Common use of Qualified Inventory Clause in Contracts

Qualified Inventory. Upon delivery to the Agent of each Schedule of Inventory, the Agent shall make a determination, in its sole discretion, as to which Inventory listed thereon shall be deemed Qualified Inventory. Inventory shall not be considered Qualified Inventory unless the Agent determines, in its sole discretion, that such Inventory has met the following minimum requirements: the Inventory is either (a) finished goods (b) raw materials other than supplies or (c) work-in-process; but excluding in all cases any goods which have been shipped, delivered, sold by, purchased by or provided to a Borrower on a xxxx and hold, consignment sale, guaranteed sale, or sale or return basis, or any other similar basis or understanding other than an absolute sale and also excluding all supplies; the Inventory is new, of good and merchantable quality, and represents no more than a twelve (12) month supply of such finished goods or raw materials; the Inventory is located in the pipeline owned by Kiantone or any other Borrower, or in the Enbridge Pipeline if such Inventory meets the additional requirements for Qualified Enbridge Pipeline Inventory as identified in the definition of Qualified Inventory, or in storage tanks, or, during the Retail Assets Perfection Period, at a retail store located on a site owned by a Borrower or leased by a Borrower if the landlord has executed a landlord’s waiver in the form of Exhibit 1.1(Q)(ii) hereto; the Inventory is not stored with a bailee, warehouseman, consignee or similar party unless the Agent has given its prior written consent and a Borrower has caused such bailee, warehouseman, consignee or similar party to issue and deliver to the Agent, in the form of Exhibit 1.1(Q)(ii) hereto, warehouse receipts or similar type documentation therefor in the Agent’s name, or such party shall have executed and delivered to Agent a waiver and access agreement, in form and substance satisfactory to Agent; the Inventory is subject to the Agent’s and the Banks’ Prior Security Interest and is not subject to any other Lien; provided, however, Liens on Qualified Enbridge Pipeline Inventory in favor of Enbridge are permitted to the extent that Enbridge has required and received cash collateral, a letter of credit or other credit support in an amount determined by Enbridge; the Inventory has not been manufactured in violation of any federal minimum wage or overtime laws, including, without limitation, the Fair Labor Standards Act, 29 U.S.C. § 215(a)(1); and the Inventory has not been attached, seized, levied upon or subjected to a writ or distress warrant, or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within ten (10) days thereafter, provided that such 10-day grace period shall apply only if the amount of Inventory affected thereby does not exceed $2,500,000. the Inventory is not covered by a negotiable document of title, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and the Banks; the Inventory is not unsalable, defective or otherwise unfit for sale; the Inventory does not consist of display items or packing or shipping materials, or replacement parts; the Inventory is (or upon completion of processing will be) of a type held for sale in the ordinary course of Borrowers’ business; Notwithstanding the qualification standards specified above, upon prior notice to the Borrowers, the Agent may at any time or from time to time revise such qualification standards in the exercise of its reasonable credit judgment. Level I Greater than $50,000,000 negative (.50%) 1.25 % 1.25 % Level II Greater than $30,000,000 but less than or equal to $50,000,000 negative (.25%) 1.50 % 1.50 % Level III Less than or equal to $30,000,000 0.00% 1.75 % 1.75 % For purposes of determining the Applicable Margin and the Letter of Credit Fee:

Qualified Inventory. Upon delivery to the Administrative Agent of each Schedule of Inventory, the Administrative Agent shall make a determination, in its sole discretionReasonable Credit Judgment, as to which Inventory listed thereon shall be deemed Qualified Inventory. Inventory shall not be considered Qualified Inventory unless the Administrative Agent determines, in its sole discretionReasonable Credit Judgment, that such Inventory has met the following minimum requirements: : (i) the Inventory is either (a) finished goods (b) raw materials other than supplies or (c) work-in-process; but excluding in all cases any goods which have been shipped, delivered, sold by, purchased by or provided to a Borrower on a xxxx and hold, consignment sale, guaranteed sale, or sale or return basis, or any other similar basis or understanding other than an absolute sale and also excluding all supplies; the Inventory is new, of good and merchantable quality, and represents no more than a twelve ; (12ii) month supply of such finished goods or raw materials; if the Inventory is located on leased premises, upon the request of the Administrative Agent, a Landlord’s Waiver in form acceptable to the pipeline owned by Kiantone Administrative Agent, shall be provided to the Administrative Agent or any other Borrower, or in the Enbridge Pipeline if such Inventory meets may at the additional requirements for Qualified Enbridge Pipeline Inventory as identified in the definition of Administrative Agent’s discretion be excluded from Qualified Inventory, or in storage tanks, or, during the Retail Assets Perfection Period, at a retail store located on a site owned by a Borrower or leased by a Borrower ; (iii) if the landlord has executed a landlord’s waiver in the form of Exhibit 1.1(Q)(ii) hereto; the Inventory is not stored with a bailee, warehouseman, consignee or similar party unless party, upon the Agent has given its prior written consent and a Borrower has caused such bailee, warehouseman, consignee or similar party to issue and deliver to request of the Administrative Agent, in the form of Exhibit 1.1(Q)(ii) hereto, warehouse receipts or similar type documentation therefor in the Administrative Agent’s name, or such party shall have executed and delivered to Agent a waiver and access agreement, in form and substance satisfactory acceptable to the Administrative Agent; , shall be provided to the Administrative Agent or such Inventory may at the Administrative Agent’s discretion be excluded from Qualified Inventory; (iv) the Inventory is subject to the Administrative Agent’s and the BanksLenders’ Prior Security Interest and is not subject to any other Lien; provided, however, Liens on Qualified Enbridge Pipeline Inventory except as set forth in favor of Enbridge are permitted to the extent that Enbridge has required and received cash collateral, a letter of credit or other credit support in an amount determined by Enbridge; Intercreditor Agreement; (v) the Inventory has not been manufactured in violation of any federal minimum wage or overtime laws, including, without limitation, the Fair Labor Standards Act, 29 U.S.C. § 215(a)(1); and the Inventory has not been attached, seized, levied upon or subjected to a writ or distress warrant, or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within ten and (10vi) days thereafter, provided that such 10-day grace period shall apply only if the amount of Inventory affected thereby does not exceed $2,500,000. the Inventory is not, and should not covered by a negotiable document of titlebe, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and the Banks; the Inventory is not unsalable, defective or otherwise unfit disqualified for sale; the Inventory does not consist of display items or packing or shipping materials, or replacement parts; the Inventory is (or upon completion of processing will be) of a type held for sale any other reason generally accepted in the ordinary course of Borrowers’ commercial finance business; . Notwithstanding the qualification standards specified above, upon prior notice to the BorrowersLoan Parties, the Administrative Agent may at any time or from time to time revise such qualification standards or, in the exercise of its reasonable credit judgment. Level I Greater than $50,000,000 negative (.50%) 1.25 % 1.25 % Level II Greater than $30,000,000 but less than or equal Reasonable Credit Judgment, determine that certain Inventory is not eligible to $50,000,000 negative (.25%) 1.50 % 1.50 % Level III Less than or equal to $30,000,000 0.00% 1.75 % 1.75 % For purposes of determining the Applicable Margin and the Letter of Credit Fee:be Qualified Inventory

Qualified Inventory. Upon delivery to the Administrative Agent of each Schedule of Inventory, the Administrative Agent shall make a determination, in its sole discretion, as to which Inventory listed thereon shall be deemed Qualified Inventory. Inventory held by any Loan Party shall not be considered Qualified Inventory unless the Administrative Agent determines, in its sole discretion, that such Inventory has met the following minimum requirements: : (i) the Inventory is either (a) finished goods (b) raw materials other than supplies or (c) work-in-process; goods, but excluding in all cases any goods which have been shipped, delivered, sold by, purchased by or provided to a Borrower such Loan Party on a xxxx and hold, consignment sale, guaranteed sale, or sale or return basis, or any other similar basis or understanding other than an absolute sale and also excluding all supplies; sale; (ii) the Inventory is new, of good and merchantable quality, and represents no more than a twelve ; (12iii) month supply of such finished goods or raw materials; the Inventory is located on premises listed on Schedule A to the Security Agreement and, with respect to inventory locations at facilities leased to any of the Loan Parties, the Administrative Agent has received a Landlord’s Waiver in favor of the pipeline owned by Kiantone or any other Borrower, or in the Enbridge Pipeline if such Inventory meets the additional requirements for Qualified Enbridge Pipeline Inventory as identified in the definition of Qualified Inventory, or in storage tanks, or, during the Retail Assets Perfection Period, at a retail store located on a site owned by a Borrower or leased by a Borrower if the landlord has executed a landlord’s waiver Administrative Agent substantially in the form of Exhibit 1.1(Q)(ii6.1.1(xiii) hereto; , or is Inventory which is in transit and is so identified on the relevant Schedule of Inventory; (iv) the Inventory is not stored with a bailee, warehouseman, consignee or similar party unless the Administrative Agent has given its prior written consent and a Borrower such Loan Party has caused such bailee, warehouseman, consignee or similar party to issue and deliver to the Administrative Agent, in form and substance acceptable to the form of Exhibit 1.1(Q)(ii) heretoAdministrative Agent, warehouse receipts or similar type documentation therefor in the Administrative Agent’s name, or such party shall have executed and delivered to Agent a waiver and access agreement, in form and substance satisfactory to Agent; ; (v) the Inventory is subject to the Administrative Agent’s and the BanksLenders’ Prior Security Interest Interest, subject to Permitted Liens, if any, and is not subject to any other Lien; provided, however, Liens on Qualified Enbridge Pipeline Inventory in favor of Enbridge are permitted to the extent that Enbridge has required and received cash collateral, a letter of credit or other credit support in an amount determined by Enbridge; ; (vi) the Inventory has not been manufactured in violation of any applicable federal minimum wage or overtime laws, including, without limitation, the Fair Labor Standards Act, 29 U.S.C. § 215(a)(1); and the Inventory has not been attached, seized, levied upon or subjected to a writ or distress warrant, or such come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within ten and (10vii) days thereafter, provided that such 10-day grace period shall apply only if the amount of Inventory affected thereby does not exceed $2,500,000. the Inventory is not, and should not covered by a negotiable document of titlebe, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and the Banks; the Inventory is not unsalable, defective or otherwise unfit disqualified for sale; the Inventory does not consist of display items or packing or shipping materials, or replacement parts; the Inventory is (or upon completion of processing will be) of a type held for sale any other reason generally accepted in the ordinary course of Borrowers’ commercial finance business; Notwithstanding the qualification standards specified above, upon prior notice to the Borrowers, the Agent may at any time or from time to time revise such qualification standards in the exercise of its reasonable credit judgment. Level I Greater than $50,000,000 negative (.50%) 1.25 % 1.25 % Level II Greater than $30,000,000 but less than or equal to $50,000,000 negative (.25%) 1.50 % 1.50 % Level III Less than or equal to $30,000,000 0.00% 1.75 % 1.75 % For purposes of determining the Applicable Margin and the Letter of Credit Fee:.

Qualified Inventory. Upon delivery to the Administrative Agent of each Schedule of Inventory, the Administrative Agent shall make a determination, in its sole discretionPermitted Discretion, as to which Inventory listed thereon shall be deemed Qualified Inventory. Inventory held by any Borrower shall not be considered Qualified Inventory unless the Administrative Agent determines, in its sole discretionPermitted Discretion, that such Inventory has met the following minimum requirements: : (i) the Inventory is either (a) finished goods goods; (b) raw materials other than supplies (except supplies used exclusively as part of the manufacturing process for the production of finished goods); or (c) work-in-process, in each case of a type held for sale in the ordinary course of such Borrower’s business; but excluding in all cases any goods which have been shipped, delivered, sold by, purchased by or provided to a such Borrower on a xxxx and hold, consignment sale, guaranteed sale, or sale or return basis, or any other similar basis or understanding other than an absolute sale and also excluding all supplies; sale; (ii) the Inventory is new, of good and merchantable quality, and represents no more than a twelve ; (12iii) month supply of such finished goods or raw materials; the Inventory is located on premises listed on Exhibit B to the Security Agreement and, with respect to inventory locations at facilities leased to any of the Borrowers, the Administrative Agent has received a Landlord’s Waiver in form and substance acceptable to the pipeline owned by Kiantone or Administrative Agent; provided that Inventory in an aggregate amount not to exceed Five Million and 00/100 Dollars ($5,000,000.00) at any other Borrower, or in the Enbridge Pipeline if such Inventory meets the additional requirements for Qualified Enbridge Pipeline Inventory time that would otherwise be excluded pursuant to this clause (iii) shall be included as identified in the definition of Qualified Inventory, or subject to the Administrative Agent’s and/or Required Lenders’ ability to institute rent reserves in storage tanks, or, during accordance with the Retail Assets Perfection Period, at a retail store located on a site owned by a Borrower or leased by a Borrower if the landlord has executed a landlord’s waiver in the form terms of Exhibit 1.1(Q)(iithis Agreement; (iv) hereto; the Inventory is not stored with a bailee, warehouseman, consignee or similar party unless the Agent has given its prior written consent and a such Borrower has caused such bailee, warehouseman, consignee or similar party to issue and deliver to the Administrative Agent, in form and substance acceptable to the form of Exhibit 1.1(Q)(ii) heretoAdministrative Agent, warehouse receipts or similar type documentation therefor in the Administrative Agent’s name, name or such party shall have executed and delivered to Agent a lien waiver and access agreement, in form and substance satisfactory to Agent; agreement or similar type documentation; (v) the Inventory is subject to the Administrative Agent’s and the Banks’s’ Prior Security Interest and is not subject to any other Lien; provided, however, Liens on Qualified Enbridge Pipeline Inventory in favor of Enbridge are permitted to the extent that Enbridge has required and received cash collateral, a letter of credit or other credit support in an amount determined by Enbridge; ; (vi) the Inventory has not been manufactured in violation of any federal minimum wage or overtime laws, including, without limitation, the Fair Labor Standards Act, 29 U.S.C. § 215(a)(1); and ; (vii) the Inventory has not been attached, seized, levied upon or subjected to a writ or distress warrant, or such come within the possession manufactured in violation of any receiver, trustee, custodian standards imposed by any Official Body which has regulatory authority over such Inventory or assignee for the benefit of creditors and the same is not cured within ten use or sale thereof; (10viii) days thereafter, provided that such 10-day grace period shall apply only if the amount of Inventory affected thereby does not exceed $2,500,000. the Inventory is not covered by subject to a negotiable document license agreement or other agreement that limits, conditions or restricts any Borrower’s or the Administrative Agent’s right to sell or otherwise dispose of title, unless such document has been delivered to Agent with all necessary endorsements, free and clear of all Liens except those in favor of Agent and the Banks; Inventory; (ix) the Inventory is does not unsalable, defective breach any of the representations or otherwise unfit for sale; warranties pertaining to Inventory of such Borrower set forth in this Agreement or in any of the other Loan Documents; (x) the Inventory does not consist of display items any gross profit xxxx-up in connection with the sale and distribution thereof to any division of any Borrower or packing or shipping materials, or replacement parts; to any Affiliate of such Borrower; (xi) the Inventory is covered by casualty insurance as required by terms of this Agreement reasonably acceptable to the Administrative Agent; and (or upon completion of processing will xii) the Inventory is not, and should not be) of a type held , disqualified for sale any other reason generally accepted in the ordinary course of Borrowers’ commercial finance business; Notwithstanding the qualification standards specified above, upon prior notice to the Borrowers, the Agent may at any time or from time to time revise such qualification standards in the exercise of its reasonable credit judgment. Level I Greater than $50,000,000 negative (.50%) 1.25 % 1.25 % Level II Greater than $30,000,000 but less than or equal to $50,000,000 negative (.25%) 1.50 % 1.50 % Level III Less than or equal to $30,000,000 0.00% 1.75 % 1.75 % For purposes of determining the Applicable Margin and the Letter of Credit Fee:.