Common use of Updated Borrowing Base Clause in Contracts

Updated Borrowing Base. (a) If on any day a Receivable in the Borrowing Base no longer qualifies as an Eligible Receivable because (i) the Expected Net Value of any Receivable is either (x) reduced or adjusted as a result of any defective, rejected, returned, repossessed or foreclosed merchandise, any defective or rejected services, any failure to provide services, any discount, rebate or any other adjustment made or performed by the Borrower or any other Person or (y) reduced or canceled as a result of a setoff in respect of any claim by the Obligor thereof against an Originator or an Affiliate of an Originator, (ii) any of the representations or warranties in Section 4.01(h) is no longer true with respect to such Receivable or the Borrower or the Collection Agent discovers or is notified that such Receivable was not an Eligible Receivable on the day it was included in the Borrowing Base or (iii) for any other reason pursuant to the terms hereunder, the Borrower or the Collection Agent shall recalculate the Borrowing Base as of such day after giving effect to the removal of such Receivable or Receivables from the Borrowing Base calculation; provided, that the Collection Agent and the Borrower shall deliver an updated report with respect to the information in the Monthly Report only to the extent that such reduction, adjustment, cancellation or disqualification would result in a Borrowing Base Deficiency. (b) Promptly after the occurrence of an ENV Event, the Borrower shall deliver to the Administrative Agent a Monthly Report updated as of such day, including a calculation of the Borrowing Base after giving effect to an adjustment to the Contractual Allowances, in an amount approved by the Administrative Agent and the Managing Agents, to reflect such collection experiences. (c) If a Borrowing Base Deficiency exists with respect to the revised Borrowing Base delivered pursuant to clause (a) or (b), then the Borrower shall make a Mandatory Prepayment in accordance with Section 2.07(e).