LENDERS, AND THOSE IN FAVOR OF CANADIAN
FACILITY AGENT, ON BEHALF OF ITSELF AND CANADIAN FACILITY LENDERS;
(13)
ACCOUNTS WITH RESPECT TO WHICH THE ACCOUNT
DEBTOR IS THE SUBJECT OF ANY BANKRUPTCY OR OTHER INSOLVENCY PROCEEDING;
(14)
ACCOUNTS DUE FROM AN ACCOUNT DEBTOR TO THE
EXTENT THAT SUCH ACCOUNTS EXCEED IN THE AGGREGATE AN AMOUNT EQUAL TO TEN PERCENT
(10%) OF THE AGGREGATE OF ALL ACCOUNTS OF ALL OBLIGORS (TOGETHER WITH ALL BEACON
CANADA ACCOUNTS) AT SAID DATE;
(15)
ACCOUNTS WITH RESPECT TO WHICH THE ACCOUNT
DEBTOR'S OBLIGATION TO PAY IS CONDITIONAL OR SUBJECT TO A REPURCHASE OBLIGATION
OR RIGHT TO RETURN OR WITH RESPECT TO WHICH THE GOODS OR SERVICES GIVING RISE TO
SUCH ACCOUNT HAVE NOT BEEN DELIVERED (OR PERFORMED, AS APPLICABLE) AND ACCEPTED
BY SUCH ACCOUNT DEBTOR, INCLUDING PROGRESS BILLINGS, BILL AND HOLD SALES,
GUARANTIED SALES, SALE OR RETURN TRANSACTIONS, SALES ON APPROVAL OR CONSIGNMENT
SALES;
(16)
ACCOUNTS WITH RESPECT TO WHICH THE ACCOUNT
DEBTOR IS LOCATED IN NEW JERSEY, OR ANY OTHER STATE DENYING CREDITORS ACCESS TO
ITS COURTS IN THE ABSENCE OF A NOTICE OF BUSINESS ACTIVITIES REPORT OR OTHER
SIMILAR FILING, UNLESS THE APPLICABLE LOAN PARTY HAS EITHER QUALIFIED AS A
FOREIGN CORPORATION AUTHORIZED TO TRANSACT BUSINESS IN SUCH STATE OR HAS FILED A
NOTICE OF BUSINESS ACTIVITIES REPORT OR SIMILAR FILING WITH THE APPLICABLE STATE
AGENCY FOR THE THEN CURRENT YEAR;
(17)
ACCOUNTS WITH RESPECT TO WHICH THE ACCOUNT
DEBTOR IS A CREDITOR OF ANY LOAN PARTY; PROVIDED, HOWEVER, THAT ANY SUCH ACCOUNT
SHALL ONLY BE INELIGIBLE AS TO THAT PORTION OF SUCH ACCOUNT WHICH IS LESS THAN
OR EQUAL TO THE AMOUNT OWED BY THE LOAN PARTIES TO SUCH PERSON; AND
7
(18)
THAT PORTION OF ACCOUNTS WHICH REPRESENTS
SERVICE CHARGES, LATE FEES OR SIMILAR CHARGES.
"Eligible Inventory" means, for any Obligor as at any date of determination, the
value (determined at the lower of cost, excluding intercompany charges or
profits included in cost, on a weighted average cost basis, or market) of all
Inventory owned by such Obligor and located in the United States of America that
Agent, in its reasonable credit judgment, deems to be eligible for borrowing
purposes.
Without limiting the generality of the foregoing, the Agent may
determine that the following is not Eligible Inventory:
(1)
WORK-IN-PROCESS THAT IS NOT READILY
MARKETABLE IN ITS CURRENT FORM;
(2)
FINISHED GOODS WHICH DO NOT MEET THE
SPECIFICATIONS OF THE PURCHASE ORDER FOR SUCH GOODS AND WHICH ARE NOT READILY
SALEABLE IN THEIR CURRENT FORM BY OBLIGORS IN THE ORDINARY COURSE OF BUSINESS;
(3)
INVENTORY WHICH AGENT DETERMINES IN THE
EXERCISE OF ITS REASONABLE CREDIT JUDGMENT, IS UNACCEPTABLE FOR BORROWING
PURPOSES DUE TO AGE, QUALITY, TYPE, CATEGORY AND/OR QUANTITY, INCLUDING WITHOUT
LIMITATION (A) INVENTORY ON HAND FOR MORE THAN 12 MONTHS AND (B) INVENTORY
PURCHASED OR OTHERWISE ACQUIRED MORE THAN 3 MONTHS PRIOR TO ANY DATE OF
DETERMINATION WHICH IS IN EXCESS OF A TWELVE-MONTH SUPPLY;
(4)
PACKAGING, SHIPPING MATERIALS OR SUPPLIES
CONSUMED IN THE APPLICABLE LOAN PARTY'S BUSINESS;
(5)