Urban Outfitters 2016 Annual Report Download - page 116

displays or display items, bill-and-hold or ship-in-place goods, goods that are returned or marked for return, repossessed goods, defective or damaged goods,
goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business (for the avoidance of doubt, sales in the ordinary
course of business includes clearance sales);
(g) which (i) is not located in the U.S., or (ii) is In-Transit Inventory;
(h) which is located in any location leased by such Borrower (other than any retail store of such Borrower located in a jurisdiction that does not provide
for a common law or statutory landlord’s lien on the personal property of tenants that would be prior or superior to the Liens of the Administrative Agent)
unless (i) the lessor has delivered to the Administrative Agent a Collateral Access Agreement or (ii) a Reserve has been established by the Administrative
Agent in its Permitted Discretion;
(i) which is (i) located in any third party warehouse or is in the possession of a bailee (other than a third party processor) unless (A) such warehouseman
or bailee has delivered to the Administrative Agent a Collateral Access Agreement and such other documentation as the Administrative Agent may require or
(B) an appropriate Reserve has been established by the Administrative Agent in its Permitted Discretion, or (ii) evidenced by a negotiable Document;
(j) which is being processed offsite at a third party location or outside processor, or is in-transit to or from such third party location or outside processor;
(k) which is the subject of a consignment by such Borrower as consignor;
(l) which contains or bears any intellectual property rights licensed to such Borrower unless the Administrative Agent is satisfied that it may sell or
otherwise dispose of such Inventory without (i) infringing the rights of such licensor, (ii) violating any contract with such licensor, or (iii) incurring any
liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;
(m) which is not reflected in a current perpetual inventory report of such Borrower (unless such Inventory is reflected in a report to the Administrative
Agent as “in transit” Inventory);
(n) for which reclamation rights have been asserted by the seller;
(o) which has been acquired from a Sanctioned Person;
(p) which has been designated or demanded to be returned to or retained by the applicable vendor or which has been recognized as damaged or off
quality by the applicable Borrower; or
(q) which does not meet such other eligibility criteria for Inventory as the Administrative Agent in its Permitted Discretion may determine from time to
time; provided, however, that the Administrative Agent shall not add any additional eligibility criteria (or amend any then-existing eligibility criteria to
make the same more restrictive) without giving at least four (4) Business Days’ prior notice to the Borrower Representative; provided further that, if after the
delivery of such notice the Borrower Representative notifies the Administrative Agent that it desires to discuss the changes described therein, then the
Administrative Agent will discuss such changes with the Borrower Representative, provided that nothing in this proviso shall obligate the Administrative
Agent to eliminate, reduce, or delay any such changes;
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