Common use of Reduction of Advance Rates Clause in Contracts

Reduction of Advance Rates. Lender may, in its discretion, from time to time, upon not less than five (5) days' prior notice to Borrower, reduce the Borrowing Base to the extent that Lender determines in good faith that: (a) the Dilution Rate with respect to the Accounts for any period (based on the ratio of (1) the aggregate amount of reductions in Accounts other than as a result of payments in cash to (2)) the aggregate amount of total sales) has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels; (b) the general creditworthiness of Account Debtors has declined; (c) the number of days of the turnover of the Inventory for any period has changed in any material respect; (d) the liquidation value of the Eligible Inventory, or any category thereof, has decreased; or (e) the nature and quality of the Inventory has deteriorated. In determining whether to reduce the Borrowing Base, Lender may consider events, conditions, contingencies, or risks that are also considered in determining Prime Accounts or Eligible Inventory

Reduction of Advance Rates. Lender may, in its discretionSole Discretion, from time to time, upon not less than five (5) days' ’ prior notice to Borrower, reduce the Borrowing Base to the extent that Lender determines in good faith that: (aa.) the Dilution Rate with respect to the Accounts for any period (based on the ratio of (1i.) the aggregate amount of reductions in Accounts other than as a result of payments in cash to (2)ii.) the aggregate amount of total sales) has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels; (bb.) the general creditworthiness of Account Debtors has declined; (cc.) the number of days of the turnover of the Inventory for any period has changed in any material respect; (dd.) the liquidation value of the Eligible Inventory, or any category thereof, has decreased; or (ee.) the nature and quality of the Inventory has deteriorated. In determining whether to reduce the Borrowing Base, Lender may consider events, conditions, contingencies, or risks that are also considered in determining Prime Accounts or Eligible Inventory.

Reduction of Advance Rates. Lender may, in its discretion, from time to time, upon not less than five (5) days' ’ prior notice to Borrower, reduce the Borrowing Base to the extent that Lender determines in good faith that: (a) the Dilution Rate with respect to the Accounts for any period (based on the ratio of (1) the aggregate amount of reductions in Accounts other than as a result of payments in cash to (2)) the aggregate amount of total sales) has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels; (b) the general creditworthiness of Account Debtors has declined; (c) the number of days of the turnover of the Inventory for any period has changed in any material respect; (d) the liquidation value of the Eligible Inventory, or any category thereof, has decreased; or (e) the nature and quality of the Inventory has deteriorated. In determining whether to reduce the Borrowing Base, Lender may consider events, conditions, contingencies, or risks that are also considered in determining Prime Accounts or Eligible Inventory

Reduction of Advance Rates. Lender may, in its discretionSole Discretion, from time to time, upon not less than five (5) days' ’ prior notice to Borrower, reduce the Borrowing Base to the extent that Lender determines in good faith that: (aa.) the Dilution Rate with respect to the Accounts for any period (based on the ratio of (1i.) the aggregate amount of reductions in Accounts other than as a result of payments in cash to (2)ii.) the aggregate amount of total sales) has increased in any material respect or may be reasonably anticipated to increase in any material respect above historical levels; (bb.) the general creditworthiness of Account Debtors has declined; (cc.) the number of days of the turnover of the Inventory for any period has changed increased in any material respect; (dd.) the liquidation value of the Eligible Inventory, or any category thereof, has decreased; or (ee.) the nature and quality of the Inventory has deteriorated. In determining whether to reduce the Borrowing Base, Lender may consider events, conditions, contingencies, or risks that are also considered in determining Prime Accounts or Eligible Inventory.