AS CONSIGNEE OR (2) IS PLACED ON
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CONSIGNMENT BY ANY US BORROWER OR US BORROWING BASE GUARANTOR AS CONSIGNOR WITH
ANY THIRD PARTY AS CONSIGNEE, UNLESS A VALID CONSIGNMENT AGREEMENT WHICH IS
REASONABLY SATISFACTORY TO APPLICABLE COLLATERAL AGENTS IS IN PLACE WITH RESPECT
TO SUCH INVENTORY;
(IV)
IS COVERED BY A NEGOTIABLE DOCUMENT OF TITLE, UNLESS SUCH
DOCUMENT HAS BEEN DELIVERED TO THE APPLICABLE COLLATERAL AGENTS WITH ALL
NECESSARY ENDORSEMENTS, FREE AND CLEAR OF ALL LIENS EXCEPT THOSE IN FAVOR OF THE
COLLATERAL AGENTS AND THE LENDERS AND LANDLORDS, CARRIERS, BAILEES AND
WAREHOUSEMEN IF CLAUSE (II) ABOVE HAS BEEN COMPLIED WITH;
(V)
IS TO BE RETURNED TO SUPPLIERS;
(VI)
IS OBSOLETE, UNSALABLE, SHOPWORN, SECONDS, DAMAGED OR UNFIT FOR
SALE;
(VII)
CONSISTS OF DISPLAY ITEMS, SAMPLES OR PACKING OR SHIPPING
MATERIALS, MANUFACTURING SUPPLIES, WORK-IN-PROCESS INVENTORY, REPLACEMENT PARTS
OR SPARE PARTS;
(VIII)
IS NOT FINISHED GOODS HELD FOR SALE IN THE ORDINARY COURSE OF
US BORROWER'S OR ANY US BORROWING BASE GUARANTOR'S, AS APPLICABLE, BUSINESS;
(IX)
BREACHES ANY OF THE REPRESENTATIONS OR WARRANTIES PERTAINING TO
INVENTORY SET FORTH IN THE LOAN DOCUMENTS;
(X)
CONSISTS OF HAZARDOUS MATERIAL OR GOODS THAT, IN EITHER CASE,
CAN BE TRANSPORTED OR SOLD ONLY WITH LICENSES THAT ARE NOT READILY AVAILABLE;
(XI)
IS NOT COVERED BY CASUALTY INSURANCE MAINTAINED AS REQUIRED BY
SECTION 5.04;
(XII)
SUPPLIES USED OR CONSUMED IN US BORROWER'S BUSINESS;
(XIII)
BILL AND HOLD GOODS;
(XIV)
UNSERVICEABLE OR SLOW MOVING INVENTORY;
(XV)
INVENTORY RETURNED BY RETAIL CUSTOMERS THAT IS NOT HELD FOR
RESALE;
(XVI)
INVENTORY SUBJECT TO DEPOSIT MADE BY RETAIL CUSTOMERS FOR SALE
OF INVENTORY THAT HAVE NOT BEEN DELIVERED TO THE EXTENT OF SUCH DEPOSITS; OR
(XVII)
IS SUBJECT TO ANY LICENSING ARRANGEMENT THE EFFECT OF WHICH
WOULD BE TO LIMIT THE ABILITY OF ANY COLLATERAL AGENT, OR ANY PERSON SELLING THE
INVENTORY ON BEHALF OF SUCH COLLATERAL AGENT, TO SELL SUCH INVENTORY IN
ENFORCEMENT OF SUCH COLLATERAL AGENT'S LIENS, WITHOUT FURTHER CONSENT OR PAYMENT
TO THE LICENSOR OR OTHER PERSON.
SECTION 2.21.
DETERMINATION OF CANADIAN BORROWING BASE.
(A)
ELIGIBLE CANADIAN ACCOUNTS.
ON ANY DATE OF DETERMINATION OF THE
CANADIAN BORROWING BASE THE TERM "ELIGIBLE CANADIAN ACCOUNTS" AS USED HEREIN
SHALL COMPRISE ALL OF THE
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CREDIT CARD RECEIVABLES OF CANADIAN BORROWER AND ANY OF CANADIAN BORROWING BASE
GUARANTORS AS ARISE IN THE ORDINARY COURSE OF BUSINESS, WHICH HAVE BEEN EARNED
BY PERFORMANCE, THAT ARE NOT EXCLUDED AS INELIGIBLE BY VIRTUE OF ONE OR MORE OF
THE CRITERIA SET FORTH BELOW AND ARE REFLECTED IN THE MOST RECENT BORROWING BASE
CERTIFICATE DELIVERED BY THE BORROWERS TO THE COLLATERAL AGENTS AND THE
ADMINISTRATIVE AGENTS.
NONE OF THE FOLLOWING SHALL BE DEEMED TO BE ELIGIBLE
ACCOUNTS:
(I)
CREDIT CARD RECEIVABLES DUE FROM MAJOR CREDIT CARD PROCESSORS
THAT HAVE BEEN OUTSTANDING FOR MORE THAN FIVE (5) BUSINESS DAYS FROM THE DATE OF
SALE OR, IN THE CASE OF ACCOUNTS DUE FROM AMERICAN EXPRESS TO THE CANADIAN
BORROWER OR ANY OF THE CANADIAN BORROWING BASE GUARANTORS, THAT HAVE BEEN
OUTSTANDING FOR MORE THAN