Tolled Inventory Clause Samples

Tolled Inventory. If any third Person (a "Tolling Party") delivers possession of, but not title to, any raw materials, work- in-process or other goods ("Tolled Inventory") pursuant to a bailment arrangement with the Company under which such Tolled Inventory is to be processed, improved or otherwise altered by the Company, the Administrative Agent agrees and acknowledges that any security interest in or lien upon Inventory created hereby does not apply to any Tolled Inventory which is owned by the Tolling Party (rather than owned by the Company subject to a retention of title by the Tolling Party which has the effect of creating a security interest in favor of the Tolling Party which remains unperfected). Notwithstanding anything in this Security Agreement to the contrary, the Company shall be entitled to follow its normal tolling practices and may deliver Tolled Inventory to or for the account of any Tolling Party free of the lien of this Security Agreement.