Common use of Establishment of Reserves Clause in Contracts

Establishment of Reserves. Secured Party may, at any time and from time to time, in its reasonable judgment, establish reserves against the Receivables or the Inventory of Debtor. The amount of such reserves shall be subtracted from the Receivables Borrowing Base or Inventory Borrowing Base, as applicable, when calculating the amount of the Borrowing Capacity. Subject to the provisions contained in Section 8.9 herein, if Secured Party shall establish such reserve, then Debtor shall have the right to prepay in full the total outstanding balance owing to Secured Party under this Agreement without penalty, notwithstanding the provisions contained in Section 14.13(b) herein; provided, however, there shall not have occurred an Event of Default.