Common use of Availability Reserve Clause in Contracts

Availability Reserve. 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 at least five (5) Business Days’ prior written notice (which may be by email) to Borrower, which notice shall include a description of such reserve being adjusted or established (during which period Agent shall, if requested, discuss any such reserve or change with Borrower and Borrower may take such action as may be required so that the event, condition or matter that is the basis for such reserve or change no longer exists or exists in a manner that would result in the establishment of a lower reserve or result in a lesser or no change, in each case, in a manner and to the extent reasonably satisfactory to Agent); provided, that, in no event shall such prior notice be required for changes to any reserves resulting solely by virtue of mathematical calculations of the amount of the Availability Reserve in accordance with the methodology of calculation previously utilized. Notwithstanding any other provision of this Agreement to the contrary, (i) the amount of any reserve (or change in reserve) shall (A) have a reasonable relationship to the event, condition or other matter that is the basis for such reserve or change and (B) with respect to dilution reserves, be a reasonable quantification of the incremental dilution of the Borrowing Base attributable to such contributing factors and (ii) in no event shall any reserve (or change in reserve) with respect to any component of the Borrowing Base duplicate any reserve or adjustment already expressly accounted for through eligibility criteria set forth in this Agreement. Agent and Lenders shall not be required to make any Loan or issue any Letter of Credit during any five (5) Business Day notice period set forth in this Section if such Loan or Letter of Credit would result in an Overadvance after giving effect to such implementation of, or change in, reserves.