Ineligible Inventory Clause Samples
The Ineligible Inventory clause defines which items in a borrower's inventory are excluded from being counted as collateral for a loan or credit facility. Typically, this clause specifies certain categories of inventory—such as obsolete, damaged, slow-moving, or consigned goods—that do not meet the lender's criteria for acceptable collateral. By clearly outlining what inventory is ineligible, the clause helps ensure that the lender's risk is minimized and that only reliable, liquid assets are considered when determining borrowing capacity.
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Ineligible Inventory. In addition to any Inventory which does not meet the foregoing criteria, the following Inventory is also ineligible for the purposes of determination of the Borrowing Base:
(1) Fixtures and displays representing display racks sold to customers to hold and display products of Borrower;
(2) Discontinued products;
(3) Inventory located at third party vendors;
(4) Proprietary packaging materials that include the name of the client or which are not of standard size.
Ineligible Inventory. Ineligible Inventory shall include the following:
Ineligible Inventory. Ineligible Inventory shall include the following:
(a) Inventory not legally owned by Borrower, including but not be limited to, goods on consignment from any supplier, vendor, and/or individual, or goods on demonstration and/or for trial, and not subject to the first lien priority security interest in favor of Bank.
(b) Inventory not in new and/or salable condition, including but not limited to, damaged goods, goods used by Borrower and/or potential buyers, goods with missing components/parts and not in a whole condition.
(c) Inventory which has been held by Borrower more than N/A months without being sold and/or leased.
(d) Inventory representing work-in-process unless authorized by Bank pursuant to DD.02(c).
(e) Inventory deemed by Bank, at its sole discretion, to cause and/or represent unusual danger to the health and/or safety of individual(s) and/or the environment.
(f) inventory which violates any federal law and/or laws of the city, county, or state where the goods are stored.
(g) Inventory of which Borrower is the legal owner but which is being stored and/or housed at a location other than the place of business of Borrower.
(h) Inventory deemed otherwise ineligible by Bank in its sole discretion.
(i) Inventory subject to a security interest, lien or other encumbrance in favor of any other Person. Bank reserves the right, upon notice, in its sole discretion, to amend the terms of the Ineligible Inventory at anytime.
Ineligible Inventory. Ineligible Inventory shall include the following: Inventory not legally owned by Borrower, including but not be limited to, goods on consignment from any supplier, vendor, and/or individual, or goods on demonstration and/or for trial, and not subject to the first lien priority security interest in favor of Bank. Inventory not in new and/or salable condition, including but not limited to, damaged goods, goods used by Borrower and/or potential buyers, goods with missing components/parts and not in a whole condition. Inventory which has been held by Borrower more than 12 months without being sold and/or leased. Inventory representing work-in-process unless authorized by Bank pursuant to DD.02(c) and/or (d). Inventory deemed by Bank, at its sole discretion, to cause and/or represent unusual danger to the health and/or safety of individual(s) and/or the environment. Inventory which violates any federal law and/or laws of the city, county, or state where the goods are stored. Inventory of which Borrower is the legal owner but which is being stored and/or housed at a location other than the place of business of Borrower or in transit (unless otherwise approved by Bank in writing including conditions thereof) or is otherwise authorized as set forth hereinabove in Section DD.02(c) and/or (d). Inventory deemed otherwise ineligible by Bank in its sole discretion. Inventory subject to a security interest, lien or other encumbrance in favor of any other Person. Inventory, if Export-Related Inventory, unless such Inventory is eligible pursuant to a duly executed Loan Authorization Agreement issued by the Small Business Administration of the United States Government in favor of Bank, or such Inventory is eligible pursuant to a duly executed Borrower Agreement issued by the Export-Import Bank of the United States in favor of Bank, or such Inventory is otherwise expressly approved in writing by Bank. Inventory determined by Bank to be Excess Inventory. Inventory subject to a License Agreement for which Bank shall have required in writing a Licensor/Bank Agreement and such agreement shall not have been obtained. Bank reserves the right, upon notice, in its sole discretion, to amend the terms of the Ineligible Inventory at any time.
Ineligible Inventory. (a) is not finished goods, work-in-process or raw materials; or is packaging or shipping materials, labels, samples, display items, bags, replacement parts or manufacturing supplies $__________
(b) is held on consignment or subject to any deposit or downpayment $__________
(c) is not in new and saleable condition; or is damaged, defective, shopworn or otherwise unfit for sale $__________
(d) is slow-moving, obsolete or unmerchantable; or constitutes returned or repossessed goods $__________ (e) does not meet all standards imposed by any Governmental Authority having regulatory authority over such item of Inventory or its use or sale; or constitutes hazardous materials under any Environmental Law $__________
Ineligible Inventory. (i) that is not subject to a valid, perfected first priority Lien in favor of the Lender or is subject to a security interest in favor of any Person other than the Lender;
(ii) that is located at an address that has not been approved by the Lender in writing;
(iii) that is placed by the Borrower on consignment or held by the Borrower on consignment from another Person;
(iv) that is in-transit, covered by any negotiable or non-negotiable warehouse receipt, ▇▇▇▇ of lading or other document of title; in the possession of a processor or bailee, or located on premises leased or subleased to the Borrower, or on premises subject to a mortgage in favor of a Person other than the Lender, unless such processor or bailee or mortgagee or the lessor or sublessor of such premises, as the case may be, has executed and delivered all documentation which the Lender shall require to evidence the subordination or other limitation or extinguishment of such Person’s rights with respect to such Inventory and the Lender’s fight to gain access thereto;
(v) that is produced in violation of the Fair Labor Standards Act or subject to the “hot goods” provisions contained in 29 U.S.C. § 215 or any successor statute or section;
(vi) as to which any covenant, representation or warranty with respect to such Inventory contained in the Loan Documents has been breached;
Ineligible Inventory. Rent Reserve and other adjustments*
Ineligible Inventory. Without the prior written approval of the Purchaser, take any action to cause, or which would permit, any item of Eligible Inventory to cease to be Eligible Inventory, except (a) as otherwise expressly provided by this Agreement or (b) unless the ineligibility of such Purchased Inventory will be reasonably expected not to have a Material Adverse Collateral Effect.
Ineligible Inventory. Ineligible Inventory shall include the following:
(a) Goods not legally owned by the Borrower, to include, but not be limited to goods on consignment from any supplier, vendor, and/or individual(s), goods on demonstration and/or for trial.
(b) Goods not in new and/or salable condition to include, but not limited to damaged goods, goods used by Borrower and/or potential buyers, goods with missing components/parts and not in a whole condition.
(c) Goods which have been held by the Borrower for sale or lease more than months without being sold and/or leased.
(d) Goods representing work-in-process.
(e) Goods deemed by the Bank, at its discretion, to cause and/or represent unusual danger to the health and/or safety of individual(s) and/or the environment.
(f) Any goods held for sale and/or lease which violate any laws of the city, county, or state where the goods are stored, or any federal law in effect.
(g) Goods of which the Borrower is the legal owner but which are being stored and/or housed at a location other than the place of business of the Borrower.
(h) Any goods deemed otherwise ineligible by Bank at its discretion.
Ineligible Inventory. Inventory not consisting of finished goods: $ Inventory in transit from abroad (except as permitted under the Credit Agreement): $ : Damaged or defective inventory: $ Other ineligible inventory (specified below): $ Total Ineligible Inventory $