lien for landlords which may have priority over the Agent’s Lien (except for those locations other than leased locations with respect to for 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 Agreement satisfactory in effect in an amount equal form to the Swap Termination Value of such Swap Contract (calculated substantially on a net basis for all such Swap ContractsAgent). (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 hereafter, on three (3) Business Days written notice to the Lead Borrower, establish additional Reserves or change any of the foregoing Reserves, in the exercise of its reasonable business judgment acting the Permitted Discretion of the Agent (provided that no such prior notice shall be required if a Cash Dominion Event exists or for (1) changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with industry standards for asset based lending in the food methodology of calculation previously utilized (such as, but not limited to, Rent and tobacco distribution industry. The amount Customer Credit Liabilities), or (2) changes to Reserves or establishment of any additional Reserves if a Material Adverse Effect has occurred or it would be reasonably likely that a Material Adverse Effect to the Lenders would occur were such Reserve not changed or established by prior to the Administrative expiration of such three (3) Business Day period); provided, however, that as long as no Event of Default then exists and is continuing, the Agent shall have a reasonable relationship not modify the methodology in which Reserves described in Section 2.2(a) hereof are determined from time 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 Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventorytime.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Third 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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Fifth 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. (ix) Canadian Priority Payables Reserves. (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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory. Any of the foregoing to the contrary notwithstanding, the Administrative Agent may (in the exercise of its reasonable discretion) refrain from implementing certain Reserves relating to Acquired Accounts (CM) and Acquired Inventory (CM) until such time as the Administrative Agent has completed its diligence with respect to such Acquired Borrowing Base Assets.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Restatement Effective Date date of this Agreement 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 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 Reserve in an amount equal to the Swap Termination Value outstanding Indebtedness under the Note Purchase Agreement and the Purchaser Notes, including, principal, interest, fees, and make-whole or prepayment premium (whether or not then due). (ii) An Availability Reserve in an amount equal to three months rent for each of such Swap Contract the Borrower’s locations in the State of Washington and in any other jurisdiction in which the landlord may have a Lien under Applicable Law having priority over the Lien of the Collateral Agent. (calculated substantially on a net basis iii) An Availability Reserve in an amount equal to 50% of the Borrower’s Gift Certificates and Merchandise Credit Liabilities from time to time outstanding. (iv) An Availability Reserve for all such Swap Contracts)customs, duties and other costs in an amount equal to 11.4% of the Borrower’s Inventory in transit. (v) A reserve (an Availability Reserve) An Inventory Reserve for royalties payable Shrink in an amount determined by equal to the Shrink reserve on the books and records of the Borrower from time to time, plus the Shrink Percentage of the Borrower’s sales from the date of the last Borrowing Base Certificate for the period as of the end of a Fiscal Quarter until the delivery of the subsequent Fiscal Quarter end Borrowing Base Certificate setting forth such updated Shrink reserve on the Borrower’s books and records. As used herein, the term “Shrink Percentage” shall mean initially 2.01% and thereafter shall be adjusted at the end of each of the Borrower’s Fiscal Quarters based upon the actual Shrink of the Borrower for the preceding four Fiscal Quarters ending on each such quarterly adjustment date. Further, upon the Borrower’s implementation of a perpetual inventory system reasonably acceptable to the Administrative Agent in its reasonable business judgment. (vi) A reserve (an Availability Reserve) for (A) claims under PACAAgent, the Food Security Act Inventory Reserve for Shrink shall be eliminated as long as an accurate reserve for Shrink is maintained on the Borrower’s books and the Packers and Stockyards Act and (B) Permitted Liens (including Liens arising from claims under PACA) on any Eligible Accountsrecords, Eligible In-Transit Inventory, Eligible Inventory, Eligible Real Property and Eligible Rolling Stock that are prior to the Liens of the Loan Documents, which is calculated in each case in an amount determined by the Administrative Agent in its reasonable business judgmenta manner consistent with past practices. (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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Fifth 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 anything herein to the contrary, Reserves shall not duplicate eligibility criteria contained in the definition of Eligible Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventory.

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 Shrink Reserve (an Inventory Reserve), if any, referenced ): In an amount equal to the percentage of Shrink determined in clause (b)(ii)(B) the physical inventory undertaken in connection with the preparation of the definition audited financial statements for the previous Fiscal Year multiplied by the sales of Eligible Inventorythe Loan Parties for the current Fiscal Year through the date of calculation. (ii) A reserve Pre-Receipts Reserve (an Availability Inventory Reserve) for certain Environmental Liabilities in ): In an amount determined by equal to all soft line Inventory which is added to the Administrative Agent in its reasonable business judgmentLoan Parties’ stock ledger upon receipt of an Automatic Shipping Notice (ASN) from the freight forwarder. (iii) A reserve LCM Reserve (an Inventory Reserve): In an amount equal to the lower of Cost or market value for Inventory of the Loan Parties that has a retail value below average Cost value. (iv) Landlord Lien Reserve (an Availability Reserve) in (A) an ): An amount equal to all past due two (2) months’ rent for all of the Borrowers’ leased locations in each Landlord Lien State, other than leased locations with respect to which the Administrative Agent has Agents have received a Collateral Access Agreementlandlord’s waiver or subordination of lien in form reasonably satisfactory to the Agents; (v) Customer Credit Liabilities (an Availability Reserve): As of any date, plus (B) an amount equal to (A) forty-five percent (45%) of the Customer Credit Liabilities minus (B) dormancy fees, each as reflected in the Borrowers’ books and records; (vi) Landing Costs (an Availability Reserve): An amount equal to all past due customs, duty, freight and other landing costs for Inventory not yet paid; (vii) GFS Liability (an Availability Reserve): An amount equal to the aggregate remaining balance at such time of outstanding customer deposits of the Loan Parties for special order or pre-sale Inventory; (viii) Canadian Landlord Lien Reserve (an Availability Reserve against the Canadian Borrowing Base): An amount equal to two (2) months’ rent for all of the Borrowers’ distribution centers or warehousesCanadian leased locations, other than distribution centers or warehouses leased locations with respect to which the Administrative Canadian Agent has received a Collateral Access Agreement.landlord’s waiver or subordination of lien in form reasonably satisfactory to the Agents and the Canadian Agent; and (ivix) A reserve Canadian Real Estate Taxes Reserve (an Availability Reserve) for so long as any Swap Contract is in effect in an Reserve against the Canadian Borrowing Base): 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 Canadian real estate taxes accrued but not paid by the Administrative Loan Parties, calculated quarterly. Any Co-Collateral Agent in its reasonable business judgment. (viafter consultation with the other Co-Collateral Agent) 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 retail industry. The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter ; provided that is the basis for the Reserve. Notwithstanding anything herein to the contrary, such Reserves shall not duplicate eligibility criteria contained 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 Eligible Inventory the definition thereof would occur were such Reserves not changed or reserves or criteria deducted in computing established prior to the NOLV Percentage expiration of Eligible Inventorysuch five (5) Business Day period.

Reserves; Changes to Reserves. (a) The initial Inventory Reserves and Availability Reserves as of the Fourth Restatement Effective Date date of this Agreement are the following: (i) The reserve Return to Vendor (an Inventory Reserve), if any, referenced ): An amount equal to the Cost of Inventory for which vendors are to furnish credit to the Loan Parties as reflected in clause (b)(ii)(B) of the definition of Eligible InventoryLoan Parties’ books and records from time to time. (ii) A reserve Shrink (an Availability Inventory Reserve) ): An amount equal to the one month accrual for certain Environmental Liabilities Shrink reflected in an amount determined by the Administrative Agent in its reasonable business judgmentLoan Parties’ books and records from time to time. (iii) A reserve Defective and Refurbishment Parts (an Availability Inventory Reserve) in (A) an ): An amount equal to all past due rent the amount of defective goods and goods at the refurbishment center for all of repair reflected in the BorrowersLoan Parties’ leased locations other than leased locations with respect books and records from time 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 Agreementtime. (iv) A reserve Internal Warranties (an Availability Inventory Reserve) for so long as any Swap Contract is in effect in an ): An amount equal to the Swap Termination Value amount of such Swap Contract (calculated substantially on a net basis for all such Swap Contracts)internal warranties reflected in the cost of the Loan Parties’ Inventory from time to time. (v) A reserve Customer Credit Liabilities (an Availability Reserve) for royalties payable ): An amount equal to 30% of the amount of gift certificates and merchandise credits reflected in an amount determined by the Administrative Agent in its reasonable business judgmentLoan Parties’ books and records from time to time. (vi) A reserve Rent (an Availability Reserve) ): An amount equal to one months rent for each location in the States of Pennsylvania, Virginia, Washington and any other state which provides a lien for landlords which may have priority over the Collateral Agent’s Lien (A) claims under PACA, except for those locations for which 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 Agents have received a landlord’s waiver satisfactory in form 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 judgmentAgents). (b) The Administrative Agent may hereafter hereafter, on five (5) Business Days written notice to the Lead Borrower, establish additional Reserves or change any of the foregoing Reserves, in the exercise of its reasonable business judgment acting the Permitted Discretion of the Administrative Agent; provided, however, that in accordance with industry standards for asset based lending no event shall the Administrative Agent establish new Reserves in any thirty day period in an aggregate amount in excess of ten percent (10%) of the Borrowing Base (as set forth in the food most recent Borrowing Base Certificate delivered to the Administrative Agent under Section 5.1(e) of this Agreement); and tobacco distribution industry. The amount of any Reserve established by provided further that the Administrative Agent shall have a reasonable relationship not modify the methodology in which Reserves described in Section 2.3(a) hereof are determined from time 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 Inventory or reserves or criteria deducted in computing the NOLV Percentage of Eligible Inventorytime.