Inventory Reserves Clause Samples
The Inventory Reserves clause establishes how a company accounts for potential losses or reductions in the value of its inventory. It typically requires the company to set aside a financial reserve to cover items that may become obsolete, damaged, or unsellable, ensuring that the reported value of inventory on financial statements is realistic. By mandating these reserves, the clause helps prevent overstatement of assets and provides a more accurate picture of the company's financial health, thereby protecting stakeholders from unexpected losses.
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Inventory Reserves such reserves as may be established from time to time by the Administrative Agent in the Administrative Agent’s reasonable discretion with respect to the determination of shrink, the saleability, at retail, of the Eligible Inventory, decreases in cumulative ▇▇▇▇-ups from historical or industry norms, or which reflect such other factors as affect the market value of the Eligible Inventory. Investment - any (a) acquisition of all or substantially all assets of, or any line of business or division of, a Person; (b) acquisition of record or beneficial ownership of any Capital Stock of a Person; (c) loan, advance or capital contribution to, guarantee or assumption of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor guarantees Debt of such other Person, or (d) other investment in a Person. Investment Property - as defined in the UCC. Issuing Bank - with respect to (a) the US Borrower, each of Bank of America and ▇▇▇▇▇ Fargo Bank, National Association, in its capacity as issuer of Letters of Credit for the account or benefit of the US Borrower hereunder and, (b) the Canadian Borrower, each of Bank of America-Canada Branch and ▇▇▇▇▇ Fargo Foothill Canada ULC, in its capacity as issuer of Letters of Credit for the account or benefit of the Canadian Borrower hereunder or, in each case, any permitted successor issuer of Letters of Credit hereunder and (c) such other financial institution designated in writing by the Administrative Agent in its reasonable discretion to issue one or more Letters of Credit hereunder for the Borrowers’ account. Issuing Bank Indemnitees - the Issuing Banks and their officers, directors, employees, Affiliates, branches, agents, advisors and attorneys. ITA – the Income Tax Act (Canada), as the same may be amended from time to time, and any regulation promulgated thereunder. Joint Venture - a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form; provided that in no event shall any Subsidiary of any Person be considered to be a Joint Venture to which such Person is a party. LC Application - an application by a Borrower to an Issuing Bank for issuance of a Letter of Credit, in form and substance reasonably satisfactory to such Issuing Bank. LC Documents - all documents, instruments and agreements (i...
Inventory Reserves. The amount of any reserve established by Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve (or increase thereof) as determined by Agent in good faith.
Inventory Reserves. (A) 100% of the Cost of all Eligible Inventory located at any location the landlord of which has been granted a security interest in the personal property of any Borrower, which landlord has not subordinated to the security interests created herein by an instrument which is reasonably satisfactory to the Lender.
(B) Return to vendor and damaged goods.
(C) Discrepancy store Inventory.
(D) Shrinkage, initially in the amount of $50,000.00 plus 1.2% of the Borrowers' retail sales since the date of the last physical inventory, assuming the physical to book adjustment has been made.
Inventory Reserves. (A) The Cost of the Borrowers' Inventory located at any "return center" maintained by the Borrower.
Inventory Reserves. Except as set forth in Section 5.21 of the Disclosure Schedule, all inventory of each Company, whether or not reflected in the Financial Statements, (a) was acquired and has been maintained in the Ordinary Course of Business, (b) consists of items of a quality and quantity usable and, with respect to finished goods, no material amount is not saleable in the Ordinary Course of Business, (c) is located at the Real Property or is in transit to the Real Property, (d) is not obsolete, damaged or defective, and (e) is not held on consignment for a third party.
Inventory Reserves. Such reserves as may be established from time to time by the Administrative Agent in the Administrative Agent's discretion with respect to the determination of shrink, the saleability, at retail, of the Eligible Inventory, decreases in cumulative ▇▇▇▇-ups from historical or industry norms, or which reflect such other factors as affect the market value of the Eligible Inventory.
Inventory Reserves. As of the Effective Date, the following Inventory Reserves shall be implemented in the corresponding amounts:
(i) Shrink: In an amount to be determined by the Lender from time to time, but in no event less than $50,000.00 at any time.
(ii) Borrower's Codes: 961—Delia's Outlet Liquidations $ 227,490 962—Delia's Premier Liquidations $ 684,048 971—Delia's Outlet RTV $ 2,858 972—Delia's Premier RTV $ 64,037 981—Delia's Premier Damages $ 173,824 982—Delia's Outlet Damages $ 0.00 991—Outlet Discrepancy Store $ 0.00 992—Premier Discrepancy Store $ 3,503 998—Dummy Store $ 0.00 000—Distribution Warehouse $ 0.00 010—Event Sale Warehouse $ 0.00 The Lender reserves its right as set forth under the Loan Agreement to increase the amounts of the foregoing Reserves, or to establish additional Reserves, in the Lender's sole and exclusive discretion. Any such increase to an existing Reserve or establishment of a new Reserve shall take effect upon the next Business Day after receipt by the borrower of written notice thereof from the Lender.
Inventory Reserves. The Business recognizes Inventory reserves for excess and obsolete Inventory, aged WIP and other Inventory reserves. Reserve for excess and obsolete Inventory - The reserve for excess and obsolete Inventory is based on historical Inventory usage and not future forecasted usage, except for the locations that have historically used Materials Resource Planning (“MRP”) quantities to calculate Inventory reserves. As an example of the reserve calculations performed, the Inventory excess and obsolete Inventory reserve methodology for the Diodes, GaAs Sige, Components, PHO and Laser Diodes product lines have been described below and outlined in Annexes 1 to 4. The reserve for excess and obsolete Inventory for the Diodes and GaAs Sige product lines of M/A-COM Technology Solutions Inc. (“MTS”) are calculated by (i) determining the period of last activity for a part number followed by (ii) calculating the last twelve months usage for the part number followed by (iii) calculating the current Inventory in stock for the part number followed by (iv) subtracting the last twelve months usage from the current Inventory in stock for the part number and then multiplying by the percentage provision which is listed in the table below. The Components product line includes an excess and obsolete reserve for standard parts and custom parts as outlined in Annex 4. The reserve for excess and obsolete Inventory for standard parts in the Components product line is calculated by (i) determining the last three month usage of a part number (multiplied by four) followed by (ii) calculating the annualized Inventory usage based on the last three month usage of a part number followed by (iii) calculating the current Inventory in stock for the part number followed by (iv) calculating the surplus quantity by subtracting the annualized Inventory usage from the current Inventory in stock for the part number and multiplying by a 100% provision. The excess and obsolete Inventory for custom parts in Components is calculated by (i) determining the current Inventory in stock for the custom part number followed by (ii) determining the total required Inventory quantity for the custom part number based on the MRP requirement followed by (iii) calculating the surplus quantity by subtracting the MRP requirement from the current Inventory in stock for the part number and multiplying by a 100% provision. In addition, a reserve for parts on order in Components is calculated by (i) determining the quantity of...
Inventory Reserves. A reserve for shrinkage, initially set at $100,000.00 and increased, on the first day of each month, by 0.8% of the year to date sales until the Borrower's inventory is relieved to reflect the results of a physical inventory (at which time, the Reserve shall be relieved and likewise begin to accrete).
Inventory Reserves. A reserve for shrinkage, subject to change (on seven (7) days notice to the Borrowers' Representative) to align with historic levels, and initially set as follows:
(A) Shoe Division Inventory: $1.0 Million at Retail and.
(B) Apparel Division Inventory: $1.5 Million at Retail.