Urban Outfitters 2016 Annual Report Download - page 117

provided further that in determining the value of the Eligible Inventory, such value shall be reduced by, without duplication of amounts already accounted
for in determining such value, any amounts representing (i) vendor rebates; (ii) costs included in Inventory relating to advertising; (iii) a shrink reserve; and
(iv) the unreconciled discrepancy between the general inventory ledger and the perpetual inventory ledger, to the extent the general inventory ledger reflects
less Inventory than the perpetual inventory ledger. In the event that Inventory of a Borrower which was previously Eligible Inventory ceases to be Eligible
Inventory hereunder, such cessation shall be reflected in the next Borrowing Base Certificate.
“Eligible Trade Accounts” means, at any time, each Account (other than a Credit Card Account) of a Borrower that satisfies the following criteria at the
time of creation and continues to meet the same at the time of such determination: such Account (i) has been earned by performance and represents the bona
fide amounts due to a Borrower and in each case is originated in the ordinary course of business of such Borrower, and (ii) in each case is not ineligible for
inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (y) below. Without limiting the foregoing, to qualify as an Eligible
Trade Account, such Account shall indicate no Person other than a Borrower as payee or remittance party. Any Account included within any of the following
categories shall not constitute an Eligible Trade Account:
(a) which is not subject to a first priority perfected security interest in favor of the Administrative Agent (for the benefit of the Secured Parties);
(b) which is subject to any Lien other than (i) a Lien in favor of the Administrative Agent, (ii) a Permitted Encumbrance which does not have priority
over the Lien in favor of the Administrative Agent and (iii) Liens securing Permitted Term Loan Indebtedness that are subject to an Intercreditor Agreement
and which do not have priority over the Lien in favor of the Administrative Agent;
(c) (i) with respect to which the scheduled due date is more than 90 days after the date of the original invoice therefor, (ii) which is unpaid more than 90
days after the date of the original invoice therefor or more than 60 days after the original due date therefor (in determining the aggregate amount from the
same Account Debtor that is unpaid hereunder there shall be excluded the amount of any net credit balances relating to Accounts due from such Account
Debtor which are unpaid more than 90 days after the date of the original invoice therefor or more than 60 days after the original due date therefor) or
(iii) which has been written off the books of such Borrower or otherwise designated as uncollectible;
(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible
pursuant to clause (c) above;
(e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to all
Borrowers exceeds 20% of the aggregate amount of Eligible Trade Accounts of all Borrowers; provided that with respect to an Account which is owing by
(i) Nordstrom, Inc. or its Affiliates (a “Nordstrom Account”) to the extent the aggregate amount of Nordstrom Accounts owing to all Borrowers exceeds 35%
of the aggregate amount of Eligible Trade Accounts of all Borrowers and (ii) Macy’s, Inc. or its Affiliates (a “Macy’s Account”) to the extent the aggregate
amount of Macy’s Accounts owing to all Borrowers exceeds 35% of the aggregate amount of Eligible Trade Accounts of all Borrowers; provided further that,
should (i) Nordstrom, Inc. fail to maintain a corporate credit rating from S&P of BBB- or higher, then the 35% concentration limit set forth above for
Nordstrom Accounts shall be reduced to 20% and (ii) Macy’s, Inc. fail to maintain a corporate credit rating from S&P of BBB- or higher, then the 35%
concentration limit set forth above for Macy’s Accounts shall be reduced to 20%;
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