Common use of Inventory Clause in Contracts

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportInventory, the Borrowers and their Subsidiaries will: (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located maintain a perpetual inventory reporting system at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificatetimes, (b) no conduct a physical count of the Inventory at least once per Fiscal Year, and at such other times as the Lender reasonably requests, and shall promptly, upon completion, supply the Lender with a copy of such count accompanied by a report of the value of such Inventory (valued at the lower of cost, on a first-in, first-out basis, or market value) (c) as soon as possible upon demand by the Lender from time to time, prepare and deliver to the Lender designations of Inventory specifying the Borrowers’ and Subsidiaries’ cost of Inventory and such other than Inventory in transit, Inventory excluded from Eligible matters and information relating to the Inventory as disclosed the Lender may reasonably request; (d) keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, and the Borrowers’ and Subsidiaries’ cost therefor, all of which records shall be available to the officers, employees or agents of the Lender upon demand for inspection and copying thereof; (e) not store any Inventory with a bailee, warehouseman or similar Person without the Lender’s prior written consent, which consent may be conditioned on, among other things, delivery by the bailee, warehouseman or similar Person to the Lender of warehouse receipts, in form acceptable to the Lender, in the most recent Collateral Reportname of the Lender evidencing the storage of Inventory and the interests of the Lender therein; (f) permit the Lender and its agents or representatives to inspect and examine the Inventory and to check and test the same as to quality, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessquantity, value and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall condition at any time or times hereafter be stored during the Borrowers’ and Subsidiaries’ usual business hours or at any other location except as permitted by Section 4.1(g)reasonable times and (g) at the Lender’s request, (c) such Grantor has goodfollowing the Lender’s request following an Event of Default that is continuing, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and designate the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such consignee on all bills of lading and other negotiable and non-negotiable documents. The Borrowers shall be permitted to sell their Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with business until the Federal Fair Labor Standards Act occurrence of 1938, as amended, and all rules, regulations and orders thereunderan Event of Default.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Subject to any reserve therefor on the Company Balance Sheet, all the inventory of the Company and its Subsidiaries is properly stated therein at standard cost determined in accordance with GAAP consistently maintained and applied by the Company and its Subsidiaries and currently is stated at the lower of such Inventory cost or current market value. Cost of inventory is determined by the first in, first out (other than Inventory in transitFIFO) method. All the inventory of the Company and its Subsidiaries was, Inventory excluded from Eligible Inventory as disclosed in and all the most recent Collateral Reportinventory thereafter acquired and maintained by the Company and its Subsidiaries through the Closing Date will have been, Inventory located at contractors’ premises or ▇▇▇▇▇ acquired and maintained in the ordinary course of business. Subject to any reserve therefor (which reserve will not be greater than the reserve for inventory reflected on the Company Balance Sheet), all the inventory of the Company and its Subsidiaries consists of, and Inventory on the Closing Date will consist of, items of a quality usable or saleable in the form ordinary course of raw materials; provided, that the aggregate amount of all Inventory business and are and will be in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 quantities sufficient for use or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ sale in the ordinary course of business. (b) Since January 1, 2012, the Company and Inventory its Subsidiaries have continued to replenish their inventory and to dispose of out-of-season and slow-moving inventory in a normal and customary manner consistent with past practices prevailing in the form business of raw materials; providedthe Company and its Subsidiaries. The Company and its Subsidiaries maintain policies, that practices and procedures with respect to the aggregate amount adequate security and safeguard of all Inventory inventory and other assets (including, with respect to employee and third-party theft and other loss), in each case consistent with past practices prevailing in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit business of the Administrative Agent Company and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause its Subsidiaries. All inventory of the Company that is considered “slow-moving” or otherwise “out-of-season” or has been held in inventory for more than nine (a), (b), (f), (h9) or (imonths is identified on Part 3.10(b) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderDisclosure Schedule.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Except as would not, individually or in the aggregate, reasonably be expected to be material to the Business, (i) all Inventory consists of a quality usable and saleable in the Ordinary Course of Business, except for obsolete items, expired items and items of below-standard quality, all of which have been written-off or written-down to net realizable value as of the Balance Sheet Date in accordance with GAAP, (ii) Inventory levels are maintained in such amounts as are required in the Ordinary Course of the Business, and such Inventory levels are adequate therefor, (iii) other than in the Ordinary Course of Business, there has been no material change in Sellers’ or the Acquired Entities’ Inventory valuation standards or methods with respect to the Inventory in the three (3) years preceding the Signing Date and (iv) no Seller or Acquired Entity holds any items of Inventory on consignment from other Persons. (b) The Acquired Entities and their respective Subsidiaries do not own or lease (in whole or in part) or operate, and to the Knowledge of Sellers have not owned or leased (in whole or in part) or operated, any terminals or pipelines. (c) All motor fuel Inventory is of sufficient quality and fitness that it will be suitable for use by automotive consumers, except for which recourse is available from the distributor of such motor fuel Inventory or as would not reasonably be expected to be material to the Business. All motor fuel Inventory meets all applicable federal, state and local requirements, including the rules and regulations promulgated pursuant to Section 211 of the Clean Air Act, 40 CFR 79-Registration of Fuels and Fuel Additives and 40 CFR 80-Regulation of Fuels and Fuel Additives, in each case except as would not individually or in the aggregate reasonably be expected to be material to the Business. (d) Except as set forth on Section 3.7(d) of the Seller Disclosure Schedule, or as would not reasonably be expected to be material to the Business, (i) all material Inventory is owned by a Seller or one of their respective Affiliates free and clear of any Encumbrances (other than Inventory in transit, Inventory excluded from Eligible Inventory Permitted Encumbrances) and (ii) as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 immediately prior to the Perfection CertificateClosing (but without giving effect to the Sale), (b) no all material Inventory will be owned by the Acquired Entities free and clear of any Encumbrances (other than Inventory Permitted Encumbrances). (e) All instances of product warranty claims primarily in transit, Inventory excluded from Eligible Inventory as disclosed connection with the Business involving any motor fuels sold by any Seller or any Acquired Entity and involving amounts in excess of $2,000,000 in the most recent Collateral Report, Inventory located at contractors’ premises aggregate that have occurred and for which notice has been received by any Seller or ▇▇▇▇▇ in any Acquired Entity or any of their respective Affiliates within the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000two (2) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted year period prior to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (iSigning Date are listed Section 3.7(e) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderSeller Disclosure Schedule.

Inventory. (i) With respect to any of its a Pledgor’s Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises transit or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000being processed by a third party) is located at one of such GrantorPledgor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises transit or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000being processed by a third party) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g3.4(h), (c) such Grantor Pledgor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit Liens permitted under Section 6.02 of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender PartiesCredit Agreement, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable conditionInventory, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) such Inventory has been produced in accordance compliance in all material respects with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Pledgor is a party or to which such property is subject. (ii) Each Pledgor will do all things necessary to maintain, preserve, protect and keep its Inventory in working and saleable condition, except for damaged or defective goods arising in the ordinary course of such Pledgor’s business. (iii) If an Account Debtor returns any Inventory to a Pledgor when no Event of Default exists, then such Pledgor shall promptly determine the reason for such return and shall promptly report each such event or circumstance on the Borrowing Base Certificates submitted by it in the manner required with respect to such Borrowing Base Certificate. In the event any Account Debtor returns Inventory to such Pledgor when an Event of Default exists, such Pledgor, upon the request of the Administrative Agent, shall: (i) hold the returned Inventory in trust for the Administrative Agent; (ii) segregate all returned Inventory from all of its other property; (iii) dispose of the returned Inventory solely according to the Administrative Agent’s written instructions; and (iv) not issue any credits or allowances with respect thereto without the Administrative Agent’s prior written consent. All returned Inventory shall be subject to the Administrative Agent’s Liens thereon. Whenever any Inventory is returned, the related Account shall be deemed ineligible to the extent of the amount owing by the Account Debtor with respect to such returned Inventory and such returned Inventory shall not be Eligible Inventory. (iv) Each Pledgor will conduct a physical count of its Inventory at least once per fiscal year, and after and during the continuation of an Event of Default, at such other times as the Administrative Agent requests. Such Pledgor, at its own expense, shall deliver to the Administrative Agent the results of each physical verification, which such Pledgor has made, or has caused any other Person to make on its behalf, of all or any portion of its Inventory. Such Pledgor will maintain a perpetual inventory reporting system at all times. (v) Each Pledgor shall (i) maintain any Equipment necessary for the conduct of its business in good working order, ordinary wear and tear excepted and (ii) promptly inform the Administrative Agent of any additions to or deletions from its Equipment which individually or in the aggregate exceed $25,000,000.

Inventory. With respect to any As of its the date hereof, the Inventory scheduled or listed is maintained at the locations specified on the most recent Collateral Report, (a) such Schedule 4.4 attached hereto and by this reference incorporated herein. Except for Inventory (other than Inventory i) in transit, Inventory excluded from Eligible Inventory as disclosed in transit to manufacturing plants or warehouses owned or leased by the most recent Collateral Report, Inventory located at contractors’ premises Debtor or ▇▇▇▇▇ to customers in the ordinary course of business, and (ii) finished goods Inventory in the form of raw materials; providedconsigned to either Home Depot U.S.A., that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection CertificateInc., a Delaware corporation (b) no Inventory (other than Inventory in transit“The Home Depot”), Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇’▇ Companies, Inc., a North Carolina corporation (“Lowe’s”), the Debtor does not store and will not store any Inventory on any real property which is not owned by the Debtor in fee simple or subject to a lease of real property under which the Debtor is the lessee (each such lease, a “Lease”). The Debtor will not permit any Inventory having an aggregate value of $500,000 or greater to be maintained or stored in any location other than those listed on Schedule 4.4 without giving the Collateral Agent at least thirty (30) days’ prior written notice and, unless prior to such change, the Debtor shall have taken all action reasonably necessary or desirable or that the Collateral Agent may reasonably request, to preserve, perfect, confirm and protect in the ordinary course manner and to the extent provided for in this Security Agreement the security interests granted hereby. Without limiting the foregoing, the Debtor represents that all of businessits finished goods Inventory (other than finished goods Inventory in transit) is, and covenants that all of its finished goods Inventory will be, located (a) on premises owned by the Debtor in fee simple, (b) on premises leased by the form of raw materials; providedDebtor, provided that the Collateral Agent has received an executed landlord waiver from the landlord of such premises in form and substance satisfactory to the Collateral Agent if the Inventory located thereon on or after May 16, 2007 has an aggregate amount value of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, 500,000 or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g)greater, (c) such Grantor in a warehouse or with a bailee, provided that the Collateral Agent has good, indefeasible received an executed bailee letter from the applicable Person in form and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted substance satisfactory to the Administrative Collateral Agent hereunder for if the benefit Inventory located thereon on or after May 16, 2007 has an aggregate value of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) $500,000 or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Partiesgreater, (d) except as specifically disclosed in The Home Depot distribution centers pursuant to a written consignment agreement between the most recent Debtor and The Home Depot, provided that the Collateral ReportAgent shall have received an executed consignee agreement from The Home Depot in form and substance satisfactory to the Collateral Agent if the Inventory located therein has an aggregate value of $1,000,000 or greater, or (e) in Lowe’s distribution centers pursuant to a written consignment agreement between the Debtor and Lowe’s, provided that the Collateral Agent shall have received an executed consignee agreement from Lowe’s in form and substance satisfactory to the Collateral Agent if the Inventory located therein has an aggregate value of $1,000,000 or greater. Notwithstanding the foregoing, the failure of the Collateral Agent to have received an executed landlord lien waiver referred to in clause (b) of this Section 4.4 for a particular location, an executed bailee letter referred to in clause (c) of this Section 4.4 for a particular warehouse or an executed bailee letter referred to in clause (c) of this Section 4.4 from a particular bailee shall not be a default hereunder (or a Default or an Event of Default); instead, none of the Inventory located at such Inventory is leased location, in such warehouse or with such bailee shall be Eligible Inventory Inventory. Furthermore, notwithstanding the foregoing, the failure of good and marketable condition, except for damaged the Collateral Agent to have received one or defective goods arising both of the consignee agreements referred to in the ordinary course of such Grantor’s business, clauses (d) and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938this Section 4.4 shall not be a default hereunder (or a Default or an Event of Default); instead, as amendedfurther provided in Section 2.01(c)iii. of the Credit Agreement, any consigned Inventory with a value equal to or greater than $1,000,000 which is held by a consignee that has not executed and all rules, regulations and orders thereunderdelivered to the Collateral Agent such a consignee agreement shall not be Eligible Inventory.

Inventory. With respect to any of its All Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businesshas been produced, and during the term --------- hereof will be produced, in compliance with the requirements of the Federal Fair Labor Standards Act. No Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or nor shall any Inventory at any time or times hereafter be be, stored at with a bailee, warehouseman or similar party without Bank's prior written consent and, if Bank gives such consent, Borrower will concurrently therewith cause any other location except as permitted by Section 4.1(g)such bailee, (c) such Grantor has goodwarehouseman, indefeasible or similar party to issue and merchantable title deliver to such Inventory Bank, in form and such substance acceptable to Bank, warehouse receipts therefor in Bank's name. No Inventory is not subject or will be consigned to any Lien or security interest or document whatsoever except for the security interest granted Person without Bank's prior written consent, and, if such consent is given, Borrower shall, prior to the Administrative Agent hereunder for the benefit delivery of the Administrative Agent and Lender Partiesany Inventory on consignment, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) provide Bank with all consignment agreements to be used in correction with any consigned inventory, all of which shall be acceptable to Bank, (ii) prepare, execute and file appropriate financing statements with respect to any such consigned inventory, showing Bank as assignee, (iii) conduct a search of all filings made against the consignee in all jurisdictions in which any consigned Inventory is to be located and deliver to Bank copies of the definition thereof and any other Permitted Encumbrance which does not have priority over results of all such searches, (iv) notify, in writing, all the Lien in favor creditors of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed consignee which are or may be holders of Liens in the most recent Collateral ReportInventory to be consigned that Borrower expects to deliver certain inventory to the consignee, all of which inventory shall be described in such Inventory is Eligible Inventory of good and marketable condition, except for damaged notice by item or defective goods arising in the ordinary course of such Grantor’s businesstype, and (ev) do all such Inventory has been produced other things and acts as may be necessary or desirable to fully perfect on a first priority basis Bank's security interest in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundersaid Inventory.

Inventory. With respect to any of its Inventory scheduled or listed represented as being Eligible Inventory on the most recent Collateral Report, (a) as of the last day of the period covered by such Collateral Report, such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Exhibit A and such Inventory (other than Inventory in transittransit and other than Inventory that has subsequently been sold, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises transferred or ▇▇▇▇▇ otherwise disposed of by such Grantor (other than to another Grantor) in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does ) shall not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g4.01(j), (cb) other than any Inventory that has subsequently been sold, transferred or otherwise disposed of by such Grantor (other than to another Grantor) in the ordinary course of business, such Grantor has good, indefeasible good and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever Lien, except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (apermitted by Section 4.01(g), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (dc) except as specifically disclosed in such Collateral Report (or in any notification provided to the most recent Administrative Agent subsequent to the last day of the period covered by such Collateral ReportReport in accordance with Section 5.01(i) of the Credit Agreement), such Inventory (except for de minimis portions of such Inventory) is Eligible Inventory of good and marketable conditionmerchantable quality, except for damaged free from any defects, (d) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or defective goods arising in copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the ordinary course payment of any monies to any third party upon such Grantor’s businesssale or other disposition (other than any such consent that has already been obtained or any such payment obligation that has already been waived), and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (f) the preparation for sale, marketing or sale of such Inventory by the Administrative Agent after the occurrence and during the continuance of an Event of Default shall not require the consent of any Person (except as required by applicable law) and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such Inventory is subject.

Inventory. With respect All Inventory included in any Inventory Borrowing Base Certificate delivered to any the Agent pursuant to Section 8.8(d) meets the criteria enumerated in the definitions of its Inventory scheduled or listed on the most recent Collateral ReportEligible Inventory, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory except as disclosed in such Inventory Borrowing Base Certificate or in a subsequent Inventory Borrowing Base Certificate or as otherwise specifically disclosed in writing to the most recent Collateral ReportAgent. All Eligible Inventory is in good condition, meets all standards imposed by any governmental agency or department or division thereof having regulatory authority over such goods, their use or sale, and is currently either usable or saleable in the normal course of a Borrower's business, except to the extent reserved against in the financial statements delivered pursuant to Section 6.1(m) and Article 10 or as disclosed on a Schedule of Inventory delivered to the Agent pursuant to Section 8.8(c). The Agent may rely on all statements, warranties or representations made in any Schedule of Inventory in determining which items of Inventory listed in such Schedule are to be deemed Eligible Inventory. Set forth on Schedule 6.1(s) is the (i) address (including street, city, county and state) of each facility at which Inventory is located, (ii) the approximate Cost value of the Inventory located at contractors’ premises each such facility, (iii) if the facility is leased or ▇▇▇▇▇ in is a third party warehouse or processor location, the ordinary course name of businessthe landlord or such third party warehouseman or processor, and (iv) if the Inventory in the form of raw materials; providedis consigned, that the aggregate amount of all outstanding consignment and memo contract agreements to which such Borrower is a party. All Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations on the premises set forth on Schedule 2 6.1(s) or Schedule 14 is in transit to one of such locations, except as otherwise disclosed in writing to the Perfection Certificate, (b) Agent; no Borrower has located Inventory (at premises other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000those set forth on Schedule 6.1(s) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such during the four months immediately preceding the Agreement Date. No Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a other than Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderLiens.

Inventory. With respect 8.1.1 The Supplier shall manage demand and supply inventory planning and share these plans with the Distributor. 8.1.2 Each month, the Supplier shall provide the Distributor, at a minimum, twelve (12) month rolling inventory forecasts (including monthly volume and inventory requirements). 8.1.3 The Distributor and Supplier agree to mutually rectify back orders, but the Distributor is not financially obligated to compensate the Supplier for back orders for Products, unless such back order is a result of Distributor or its Affiliates’ physical inability to manage inventory volumes or warehousing or any other physical actions of Distributor or its Affiliates within their control that are not related to the Distributor ERP System or any actions of Supplier or any Supplier Affiliates. 8.1.4 The Parties acknowledge that there is inventory of Products in each Territory as of the Commencement Date (such inventory in such Territory, the “Opening Inventory”). The relevant Distributor Affiliate shall retain title to the Opening Inventory until the Product is delivered to the end customer or Subdistributor. 8.1.5 Upon expiration or termination of this Agreement, Supplier or any of its Affiliates in the applicable Territory on an ex-works basis (Incoterms 2020) must repurchase from Distributor or the applicable Distributor Affiliate all unused and undamaged Products in stock for the Product Price paid by Distributor (or any Distributor Affiliate) to Supplier (or any Supplier Affiliate) for such Products, plus any freight, insurance (minus any recoveries on such insurance), non-recoverable duty, or other non-recoverable importation cost incurred by the Distributor in respect of such Products (collectively, the “Final Inventory scheduled or listed on Repurchase Obligation Amount”), less the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible full Opening Inventory as disclosed in of the most recent Collateral ReportCommencement Date at the Product Price (the net amount of such payment obligation, the “Final Inventory located at contractors’ premises Repurchase Balance”). For clarity, if the Final Inventory Repurchase Balance is a positive number, then Supplier or ▇▇▇▇▇ in Supplier Affiliate shall pay the ordinary course of businessFinal Inventory Repurchase Balance to Distributor or Distributor Affiliate, and if the Final Inventory in Repurchase Balance is a negative number, then Distributor or Distributor Affiliate shall pay the form Final Inventory Repurchase Balance to Supplier or Supplier Affiliate. Upon mutual written agreement of raw materials; providedthe Parties, that the aggregate amount Parties may elect to set off payment of all the Final Inventory in the form of raw materials subject Repurchase Balance pursuant to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit 8.1.5 with payment of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien True-Up Amount in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance connection with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderfinal True-Up under Section 11.1.2(a).

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Commencing as promptly as practicable following the date hereof (but in no event later than the Closing Date), Sellers and Buyer shall cause to be taken a SKU level Cost Value and Retail Price physical inventory of the Merchandise (collectively, the “Inventory Taking”), which Inventory Taking shall be completed in each of the Stores as soon as practicable (the date of the Inventory Taking at each Store being the “Inventory Date” for each such Store), but in any event no later than twenty-one (21) days after the Closing Date (subject to the availability of the Inventory (other than Taker), and, with respect to Merchandise located in Merchant’s Distribution Centers or in-transit from the Distribution Centers to a Store that arrives after the Inventory in transitDate for such Store, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Reportsuch Merchandise shall be counted by Representatives of Sellers, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessAgent, and Buyer upon receipt at such Store. The Inventory Taker will conduct the physical inventory in accordance with such procedures and instructions as may be mutually and reasonably agreed upon by the form of raw materials; providedInventory Taker, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection CertificateSellers, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessBuyer and Agent, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced otherwise in accordance with the Federal Fair Labor Standards Act terms and conditions of 1938this Section 2.6. Each Party and the Agent shall be entitled to have Representatives present during the Inventory Taking and to review, reconcile, and verify the listing and tabulation of the Inventory Taking Service (after review, reconciliation and mutual written verification thereof by Buyer, Agent, and Sellers, the “Inventory Report”), and the fees and expenses of the Inventory Taker shall be borne one hundred percent (100%) by Agent under the Agency Agreement. Buyer, Sellers and Agent will direct the Inventory Taker to deliver the Inventory Report no later than seven (7) calendar days, if practicable, after the completion of the Inventory Taking. Sellers, Agent, and Buyer agree that during the conduct of the Inventory Taking, the applicable Store shall be closed to the public, and no sales or other transactions shall be conducted within the applicable Store. Sellers, Agent, and Buyer further agree that until the Inventory Taking in a particular Store is completed, neither the Sellers, Agent, nor Buyer shall: (i) move Merchandise within or about the Store so as amendedto make any such items unavailable for counting as part of the Inventory Taking; or (ii) remove or add any hang tags, price tickets, inventory control tags affixed to any Merchandise or any other kind of in-store pricing signage within the Store. Sellers agree to cooperate with Buyer and Agent to conduct the Inventory Taking (including without limitation by making available to Buyer and Agent information relating to sales, units, costs, Cost Value, and Retail Price, and making available to Buyer and Agent Merchant’s books, records, work papers and personnel to the extent reasonably necessary to calculate the Cost Value and Retail Price of the Merchandise). The Parties and Agent agree that the Inventory Taking will commence at a time that will minimize the number of hours that the Stores will be closed for business. (b) At each Store, for the period from the Sale Commencement Date until the Inventory Date for such Store, and for the e-commerce platform, for the period from the Sale Commencement Date through the last date on which sales are conducted using the e-commerce platform (or such earlier date as the Sellers, Buyer and Agent may agree in writing), Sellers, Agent, and Buyer shall jointly keep (i) a strict count of gross register receipts (or in the case of e-commerce sales, e-commerce records) less applicable Sales Taxes but excluding any prevailing Sale discounts (“Gross Rings”), and (ii) cash reports of sales within such Store or through the e-commerce platform. Register/e-commerce reports shall show for each item sold the Cost Value and Retail Price for such item and the markdown or discount, if any, specifically granted by the Agent. All such records and reports shall be made available to Sellers, Agent, and Buyer during regular business hours upon reasonable notice. Any Merchandise sold using the Gross Rings method shall be included as Merchandise, and all rulesMerchandise sold during the Gross Rings period shall be included in the Inventory Report at its applicable Cost Value (without taking into account any of Agent’s point of sale discounts or point of sale markdowns) plus one and 67/100 percent (1.67%) to account for shrinkage for purposes of determining the Inventory Purchase Price Adjustment and Inventory Value. (c) The Inventory Report (and the portion of the Purchase Price to be paid by Buyer for the Inventory) shall not include Inventory that (i) is Excluded Defective Merchandise; (ii) is not transferable to Buyer under applicable Law; (iii) belongs to sublessees, regulations licensees, department lessees, or concessionaires of Sellers; (iv) is leased by the Company as lessor or held by the Company on memo, on consignment, or as bailee; or (v) consists of raw materials, work in process, supplies, or material used or consumed in connection with the Business (collectively, the “Excluded Inventory”). (d) The Inventory Report shall include all Merchandise in the Stores, excluding the Excluded Inventory (but including any portion or all of the Excluded Inventory for which Sellers, Agent, and orders thereunderBuyer are able to mutually agree (in each Party’s (or in the case of Agent, Agent’s) sole and absolute discretion) on the Cost Value and Retail Price thereof), and shall be supplemented to include (i) all Distribution Center Merchandise that is received at a Store after the applicable Inventory Date, but on or prior to the Sale Termination Date and (ii) all Returned Merchandise that is returned to a Store after the applicable Inventory Date, but on or prior to the date that is thirty (30) days after the Closing Date. Additionally, to the extent Sellers, Buyer, and Agent can agree on procedures for counting the GSI Merchandise, such GSI Merchandise shall be counted in accordance with such procedures; otherwise, GSI Merchandise shall be counted exclusively using the Gross Rings method. (e) Sellers, Buyer, and Agent estimate that the aggregate Cost Value of the Merchandise to be included in the Sale will be $138,000,000 (the “Estimated Inventory Value”). To the extent that the Inventory Value is greater than the Estimated Inventory Value, but less than the Upper Threshold, the Cash Purchase Price shall be increased by an amount equal to the difference between the Inventory Value and the Estimated Inventory Value. To the extent that the Inventory Value is less than the Estimated Inventory Value, the Cash Purchase Price shall be decreased by an amount equal to the difference between the Inventory Value and the Estimated Inventory Value. (f) If the Inventory Value (calculated without taking into account any Returned Merchandise) is greater than $142,000,000 (the “Upper Threshold”), the Purchase Price shall be neither increased nor decreased. (g) If the ratio of the aggregate Cost Value of the Merchandise to the aggregate Retail Price of the Merchandise is a percentage greater than the Cost Factor Threshold, the Purchase Price shall be reduced in accordance with Schedule 2.6(g) (the cumulative adjustment of Section 2.6(e) and this Section 2.6(g) and the corresponding effect on the Purchase Price, the “Inventory Purchase Price Adjustment”). (h) The Inventory Report prepared by the Inventory Taker shall be prepared in accordance with the usual and customary practices of the industry and shall show, among other things, the aggregate Cost Value and Retail Price determined in the manner provided above.

Inventory. With respect to the Inventory, each Borrower will: (a) as soon as possible upon demand by the Lender from time to time, prepare and deliver to the Lender designations of Inventory specifying each Borrower's cost of Inventory, the retail price thereof, and such other matters and information relating to the Inventory as the Lender may reasonably request; (b) keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, each Borrower's cost therefor and the selling price thereof, all of which records shall be available to the officers, employees or agents of the Lender upon demand for inspection and copying thereof; (c) except as set forth in SCHEDULE 6.1.21, not store any of its Inventory scheduled with a bailee, warehouseman or listed similar Person without the Lender's prior written consent, which consent may be conditioned on, among other things, delivery by the bailee, warehouseman or similar Person to the Lender of warehouse receipts, in form acceptable to the Lender, in the name of the Lender evidencing the storage of Inventory and the Lender's interests therein, provided, however, that, unless an Event of Default would arise under another provision of this Agreement, a Borrower may store its Inventory with a warehouseman (i) who is identified on the most recent Collateral ReportDisclosure List or, after the date of this Agreement, in a notice from any such Borrower to the Lender given no less than five (a5) Business Days prior to any such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessstorage, and Inventory (ii) (A) from whom the Lender has received a waiver and consent, in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 and substance satisfactory to the Perfection CertificateLender, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in to the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in extent required by the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is nowLender, or shall (B) (without implying any limitation on the Lender's other rights and remedies) with respect to whose potential claims the Lender has established reserves satisfactory to the Lender; and (d) permit the Lender and its agents or representatives to inspect and examine the Inventory and to check and test the same as to quality, quantity, value and condition at any time or times hereafter during a Borrower's usual business hours or at other reasonable times. Any Borrower shall be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such sell its Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with its business until the Federal Fair Labor Standards Act occurrence of 1938, as amended, and all rules, regulations and orders thereundera Default or an Event of Default.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 Exhibit A excluding retail store locations which have been established but for which Grantors are not required to the Perfection Certificatedeliver a supplement to such exhibit pursuant to Section 8.22 (as such Exhibit may be supplemented from time to time in accordance with Section 8.22), (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g4.1(f), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted Liens to the Administrative Agent hereunder for the benefit extent permitted under Section 6.02 of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender PartiesCredit Agreement, (d) except as specifically disclosed in the most recent Collateral ReportReport (specifically or by exclusion of any such Account or Credit Card Account from the Borrowing Base Certificate), such Inventory is Eligible Inventory or Eligible In-Transit Inventory of good and marketable conditionmerchantable quality, except for damaged or defective goods arising in the ordinary course of such Grantor’s businessfree from any defects, and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) to the extent applicable, such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following the occurrence and during the continuance of an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject (without regard to the right of the Administrative Agent to access any Retail Store Location for such purposes).

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) The Parent Borrower shall, and shall cause each Loan Party to, use their commercially reasonable efforts to obtain a Collateral Access Agreement with respect to each location from time to time set forth on Schedule 6.18 that is a leased real property where any Inventory is located or where any warehouseman, bailee or consignee has possession of any Inventory, and in each case such Inventory has a Value in excess of $10,000,000 (i) in the case of any such location set forth on such Schedule 6.18 on the Closing Date, as promptly as reasonably practicable after the Closing Date and, in any event, within 60 days after the Closing Date (or such later date as the Administrative Agent shall agree in its sole discretion) and (ii) in the case of any such location added to such Schedule 6.18 after the Closing Date pursuant to clause (b) below where Inventory with a Value in excess of $10,000,000 is located, as promptly as reasonably practicable thereafter and, in any event, within 60 days thereafter (or such later date as the Administrative Agent shall agree in its sole discretion). (b) The Loan Parties shall maintain their Inventory (other than in-transit Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course and immaterial amounts of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000Inventory) is located solely at one of such Grantor’s or more locations set forth on Schedule 2 or Schedule 14 to 6.18; provided that the Perfection Certificate, (b) no Loan Parties may also maintain their Inventory (at such other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed locations in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ United States as may have been specified in writing by the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted Parent Borrower to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender PartiesAgent, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or which notice (i) contains all the information with respect to such location contemplated to be provided with respect to a location by Schedule 6.18 (and, upon delivery of such notice, Schedule 6.18 shall be deemed to have been supplemented to set forth each such newly specified location) and (ii) in the case of any such location that is not owned in fee by the Loan Parties, is accompanied by a copy of the definition thereof and any warehouse, fulfillment, distribution or other Permitted Encumbrance bailee agreement governing the maintenance of Inventory by the applicable Loan Party at such location. On Schedule 6.18, the Parent Borrower shall identify the locations for which does not have priority over the Lien in favor of the Administrative Agent a Collateral Access Agreement is required hereunder and the Lender Parties, (d) except as specifically disclosed in the most recent locations for which a Collateral Report, such Inventory Access Agreement is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundernot required hereunder.

Inventory. With respect Subject to any of its Inventory scheduled allowances or listed on reserves in the most recent Collateral Financial Statements, Interim Financial Statements or the Closing Date Financial Report, and to any increase in such allowances or reserves made through the Closing Date in accordance with GAAP, the Inventory of the Target and each Subsidiary (a) such Inventory consists only of items of quality and quantity commercially usable and salable (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ hereinafter defined) in the ordinary course of businessthe business of the Target and each Subsidiary, (b) is reasonably related to the normal demands of the business of the Target and each Subsidiary as currently conducted by the Target and each Subsidiary and (c) is not damaged or obsolete. The Inventory in (before allowances or reserves) which is deemed to be "excess" (as hereinafter defined) as of the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does Closing Date will not exceed $10,000,000) is located at one of such Grantor’s locations 1,000,000. Except as set forth on Schedule 2 or Schedule 14 to 4.20, (a) all of the Perfection Certificate, Inventory is owned by the Target and each Subsidiary free of any Encumbrance other than Permitted Encumbrances and is located at the Current Real Property and (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible the Inventory as disclosed reflected in the most recent Collateral ReportFinancial Statements and Interim Financial Statements has been valued at the lower of cost or fair market value, net of reserves, in a manner consistent with past practices and procedures (including, without limitation, the method of computing overhead and other indirect expenses to be applied to inventory) and in accordance with GAAP. Notwithstanding clause (b) of the preceding sentence, the Inventory located at contractors’ premises or ▇▇▇of Gast ▇▇ as reflected in the ordinary Financial Statements and the Interim Financial Statements has been valued using the first-in, first-out (FIFO) method, in a manner consistent with past practice and procedures and in accordance with GAAP. For purposes of this Section 4.20, (a) the term "usable and salable" shall mean Inventory which is in merchantable condition and of the quality regularly sold to customers of the Target and any Subsidiary in the usual course of business, business and (b) Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject shall be deemed to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible "excess" if and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted only to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or extent that (i) of the definition thereof and any other Permitted Encumbrance which does it has not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except already been excluded as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced obsolete in accordance with GAAP and (ii) the Federal Fair Labor Standards Act total amount of 1938any item of Inventory exceeds the aggregate usage of such item for the immediately preceding twelve-month period determined with reference to the sales records of the Target and the Subsidiaries for such period, except that any item of Inventory which relates to products introduced by the Target or any Subsidiary within the immediately preceding twenty-four month period shall be deemed to be "excess" only if the total amount of any such item of Inventory exceeds the aggregate usage of such item, as amendedforecasted in good faith by the Target, and all rules, regulations and orders thereunderfor the immediately following twelve-month period.

Inventory. With respect to (i) Schedule 2(a)(i)(A) and Schedule 2(a)(i)(B) set forth a true and complete listing of the Purchased Inventory of the Seller and all Transferred Customer Owned Inventory held by the Seller, respectively, as of May 18, 2013. Each item of Purchased Inventory is (A) free of any material defect or other deficiency; (B) of its Inventory scheduled or listed on the most recent Collateral Reporta quality, (a) such Inventory (other than Inventory in transitquantity, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ and condition useable and saleable in the ordinary course of businessthe Business (subject to obsolescence reserves); and (C) properly stated on the Financial Statements and books and records of the Seller at the lesser of cost or fair market value on a moving average price (MAP) basis, and Inventory with adequate obsolescence reserves reflected in the form Financial Statements in accordance with IFRS. None of raw materials; provided, that the aggregate amount Purchased Inventory is obsolete (except for the obsolescence reserve) and no write-down of all such Purchased Inventory has been made or should have been made in the form period since January 1, 2012. The quantities of raw materials subject each item of Purchased Inventory are not excessive and are reasonable in the present circumstances of the Business. All Purchased Inventory is located at the Premises, except for such Purchased Inventory that may be located at a customer’s location pursuant to this parenthetical does a Transferred Contract. No Purchased Inventory is held on a consignment basis. (ii) All Transferred Customer Owned Inventory (A) is held only pursuant to a Transferred Contract and not exceed $10,000,000held for resale or otherwise on a consignment basis, (B) is the property of the customer under the corresponding Transferred Contract and the Seller has no claim to any right, title or interest in such Inventory, other than pursuant to the terms and conditions of the corresponding Transferred Contract, (C) is properly recorded and accounted for in the books and records of the Seller, (D) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (Premises and has not been removed therefrom other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) deliveries made or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s businesswork completed under a Transferred Contract, and (eE) such has not been lost, stolen, destroyed or damaged in any way. (iii) The Seller does not hold any Inventory has been produced in accordance with of any other Person other than (A) the Federal Fair Labor Standards Act of 1938, as amendedPurchased Inventory, and all rules, regulations and orders thereunder(B) the Transferred Customer Owned Inventory.

Inventory. With respect Borrower agrees that notwithstanding anything to any the contrary provided herein or elsewhere, and in addition to all of its Inventory scheduled or listed on the most recent Collateral Reportother representations, warrants, agreements and covenants of the Borrower to the Lenders herein and in the other Documents, Borrower hereby represents, warranties, agrees and covenants with and to each of the Lenders (a) such to insure Inventory, and, rights to the proceeds therefrom with each Lender named as loss payee; (b) not to use any Inventory for any unlawful purpose or in any way that would void any insurance required to be carried in connection therewith; (other than c) not to remove Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Borrower’s Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ Locations except in the ordinary course of Debtor’s business; (d) not to permit any security interest in or lien on the Inventory or the proceeds therefrom, and including without limitation, liens arising from the storage of Inventory, except Permitted Liens; (e) not to sell, hypothecate or otherwise dispose of, nor permit the transfer by operation of law of, any of the Inventory in the form or interests therein, except sales of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ buyers in the ordinary course of Borrower’s business; (g) to furnish, within 10 days (or such shorter period as Lender may specify during the existence of an Event of Default) following Lenders’ request therefor, reports to the Lenders of all acquisitions, returns, sales and other dispositions of the Inventory in such form and detail as the form of raw materialsLenders may reasonably require; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) to permit the Lenders to inspect the Inventory during reasonable business hours, upon 15 days (or such shorter period as Lenders may require during the existence of an Event of Default) prior written notice to Borrower, without causing any damage to any Inventory or other interruption of Borrower’s business and all at the Lenders’ sole cost and expense (except during an Event of Default, which during such period all costs and expenses shall be paid by the Borrower to each Lender upon request); (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Partiesto keep, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938generally accepted accounting principles, as amendedcomplete and accurate records regarding all Inventory and proceeds thereof, and all rules, regulations to permit the Lenders to inspect the same and orders thereundermake copies thereof at any reasonable time and (j) not to sell the Inventory on terms and conditions not standard in the industry.

Inventory. With respect to any Inventory of its Inventory scheduled or listed on the most recent Collateral Report, Borrower: (ai) such Inventory (other than except for Inventory in transit, Inventory excluded from Eligible Inventory as disclosed transit or in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course possession of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000such Covered Person's customers) is located at one or another of the premises listed in section 0 of the Disclosure Schedule as being a location of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to Borrower's Inventory; (ii) the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor applicable Covered Person has good, indefeasible good and merchantable title to such Inventory or a good and valid leasehold interest as lessee to such Inventory is not Inventory, subject to any Lien or security interest or document no Security Interest whatsoever except for the security interest perfected Security Interest granted to the Administrative Agent hereunder for the benefit of Lenders and Permitted Security Interests; (iii) such Inventory is of good and merchantable quality, free from any known material defects; (iv) Borrower now keeps and will keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, Borrower's cost therefor and the selling price thereof or the rental/lease rate thereof, the daily withdrawals therefrom and the additions thereto; (v) except as may be permitted by Section 13.12.2, Inventory that is not rented or leased will not be stored with a bailee, repairman, warehouseman or similar party without Administrative Agent's prior written consent, and if Administrative Agent consents (which such consent shall not be unreasonably withheld or delayed), Borrower will, concurrently with delivery to such party, cause any such party to issue and Lender Partiesdeliver to Administrative Agent, in form acceptable to Administrative Agent, warehouse receipts, in Administrative Agent's name evidencing the storage of such Inventory, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) waivers of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien warehouseman's liens in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.Agent;

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, Inventory: (a) such the Borrowers and Borrowing Base Guarantors shall at all times maintain records of Inventory reasonably satisfactory to Collateral Agents, keeping correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, the cost therefor and daily withdrawals therefrom and additions thereto; (other than Inventory in transitb) any of the Administrative Agents’ and Collateral Agents’ officers, Inventory excluded from Eligible Inventory as disclosed employees or agents shall have the right, at any time or times, in the most recent name of such Administrative Agent or Collateral ReportAgent, as applicable, any designee of the Administrative Agents, Collateral Agents or the Borrowers, to verify the validity, amount or any other matter relating to Accounts or Inventory located at contractors’ premises by mail, telephone, electronic communication, personal inspection or otherwise and to conduct field audits of the financial affairs and Collateral of the Loan Parties, and the Borrowers shall cooperate fully with the Administrative Agents and Collateral Agents in an effort to facilitate and promptly conclude any such verification process; (c) the Loan Parties shall cooperate fully with the Collateral Agents and their agents during all Collateral field audits and Inventory Appraisals which shall be conducted, in each case, (i) by persons acceptable to the Collateral Agents (it being understood that Great American Appraisal & Valuation Services, L.L.C. and the ▇▇▇▇▇▇ Group are deemed acceptable to the Collateral Agents), (ii) at the expense of the Borrowers and (iii) (A) (1) not more than once in any twelve (12) month period or (2) following either (x) a time period when Excess Availability (without taking into account the ordinary course deduction of business, and Inventory the Total Minimum Availability Requirement from the computation of Excess Availability as set forth in clause (e) of the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical definition thereof) does not exceed $10,000,00090,000,000 or (y) is located a Trigger Event, more frequently at one of any Collateral Agent’s reasonable request or (B) at such Grantor’s locations set forth additional other times as Borrowers shall reasonably determine; (d) neither the Borrowers nor any Borrowing Base Guarantor shall sell Inventory to any customer on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is nowapproval, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), basis which entitles the customer to return (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder right of customers for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (hInventory which is defective or non-conforming) or may obligate any Loan Party to repurchase such Inventory; and (ie) of Borrowers and Borrowing Base Guarantor shall keep the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien Inventory in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than The Debtor will keep its Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods Goods arising in the ordinary course of such Grantorthe Debtor’s business, and (e) such . The Debtor agrees that all Inventory has been produced by the Debtor in the United States of America will be produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations regulations, and orders thereunder. The Debtor will conduct a physical count of the Inventory at least once during each of its fiscal years, and after and during the continuation of any Event of Default, at such other times as the Collateral Agent requests. The Debtor will maintain a perpetual inventory reporting system at all times. The Debtor will not, without the Collateral Agent’s written consent, sell any Inventory on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis, other than the sale of finished goods Inventory to The Home Depot, Lowe’s and/or an Lowe’s Distributor on consignment in accordance with The Home Depot Consignment Agreements, the Lowe’s Consignment Agreements, the Lowe’s Distributor Agreements and all other documents related to the consignment arrangements between the Debtor and each of The Home Depot, Lowe’s and the Lowe’s Distributors, true and complete copies of which on the date hereof have been provided to the Collateral Agent (collectively, the “Consignment Agreements”). The Debtor agrees that it (i) shall provide the Collateral Agent a copy of any material amendment, restatement, replacement, supplement or other modification of or to any of the Consignment Agreements not later than twenty (20) days after the effective date of any such amendment, restatement, replacement, supplement or other modification, (ii) shall immediately notify the Collateral Agent in writing of the occurrence of any default or event of default under or with respect to, or the termination of, any of the Consignment Agreements, (iii) unless prohibited by the Consignment Agreements, shall file and continuously maintain without any lapse in filing appropriate financing statements appropriately completed for filing under the Uniform Commercial Code of each jurisdiction in which the filing of a financing statement may be required, or reasonably requested by the Collateral Agent naming each of The Home Depot, Lowe’s and each Lowe’s Distributor as debtor, the Debtor as secured party and the Collateral Agent as assignee with respect to the Inventory that has been sold to each of The Home Depot, Lowe’s and the Lowe’s Distributors on consignment, (iv) upon request of the Collateral Agent, shall deliver to the Collateral Agent copies of reports, and updates of such reports as the Collateral Agent shall reasonably request, from an independent search service reasonably satisfactory to the Collateral Agent listing all effective financing statements that name The Home Depot, Lowe’s or any Lowe’s Distributor as debtor that are filed in the appropriate jurisdictions, together with copies of such financing statements, and the Debtor shall deliver to the Collateral Agent copies of all notices that the Debtor has sent to secured parties of record disclosed by such reports that have filed financing statements covering inventory of The Home Depot, Lowe’s or any Lowe’s Distributor manufactured by the Debtor, which notices shall be in form and substance satisfactory to the Collateral Agent, and (v) upon request of the Collateral Agent, shall deliver to the Collateral Agent all reports, lists, certificates and other papers required to be delivered by The Home Depot, Lowe’s or any Lowe’s Distributor under the applicable Consignment Agreements. (b) In connection with any Inventory financed by a Letter of Credit with a face amount in excess of $500,000, the Debtor will, at the Collateral Agent’s request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, Documents or Instruments in which the Collateral Agent holds a security interest to deliver them to the Collateral Agent and/or subject to the Collateral Agent’s order, and if they shall come into the Debtor’s possession, to deliver them, upon request, to the Collateral Agent in their original form. The Debtor shall also, at the Collateral Agent’s request, designate the Collateral Agent as the consignee on all bills of lading and other negotiable and non-negotiable Documents.

Inventory. With respect All Inventory included in any Borrowing Base Certificate delivered to any the Agent pursuant to SECTION 8.10(D) meets the criteria enumerated in the definition of its Inventory scheduled or listed on the most recent Collateral ReportEligible Inventory, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory except as disclosed in such Borrowing Base Certificate or in a subsequent Borrowing Base Certificate (with respect to a change in Cost value of $500,000 or more) or as otherwise specifically and promptly disclosed in writing to the most recent Collateral ReportAgent. All Eligible Inventory is in good condition, meets all material standards imposed by any governmental agency or department or division thereof having regulatory authority over such goods, their use or sale, and is currently either usable or saleable in the normal course of Borrower's business, except to the extent reserved against in the financial statements delivered pursuant to SECTION 6.1(L) and ARTICLE 10 or as disclosed on a Schedule of Inventory delivered to the Agent pursuant to SECTION 8.10(C). The Agent may rely on all statements, warranties or representations made in any Schedule of Inventory in determining which items of Inventory listed in such Schedule are to be deemed Eligible Inventory. Set forth on SCHEDULE 6.1(R) as of the Effective Date is the (i) address (including street, city, county and state) of each facility at which Inventory is located, (ii) the approximate Cost value of the Inventory located at contractors’ premises each such facility, (iii) if the facility is leased or ▇▇▇▇▇ is a third party warehouse or processor location, the name of the landlord or such third party warehouseman or processor and (iv) if the Inventory is consigned, all outstanding consignment and memo contract agreements to which Borrower is a party (provided that Credit Parties shall provide Agent with prompt written notice of any change in (A) the ordinary course approximate Cost value of business$500,000 or more of the Inventory located at any facility listed on SCHEDULE 6.1(R) or (B) any information on SCHEDULE 6.1(R) with respect to CLAUSES (I), (III) and (IV) hereof). All Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at on the premises set forth on SCHEDULE 6.1(R) or is in transit to one of such Grantor’s locations locations, except as otherwise promptly disclosed in writing to the Agent; Borrower has not had Inventory located at premises other than those set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (bSCHEDULE 6.1(R) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such during the four months immediately preceding the Effective Date. No Inventory is not subject to any Lien or security interest or document whatsoever except for Liens other than the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent Security Interest and Lender Parties, Permitted Liens described in CLAUSES (A) and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (iE) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereof.

Inventory. With respect As of the date hereof, the Inventory is maintained at the locations specified on Schedule 4.4 attached hereto and by this reference incorporated herein. The Debtor will not permit any Inventory having an aggregate value of $500,000 or greater to be maintained or stored in any of its Inventory scheduled or location other than those listed on Schedule 4.4 without giving the most recent Collateral ReportAgent at least thirty (30) days’ prior written notice and, unless prior to such change, the Debtor shall have taken all action reasonably necessary or desirable or that the Collateral Agent may reasonably request, to preserve, perfect, confirm and protect in the manner and to the extent provided for in this Security Agreement the security interests granted hereby. The Debtor does not store and will not store any Inventory on any real property that is not owned by the Debtor in fee simple, except for (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in transit to manufacturing plants or warehouses owned or leased by the most recent Collateral Report, Inventory located at contractors’ premises Debtor or ▇▇▇▇▇ to customers in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ on premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000a lease of real property under which the Debtor is the lessee (each such lease, a “Lease”) is now, for which the Collateral Agent has received an executed landlord waiver or shall at subordination from the landlord (and any time or times hereafter be stored at any other location except as permitted by Section 4.1(gmortgagee) of such premises in form and substance satisfactory to the Collateral Agent (a “Lien Waiver”), (c) such Grantor Inventory on premises subject to a Lease for which the Collateral Agent has goodnot received a Lien Waiver, indefeasible and merchantable title to provided that the aggregate value of all such Inventory and such Inventory is shall not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Partiesexceed $500,000, (d) except as specifically disclosed Inventory in a warehouse or with a bailee for which the most recent Collateral ReportAgent has received an executed warehouseman’s or bailee’s letter agreement in form and substance satisfactory to the Collateral Agent (a “Bailee Letter”), (e) Inventory in a warehouse or with a bailee for which the Collateral Agent has not received a Bailee Letter, provided that the aggregate value of all such Inventory is Eligible shall not exceed $500,000, (f) Inventory of good and marketable conditionin The Home Depot distribution centers pursuant to The Home Depot Consignment Agreements, except for damaged or defective goods arising (g) Inventory in Lowe’s distribution centers pursuant to the ordinary course of such GrantorLowe’s businessConsignment Agreements, and (eh) Lowe’s “private label” Inventory held by certain distributors selected by Lowe’s (each, a “Lowe’s Distributor”) in each case pursuant to a distributor and consignment agreement between Trex and such Inventory has been produced Lowe’s Distributor (each a “Lowe’s Distributor Agreement” and collectively, the “Lowe’s Distributor Agreements”), provided that the Collateral Agent shall have received from each such Lowe’s Distributor a consignee agreement in accordance with form and substance satisfactory to the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderCollateral Agent.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Promptly after the Termination Effective Date, Immunomedics will make, and Amgen will cooperate with Immunomedics' reasonable requests in making, appropriate arrangements for the shipment from Amgen to Immunomedics at Immunomedics' principal place of business identified in the first paragraph hereof or such other location or locations as may be determined by Immunomedics, Amgen's inventory of Epratuzumab and antibody cell line samples as listed in Exhibit B (collectively, "Amgen Inventory"). For the avoidance of doubt, Amgen has no obligation to deliver to Immunomedics [*] (the "Amgen Materials"). Subject to the Amgen Retained License, Amgen shall destroy any such Amgen Materials within sixty (60) days after the Termination Effective Date and shall, upon written request, so certify to Immunomedics in writing. (b) Subject to Immunomedics making appropriate shipping arrangements as provided in the first sentence of Section 4(a), Amgen will effect the delivery of Amgen Inventory (other than to the extent not previously delivered to Immunomedics as indicated on Exhibit B hereto) to Immunomedics' designated shipping company at the Amgen Premises (the "Delivery") within ten (10) business days after the Termination Effective Date. Upon Delivery, all Amgen Inventory in transitshall be free and clear of all liens, claims or encumbrances of any kind or nature arising from any action of Amgen. Risk of loss for all Amgen Inventory excluded from Eligible Inventory shall rest with Immunomedics after the Termination Effective Date, except to the extent that loss arises as disclosed a result of the [*] of Amgen in the most recent Collateral Report, storage and handling thereof. (c) All Amgen Inventory located at contractors’ premises or ▇▇▇▇▇ in is being transferred to Immunomedics on an "as is" and "with all faults" basis and Amgen assumes no responsibility therefor. Immunomedics agrees to accept the ordinary course of business, Amgen Inventory "as is" and Inventory in the form of raw materials"with all faults"; provided, however, Amgen hereby represents that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded best of its knowledge the Materials which are biological materials are free from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises infectious or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, adventitious agents. (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and [*] (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, Immunomedics hereby agrees to defend and indemnify and hold harmless Amgen from and against any and all rulesclaims, regulations and orders thereunderliability or damage arising from or relating to the use, storage, handling, distribution or other exploitation of Amgen Inventory after delivery thereof to Immunomedics pursuant to this Agreement.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportInventory, the Borrower and the Subsidiaries will: (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located maintain an accurate inventory accounting system at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificatetimes, (b) no conduct a physical count of the Inventory at least once per Fiscal Year, and at such other times as the Lender requests, and shall promptly, upon completion, supply the Lender with a copy of such count accompanied by a report of the value of such Inventory (valued at the lower of cost, on a first-in, first-out basis, or market value) (c) as soon as possible upon demand by the Lender from time to time, prepare and deliver to the Lender designations of Inventory specifying the Borrower’s and Subsidiaries’ cost of Inventory, the retail price thereof, and such other than Inventory in transit, Inventory excluded from Eligible matters and information relating to the Inventory as disclosed the Lender may reasonably request; (d) keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, the Borrower’s and Subsidiaries’ cost therefore and the selling price thereof, all of which records shall be available to the officers, employees or agents of the Lender upon demand for inspection and copying thereof; (e) not store any Inventory with a bailee, warehouseman or similar Person without the Lender’s prior written consent, which consent may be conditioned on, among other things, delivery by the bailee, warehouseman or similar Person to the Lender of warehouse receipts, in form acceptable to the Lender, in the most recent Collateral Reportname of the Lender evidencing the storage of Inventory and the interests of the Lender therein; (f) permit the Lender and its agents or representatives to inspect and examine the Inventory and to check and test the same as to quality, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessquantity, value and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall condition at any time or times hereafter be stored during the Borrower’s and Subsidiaries’ usual business hours or at any other location except as permitted by Section 4.1(g)reasonable times and (g) at the Lender’s request, (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and designate the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such consignee on all bills of lading and other negotiable and non-negotiable documents. The Borrower shall be permitted to sell its Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with its business until the Federal Fair Labor Standards Act occurrence of 1938, as amended, and all rules, regulations and orders thereunderan Event of Default.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than The Debtor will keep its Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods Goods arising in the ordinary course of such Grantorthe Debtor’s business, and (e) such . The Debtor agrees that all Inventory has been produced by the Debtor in the United States of America will be produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations regulations, and orders thereunder. The Debtor will conduct a physical count of the Inventory at least once during each of its fiscal years, and after and during the continuation of any Event of Default, at such other times as the Collateral Agents request. The Debtor will maintain a perpetual inventory reporting system at all times. The Debtor will not, without the Collateral Agents’ written consent, sell any Inventory on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis, other than the sale of finished goods Inventory to The Home Depot and Lowe’s on consignment in accordance with The Home Depot Consignment Agreements, the Lowe’s Consignment Agreements and all other documents related to the consignment arrangements between the Debtor and each of The Home Depot and Lowe’s, true and complete copies of which on the date hereof have been provided to the Collateral Agents (collectively, the “Consignment Agreements”). The Debtor agrees that it (i) shall provide the Collateral Agents a copy of any material amendment, restatement, replacement, supplement or other modification of or to any of the Consignment Agreements not later than twenty (20) days after the effective date of any such amendment, restatement, replacement, supplement or other modification, (ii) shall immediately notify the Collateral Agents in writing of the occurrence of any default or event of default under or with respect to, or the termination of, any of the Consignment Agreements, (iii) unless prohibited by the Consignment Agreements, shall file and continuously maintain without any lapse in filing appropriate financing statements appropriately completed for filing under the Uniform Commercial Code of each jurisdiction in which the filing of a financing statement may be required, or reasonably requested by the Collateral Agents naming each of The Home Depot and Lowe’s as debtor, the Debtor as secured party and the Administrative Agent as assignee with respect to the Inventory that has been sold to each of The Home Depot and Lowe’s on consignment, (iv) upon request of the Collateral Agents, shall deliver to the Collateral Agents copies of reports, and updates of such reports as the Collateral Agents shall reasonably request, from an independent search service reasonably satisfactory to the Collateral Agents listing all effective financing statements that name The Home Depot as debtor that are filed in Delaware, together with copies of such financing statements filed in Delaware, and the Debtor shall deliver to the Collateral Agents copies of all notices that the Debtor has sent to secured parties of record disclosed by such reports that have filed financing statements covering inventory of The Home Depot manufactured by the Debtor, which notices shall be in form and substance satisfactory to the Collateral Agents, (v) upon request of the Collateral Agents, shall deliver to the Collateral Agents copies of reports, and updates of such reports as the Collateral Agents shall reasonably request, from an independent search service reasonably satisfactory to the Collateral Agents listing all effective financing statements that name Lowe’s as debtor that are filed in North Carolina, together with copies of such financing statements filed in North Carolina, and the Debtor shall deliver to the Collateral Agents copies of all notices that the Debtor has sent to secured parties of record disclosed by such reports that have filed financing statements covering inventory of Lowe’s manufactured by the Debtor, which notices shall be in form and substance satisfactory to Collateral Agents, (vi) upon request of the Collateral Agents, shall deliver to the Collateral Agents all reports, lists, certificates and other papers required to be delivered by The Home Depot under The Home Depot Consignment Agreements, and (vii) upon request of the Collateral Agents, shall deliver to the Collateral Agents all reports, lists, certificates and other papers required to be delivered by Lowe’s under the Lowe’s Consignment Agreements. (b) In connection with any Inventory financed by a Letter of Credit with a face amount in excess of $500,000, the Debtor will, at the Collateral Agents’ request, instruct all suppliers, carriers, forwarders, customs brokers, warehouses or others receiving or holding cash, checks, Inventory, Documents or Instruments in which the Administrative Agent holds a security interest to deliver them to the Administrative Agent and/or subject to the Administrative Agent’s order, and if they shall come into the Debtor’s possession, to deliver them, upon request, to the Administrative Agent in their original form. The Debtor shall also, at the Collateral Agents’ request, designate the Administrative Agent as the consignee on all bills of lading and other negotiable and non-negotiable Documents.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Each Grantor shall at all times maintain Inventory records consistent with past practices, keeping correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory and the cost therefor. (b) The Grantors shall conduct a physical count of the Inventory either through periodic cycle counts or wall to wall counts, so that all Inventory is subject to such Inventory counts at least once each year but at any time or times as the Administrative Agent may request after an Event of Default has occurred and is continuing, and promptly following such physical inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed whether through periodic cycle counts or wall to wall counts) shall supply the Administrative Agent with a report in the most recent Collateral Reportform and with such specificity as may be satisfactory to the Administrative Agent concerning such physical count. (c) The Grantors shall not remove any Inventory from the locations set forth or permitted herein, without the prior written consent of Agent, except for sales of Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, its business and except to move Inventory directly from one location set forth or permitted herein to another such location and except for Inventory shipped from the manufacturer thereof which is in transit to the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 permitted herein. (d) Upon the Administrative Agent’s request, the Grantors shall deliver or cause to be delivered to the Perfection Certificate, (b) no Inventory (other than Administrative Agent written appraisals as to the Inventory in transitform, Inventory excluded from Eligible Inventory as disclosed in scope and methodology reasonably acceptable to the most recent Collateral ReportAdministrative Agent and by an appraiser reasonably acceptable to the Administrative Agent, Inventory located at contractors’ premises or ▇▇▇▇▇ in addressed to the ordinary course of business, Administrative Agent and Inventory in Lenders and upon which the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject Administrative Agent and Lenders are expressly permitted to this parenthetical does not exceed $10,000,000rely: (i) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for may reasonably request at the benefit expense of the Administrative Agent and Lender PartiesLenders and (ii) at any time or times as the Administrative Agent may request at the expense of the Grantors at any time after an Event of Default exists or has occurred and is continuing; provided that the Grantors may satisfy the requirements set forth in this clause (d) by delivering to the Administrative Agent a copy of any appraisals delivered to, and Liens constituting a Permitted Encumbrance pursuant to clause in form and substance satisfactory to, the Revolving Loan Administrative Agent, so long as such appraisal (a), A) is dated as of recent date and (b), (f), (hB) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of expressly permits reliance by the Administrative Agent and the Lender PartiesLenders or is accompanied by a letter, (d) except as specifically disclosed in form and substance reasonably satisfactory to the most recent Collateral ReportAdministrative Agent and signed by the appraiser, such Inventory is Eligible Inventory of good permitting the Administrative Agent and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and Lenders to rely thereon. (e) such The Grantors shall produce, use, store and maintain the Inventory has been produced with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938, as amended, amended and all rules, regulations and orders thereunderrelated thereto). (f) The Grantors shall not sell Inventory to any customer on approval, or any other basis which entitles the customer to return or may obligate the Grantors to repurchase such Inventory; except for the right of return given to retail customers of the Grantors in the ordinary course of the business of the Grantors in accordance with the then current return policy of the Grantors. (g) The Grantors shall keep the Inventory in good and marketable condition (subject to normal reserves for damaged and defective Inventory).

Inventory. With respect In the event that on or prior to the Closing Date, any portion of its the Inventory scheduled is rendered undeliverable or listed on non-saleable (an “Inventory Loss”), Buyer shall be required to consummate the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businessClosing, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such GrantorBuyer’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title sole remedy with respect to such Inventory Loss shall be to seek indemnification pursuant to Section 6.3, subject to the limitations set forth in Section 6.3(e), provided that if such Inventory Loss exceeds ten percent (10%) of the Inventory (as determined based upon the Purchase Order Price of the damaged or non-saleable Inventory as compared to the Purchase Order Price of all of the Inventory) and such Inventory Loss is the result of a Catastrophic Event, amounts paid under this Section 6.3(i) shall not subject count towards the minimum or against the maximum liability amounts set forth in Section 6.3(e) applicable to other types of Losses. For purposes hereof, a “Catastrophic Event” shall mean: (x) any Lien event or security interest series of events such as fire, flood, earthquake, tornado, unusual or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit severe weather conditions or other natural disasters or acts of God, acts of war (whether declared or not), sabotage or terrorism, riots, civil disturbances or disorders, strikes and labor unrest, explosions, governmental requisitions, extraordinary electrical or mechanical failures or perils of the Administrative Agent sea, that causes or results in an Inventory Loss; and Lender Parties(y) any willful, and Liens constituting a Permitted Encumbrance pursuant intentional or grossly negligent act or omission taken by Seller or RDA which directly caused such Inventory Loss. The amount to clause (a), (b), (f), (hbe paid by Seller to Buyer under this Section 6.3(i) or (i) in the event of an Inventory Loss covered hereby shall be equal to 10% of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor Purchase Order Price of the Administrative Agent undeliverable or non-saleable Inventory, except that the Purchase Order Price for any Inventory with respect to which Seller’s (and through the Lender Partiesassumption of the respective Inventory Agreements, Buyer’s) right to sell or distribute the same expires on or before June 30, 2009, shall be deemed to be zero (d) except as specifically disclosed $0.00). In no event shall Buyer be entitled to recover, in the most recent Collateral Reportaggregate, such more than Five Million and No/100 Dollars ($5,000,000) in connection with Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderLosses.

Inventory. With Lender may rely, in determining which Inventory is Eligible Inventory, on all statements and representations made by Borrower with respect to any of its Inventory scheduled or Inventory. Unless otherwise indicated in writing to Lender, with respect to all Eligible Inventory, Borrower represents that at any time a Revolver Loan is outstanding: (a) it is located at an address listed on the most recent Collateral Report, Information Certificate; (ab) if such Inventory is stored at a leased location or a warehouse or is held by a bailee, a landlord/warehouseman/bailee lien waiver satisfactory to Lender has been delivered with respect thereto; (other than c) if such Inventory is stored at an owned location subject to a mortgage, a mortgagee waiver satisfactory to Lender has been delivered with respect to such location; (d) the Inventory is genuine and in transitall respects what it purports to be; (e) the Inventory was acquired through a completed, bona fide sale and delivery of the Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, Borrower’s business and Inventory in accordance with the form of raw materials; provided, that the aggregate amount terms and conditions of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificatepurchase orders, (b) no Inventory (other than Inventory in transitcontracts, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is nowservice agreements, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g)documents relating thereto and forming a part of the contract between Borrower and the applicable supplier, (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory was not acquired on any consignment basis nor is sale of such Inventory by Borrower subject to any commission of any sort; (f) the Inventory, and Lender’s security interest in such Inventory, is not, and will not (by voluntary act or omission by Borrower), be in the future, subject to any offset, Lien, deduction, defense, dispute, counterclaim or any other adverse claim, and such Inventory is owned by Borrower in all respects and is not subject to any Lien competing claim for any reason; (g) there are no facts, events or security interest or document whatsoever except for occurrences that in any way impair the security interest granted to salability or, in the Administrative Agent hereunder for the benefit case of Human Organs, useability of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant Inventory or tend to clause (a), (b), (f), reduce the realizable value thereof; (h) to the best of Borrower’s knowledge, the supplier of the Inventory had the capacity to contract at the time any contract or other document relating to such Inventory was executed; (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced fully paid for or full payment is not yet past due in accordance with any sales contracts, purchase orders or applicable agreements relating to the Federal Fair Labor Standards Act purchase of 1938, as amended, such Inventory; and (j) Borrower has obtained and all rules, regulations and orders thereundercurrently has any Governmental Approvals that are necessary in order to sell or distribute the Inventory.

Inventory. With respect Except for any Inventory which has been duly reported to any of its Inventory scheduled --------- the Agent as obsolete or listed on the most recent Collateral Reportotherwise ineligible, each Borrower (aas to itself only) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, represents and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 warrants to the Perfection Certificate, (b) no Agent and each of the Lenders and agrees with the Agent and each of the Lenders that all of the Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises is and will be held for sale or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is nowlease, or shall at any time or times hereafter to be stored at any other location except as permitted by Section 4.1(g)furnished in connection with the rendition of services, (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s Borrower's business, and is and will be fit for such purposes. Each Borrower (eas to itself only) will keep the Inventory in good and marketable condition, at its own expense. Each Borrower (as to itself only) will maintain a perpetual inventory reporting system at all times. Each Borrower (as to itself only) will conduct physical cycle counts of the Inventory in January, May and September of each year and shall supply the Agent and each of the Lenders with a report setting forth in reasonable detail all variances and reporting the value of such Inventory (valued at the lower of cost, on average cost basis, or market value). Following the occurrence of any Event of Default, each Borrower (as to itself only) shall conduct and report on such additional physical Inventory counts as the Agent may request. Except for sales of an immaterial portion of its Inventory on such basis which have been expressly disclosed to the Agent in writing and is identified as such in the reports delivered pursuant to Section 6.8, neither Borrower will sell any of its Inventory on a ▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval, consignment, or other repurchase or return basis. Except as has been produced expressly disclosed to the Agent prior to Closing Date or is hereafter disclosed in accordance with writing to the Federal Fair Labor Standards Act of 1938Agent and is identified as such in the reports delivered pursuant to Section 6.8, as amendedneither Borrower has any Inventory acquired on, and all rulesor will in the future acquire any Inventory on, regulations and orders thereunderapproval or on a conditional sale, title retention, consignment or similar basis.

Inventory. With respect to any of its Inventory scheduled or listed carried as such on the most recent Collateral Report, Debtor’s financial statements: (a) such Inventory (other than Inventory temporarily in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000transit between such locations) is located at one of such Grantorthe Debtor’s locations set forth on Schedule 2 Exhibit A – Debtor’s Information and Collateral Locations, or Schedule 14 with respect to Inventory sold on a consignment, sale or return or sale or use basis, at the Perfection Certificatefacility of the consignee or purchaser, (b) no Inventory (other than Inventory temporarily in transittransit between locations described in clause (a) of this Section 3.9 or Inventory sold on a consignment, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises sale or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000return or sale or use basis) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor the Debtor has good, indefeasible and merchantable title to such Inventory (other than the Inventory sold on a consignment, sale or use or sale or return basis, as to which it has the right to reclaim such Inventory what is not sold or used as provided in the applicable terms of sale) and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest Lien granted to the Administrative Agent hereunder Secured Party, for the benefit of the Administrative Agent and Lender Partiesholders of the Bonds or the rights of the purchasers purchasing on a consignment sale or return or sale or use basis, and except for Liens constituting a Permitted Encumbrance pursuant to clause (apermitted under Section 4.1(e), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable conditionmerchantable quality, except for damaged or defective goods arising in the ordinary course of such Grantor’s businessfree from any material defects, and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory unless the interest of the Debtor as licensee in such license or intellectual property has been collaterally assigned to the Secured Party pursuant to the Loan Documents, (f) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder, and (g) the completion of manufacture, sale or other disposition of such Inventory by the Secured Party following and during the continuance of an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which the Debtor is a party or to which such property is subject.

Inventory. With respect to any of the Inventory, the Borrower and its Inventory scheduled or listed on the most recent Collateral Report, Domestic Subsidiaries will: (a) as soon as possible upon demand by the Lender from time to time, prepare and deliver to the Lender designations of Inventory specifying the Borrower's and Domestic Subsidiaries" cost of Inventory and such Inventory (other than Inventory in transit, Inventory excluded from Eligible matters and information relating to the Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materialsLender may reasonably request; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, the Borrower's and Domestic Subsidiaries" cost therefor and the selling price thereof, all of which records shall be available to the officers, employees and agents of the Lender upon demand in transit, Inventory excluded from Eligible Inventory as disclosed in accordance with the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, terms hereof for inspection and Inventory in the form of raw materialscopying thereof; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), and (c) such Grantor has good, indefeasible and merchantable title to such not store Inventory and such Inventory is not subject to any Lien having an aggregate value (determined at the lesser of cost or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (imarket value) of any greater than Two Hundred Fifty Thousand Dollars ($250,000) at any one time with a bailee, warehouseman or similar Person without the definition thereof Lender's prior written consent (unless such bailee, warehouseman or Person has executed and any other Permitted Encumbrance which does not have priority over the Lien delivered a Bailee Waiver in favor of the Administrative Agent Lender and/or such other instruments or documents as Lender may reasonably request), which consent shall not be unreasonably withheld and may be conditioned on prior to storage (i) the filing of appropriate financing statements in the jurisdiction in which such warehouse or other facility is located, (ii) delivery by the bailee, warehouseman or similar Person to the Lender of (A) warehouse receipts, in form acceptable to the Lender, in the name of the Lender evidencing the storage of Inventory and the interests of the Lender Parties, therein and (dB) except as specifically disclosed an acknowledgment of receipt of notice of the Liens of the Lender in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s businessBorrower's Inventory, and (eiii) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderother reasonable conditions.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Seller provided Buyer with access to a list of Inventory which is true and complete as of the date of such list. There have been no changes in the Inventory from that disclosed in such list between the date thereof and the date hereof except (other than i) normal amounts of Inventory which have become unmerchantable due to approaching or passing guaranty date(s), normal amounts of Inventory damaged while in Seller's possession or in transit, normal amounts of Inventory excluded containing hidden damage, normal amounts of Inventory which have spoiled and normal amounts of Inventory otherwise salable which have been discontinued, (ii) changes resulting from Eligible Inventory as disclosed purchases in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ normal amounts in the ordinary course of business, and Inventory in the form (iii) sales of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ products in the ordinary course of business, and (iv) sales of products in bulk which have been fully disclosed to Buyer in writing prior to the execution hereof, (v) substantial increases in the level of Inventory in connection with the form initial stocking of raw materials; providedthe Seller's new facility in Mounds View, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g)Minnesota, (cvi) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising inventory adjustments in the ordinary course of such Grantor’s business, ; and (evii) as set forth in Schedule 4.21. (b) No product liability claims are pending or, to Seller's knowledge, threatened against Seller or in respect of goods sold by it. (c) The Inventory reflected on Seller's balance sheet as of June 25, 2002 consists only of items of quality and quantity fully usable and salable in the ordinary course of the Business, except for any normal amounts of Inventory which have become unmerchantable due to approaching or passing guaranty date(s), normal amounts of Inventory damaged while in Seller's possession or in transit, normal amounts of Inventory containing hidden damage, normal amounts of Inventory which have spoiled, normal amounts of Inventory otherwise salable which have been discontinued, or as set forth on Schedule 4.21 (collectively, the "Unmerchantable Inventory"). To the best of Seller's knowledge, the Seller has included an adequate reserve in its balance sheet as of June 25, 2002, for such Unmerchantable Inventory. Except as set forth in Schedule 4.21, the present quantities of all Inventory has been produced are reasonable in accordance the present circumstances of the Business. (d) For purposes of this Section 4.21, all references to "normal amounts of Inventory" shall mean amounts which are consistent with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderSeller's historical experience.

Inventory. With respect to any Inventory of its Inventory scheduled or listed on the most recent Collateral Reportsuch Grantor, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory except as specifically disclosed in the most recent Collateral Report, Report delivered to Agent pursuant to the terms of this Security Agreement or the Credit Agreement: (i) such Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on in Schedule 2 or III hereto (as such Schedule 14 III may be modified and updated from time to the Perfection Certificatetime by written notice to Agent), (b) no Inventory (other than Inventory in transitexcept for inventory which, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory is in transit either (x) from a supplier to such Grantor, (y) between the form of raw materials; provided, that the aggregate amount of all Inventory locations specified in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is nowSchedule III, or (z) to customers of such Grantor; (ii) such Inventory is not now stored, nor shall at any time or times hereafter be stored stored, at any leased location without Agent’s prior written consent, and if Agent provides such consent, each applicable Grantor will concurrently therewith obtain, to the extent required by the Credit Agreement, a landlord agreement in form and substance reasonably satisfactory to Agent in place with respect to such location; (iii) such Inventory is not now stored, nor shall at any time or times hereafter be stored, with a bailee or warehousemen without, to the extent required by the Credit Agreement, a bailee letter delivered to Agent in form and substance reasonably satisfactory to Agent; (iv) such Inventory is not now located, nor shall at any time or times hereafter be located, at a location subject to a mortgage in favor of a lender other location except as permitted than Agent without, to the extent required by Section 4.1(g)the Credit Agreement, a mortgagee waiver delivered to Agent in form and substance reasonably satisfactory to Agent; (cv) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest Lien granted to the Administrative Agent hereunder hereunder, for the benefit of the Administrative Agent and Lender PartiesLenders, and Liens constituting a except for Permitted Encumbrance pursuant to clause Encumbrances; (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (dvi) except as specifically disclosed in the most recent Collateral ReportReport delivered to Agent, such Inventory is constitutes Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and merchantable quality; (evii) such Inventory has been produced in accordance is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties that would require any consent of any third party upon sale or disposition of such Inventory or the Federal Fair Labor Standards Act payment of 1938any monies to any third party upon such sale or other disposition; and (viii) the completion of manufacture, as amended, sale or other disposition of such Inventory by Agent following an Event of Default shall not require the consent of any Person and all rules, regulations and orders thereundershall not constitute a breach or default under any Contract or agreement to which such Grantor is a party or to which such Inventory is subject.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) except as expressly permitted under any Loan Document, such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 2B to the Perfection CertificateCertificate (other than (i) retail operating store locations, (ii) any Inventory in transit with a common carrier, (iii) any third party warehouse locations where any Inventory is held for not more than 60 days pending delivery to a store upon the initial opening thereof (including the initial opening after the renovation or remodeling of a store), (iv) any location if the aggregate fair value of the Inventory maintained at such location does not exceed $1,000,000 or (v) any other location in the continental United States of which such Grantor shall have notified the Administrative Agent in writing where such Inventory is located in any third party warehouse or in the possession of a bailee (other than a third party processor)), as such Schedule 2B to the Perfection Certificate shall be updated by the Company and delivered to the Administrative Agent not less often than annually, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as expressly permitted by Section 4.1(g)under any Loan Document, (c) such Grantor has good, indefeasible good and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest Lien granted to the Administrative Agent hereunder Agent, for the benefit of the Administrative Agent and the other Lender Parties, and Liens constituting a except for Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender PartiesLiens, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good Report and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, such Inventory is in good and marketable condition, free from any defects which would render it non-saleable in the ordinary course, (e) to such Grantor’s knowledge, such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (f) the sale or other disposition of such Inventory by the Administrative Agent during the existence of an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

Inventory. With respect Unless or until Lender notifies Borrower in writing that Lender has dispensed with any one or more of the following requirements, Borrower shall: (i) not remove the Inventory from the Collateral Locations described in the Agreement; (ii) promptly, and in any event within five (5) days of the receipt thereof, deliver such certification schedules and information relating to any of its the Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from and Eligible Inventory as disclosed in Lender may reasonably request; (iii) keep correct and accurate records itemizing and describing the most recent Collateral Reportkind, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course type, quality and quantity of businessInventory, Borrower’s costs, therefore, selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available to Lender, its officers, employees and agents upon demand for inspection and copying; (iv) concurrently, with the delivery of any of the Inventory to a bailee, warehousemen or similar party, deliver to Lender, in form acceptable to Lender, warehouse receipts in Lender’s name evidencing the form storage of raw materials; provided, that Inventory; (v) allow Lender to have the aggregate amount of all Inventory in right upon the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, demand and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible during Borrower’s usual business hours to inspect and merchantable title to such examine Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except check and test the same as to quality, quantity, value and condition. Borrower agrees to reimburse Lender for the security interest granted to the Administrative Agent hereunder for the benefit its reasonable costs and expenses in doing so; (vi) conduct a physical count of the Administrative Agent Inventory at such intervals as Lender may request and promptly supply Lender Parties, and Liens constituting with a Permitted Encumbrance pursuant to clause copy of such counts accompanied by a report of the value (a), (b), (f), (h) valued at the lower of cost or (imarket value) of the definition thereof and any Inventory; (vii) if sales of Inventory are made for cash, Borrower shall immediately deliver to Lender the identical checks, cash or other Permitted Encumbrance forms of payment which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, Borrower receives (d) except as specifically disclosed only in the most recent Collateral Report, such Inventory is Eligible Inventory event Lender elects to place Borrower on a dominion of good and marketable condition, except for damaged funds arrangement or defective goods arising in the ordinary course of such Grantor’s business, and on Default); (eviii) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundernot acquire consigned Inventory.

Inventory. With (a) All inventory of the Company Group Members (including packaging inventory, point-of-sale inventory and spare parts inventory), whether or not reflected in the Interim Balance Sheets, consists of a quality and quantity usable and salable in the Ordinary Course, except for the normal and customary allowances for loss or spoilage, obsolescence, damage, defective, slow-moving or otherwise unsellable products that have been written off or written down to fair market value or for which adequate reserves have been established in accordance with GAAP (“Unsellable Inventory”). All such inventory is owned by the Company Group Members free and clear of all Liens (other than Permitted Liens), and no inventory is held on a consignment basis. The quantities of each item of inventory (whether raw materials, work-in-process or finished goods) are not excessive, but are reasonable in the present circumstances of the Company Group Members. (b) The bulk distilled spirits and other raw materials inventory used or held for use in the Business at a production facility or a warehousing facility (the “Raw Materials Inventory”) has the properties necessary to permit it to be made in the Ordinary Course into Finished Goods Inventory of a quality and type consistent with past practice, except for Unsellable Inventory. All of the Finished Goods Inventory is of a quality usable and salable in the Ordinary Course, except for Unsellable Inventory. All of the Finished Goods Inventory has been packaged, produced and labeled in accordance with applicable Laws. No Finished Goods Inventory has been labeled or marketed deceptively. All items included in the Raw Materials Inventory and the Finished Goods Inventory are the property of the Company Group Members, free and clear of any Lien other than Permitted Liens, and conform in all material respects to all standards applicable to such inventory or its use or sale imposed by Governmental Authorities. Schedule 3.16(b) sets forth a list of all (x) as of December 31, 2020, bulk whiskey used or held for use in the Business and stored in barrels at a production facility or a warehousing facility, including in each case (i) its name, (ii) its source (where available), (iii) its mash ▇▇▇▇ (▇▇ere available), (iv) its vintage, (v) its age, (vi) its quantity, (vii) its cost per barrel or proof gallon, as applicable, and (viii) the warehouse in which it is located and (y) as of November 30, 2020, Finished Goods Inventory by Product. (c) The quantity of the Raw Materials Inventory and Finished Goods Inventory are, in each case, sufficient for the operation of the Business after the Closing consistent with its operation during the two (2) year period prior to the date of this Agreement. (d) There have been no (i) product recalls or extraordinary product returns in connection with the Business and, to Sellers’ Knowledge, none are threatened or pending or (ii) Actions (whether completed or pending) seeking the recall, suspension or seizure of any Products. All products designed, developed, manufactured, made, produced, provided, distributed, or sold by or on behalf of the Company Group Members or the Business (the “Products” and each a “Product”) and, to Sellers’ Knowledge, all of the Company Group Members’ suppliers’ products used in the manufacture of the Products (the “Supplier Products” and each a “Supplier Product”), are and have been, in compliance with (a) all applicable requirements of Law, including Alcohol Laws standards for product safety, quality and workmanship and (b) the terms and conditions of the Contracts under which the Products have been sold. All packaging, labeling, branding and similar materials relating to the Products are, and have been, in compliance with all requirements of Law, all warnings required by applicable Law and such warnings are in accordance with reasonable industry practice. Schedule 3.16(d) lists all of the Products of the Company Group Members during the three (3) years preceding the Closing Date. (e) There are no express warranties outstanding with respect to any of its Inventory scheduled the Products, or listed on any services rendered, by any Company Group Member in connection with the most recent Collateral ReportBusiness, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed beyond that set forth in the most recent Collateral ReportCompany Group Members’ standard conditions of sale or service, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course copies of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject which have been made available to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderBuyer.

Inventory. With respect Each Obligor shall safeguard, protect and hold all Inventory for the Administrative Agent's account and make no disposition thereof except Permitted Asset Transfers. Each of the Obligors shall sell and ship Inventory to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ customers only in the ordinary course of such Obligor's business, and Inventory in then only on open account and on terms currently being extended by such Obligor to its customers, provided that, absent the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor prior written consent of the Administrative Agent and the Lender PartiesRequired Facility Lenders, (d) except such Obligor shall not sell Inventory on a consignment basis nor retain any lien or security interest in any sold Inventory. Upon the sale, exchange, or other disposition of Inventory, as specifically disclosed herein provided, the security interest in the most recent Collateral ReportInventory provided for herein shall, such Inventory is Eligible Inventory without break in continuity and without further formality or act, continue in, and attach to, all proceeds, including any instruments for the payment of good money, Trade Accounts Receivable, documents of title, shipping documents, chattel paper and marketable condition, except for damaged or defective goods arising in the ordinary course all other cash and non-cash proceeds of such Grantor’s businesssale, exchange or disposition. As to any such sale, exchange or other disposition, the Administrative Agent shall have all of the rights of an unpaid seller, including stoppage in transit, replevin, rescission and reclamation. Each of the Companies shall immediately forward any and all proceeds of any sale or other disposition of Inventory to the Depository Account, and hold any such proceeds (e) such Inventory has been produced including any notes and instruments), in trust for the Administrative Agent on behalf of the Lenders pending delivery to the Administrative Agent. Irrespective of the Administrative Agent's perfection status in any and all of the General Intangibles, including, without limitations, any Patents, Trademarks, Copyrights or licenses with respect thereto, each of the Obligors hereby irrevocably grants the Administrative Agent on behalf of the Agents, the Issuing Bank and the Lenders a royalty free license to sell, or otherwise dispose or transfer, in accordance with the Federal Fair Labor Standards Act Paragraph 12.3 of 1938, as amendedSection 12 of this Financing Agreement, and all rulesthe applicable terms hereof, regulations and orders thereunderof any of the Inventory upon the occurrence of an Event of Default which has not been waived in writing by the Administrative Agent.

Inventory. With Upon termination of this Agreement, termination by MainPointe pursuant to Section 10.2(a) due to a breach by RepliCel with respect to one or more Distribution Products or in its entirety, MainPointe shall sell to RepliCel and RepliCel shall purchase from MainPointe, at the Purchase Price paid for such Distribution Products by MainPointe hereunder, any and all unsold quantities of the Distribution Products affected by the expiration or termination that are held by MainPointe as of the date of such expiration or termination, free and clear of any and all liens, mortgages, encumbrances, pledges, security interests or charges of any nature whatsoever. MainPointe shall ship all such Distribution Products to RepliCel as directed by RepliCel at RepliCel's expense. Upon termination of this Agreement by RepliCel pursuant to Section 10.2(a) due to a breach by MainPointe, Section 10.2(b), Section 10.2(c) or Section 10.4(b), RepliCel shall have the option to purchase unsold quantities of the Distribution Products affected by the expiration or termination that are held by MainPointe as of the date of such expiration or termination, free and clear of any and all liens, mortgages, encumbrances, pledges, security interests or charges of any nature whatsoever. MainPointe shall ship all such Distribution Products to RepliCel as directed by RepliCel at MainPointe's expense. Should RepliCel purchase Distribution Products from MainPointe, the Parties agree that RepliCel shall have the right to Market, sell and distribute Distribution Products purchased by RepliCel pursuant to this Section 10.5(b); provided that, unless otherwise agreed by the Parties, RepliCel shall Market, sell and distribute any such Distribution Products only after they have been repackaged by RepliCel such that the Distribution Products do not bear Product Labels and Inserts, or any other written materials, identifying MainPointe as the distributor of the products and do not contain any MainPointe Trademarks. Upon any other termination event, MainPointe shall be entitled and permitted to continue to sell its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed remaining inventory and Distribution Products to its customers and contacts in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical Territory provided it does not exceed $10,000,000) is located do so at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 any more than a 30% discount to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except average prices for the security interest granted Distribution Products for the six months prior to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundertermination event.

Inventory. With respect Schedule 2.8 attached hereto sets forth a true, correct and complete list of all inventories of finished goods and packaging materials and similar items of Seller and its subsidiaries other than BSA and BSG which relate to or are used or held for use solely in connection with the Business and all other inventory of the Business of BSA and BSG as of December 31, 2000 (the “Balance Sheet Date”), including raw materials, works in progress, goods supplied to BSA or BSG by suppliers, goods on consignment, office supplies, maintenance supplies, and all other goods customarily sold by BSA or BSG (whether located on any of its their respective premises, in transit to or from such premises, in other storage facilities, or otherwise), and Schedule 2.8 identifies whether such inventory is owned by Seller, Seller’s affiliates other than BSA and BSG, BSA or BSG (collectively, the “Inventory”). Schedule 2.8, as updated pursuant to Sections 8.5 and 1.3(c) hereof, shall set forth a true, correct and complete list, in accordance with GAAP, of the Inventory scheduled or of the Business as of the date of the Closing Balance Sheet (the “Interim Date”) and as of the Closing Date, respectively, including a description and valuation thereof. The Inventory listed on Schedule 2.8 comprises all of the most recent Collateral ReportInventory of the Business on the Balance Sheet Date and all of the Inventory reflected on the Current Balance Sheet, (aand the Inventory listed on Schedule 2.8 as updated pursuant to Sections 8.5 and 1.3(c) will comprise all of the Inventory of the Business as of the Interim Date and as of the Closing Date, respectively, and all of the Inventory reflected on the Closing Balance Sheet and on the Closing Date Balance Sheet. All of such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ was acquired and has been maintained in the ordinary course of businessthe Business; consists of a quality, quantity and Inventory in the form of raw materials; providedcondition usable, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 leasable or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ saleable in the ordinary course of businessthe Business in accordance with GAAP; is valued at the lower of cost or market, with allowances for excess and Inventory obsolete materials and materials below standard quality determined in accordance with GAAP and consistent with the form of raw materials; provided, that Current Balance Sheet and the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible BSA Accounts and merchantable title to such Inventory and such Inventory is not subject to any Lien material write-down or security interest write-off. None of Seller, BSA or document whatsoever except for the security interest granted BSG is under any obligation or has any liability with respect to the Administrative Agent hereunder for the benefit return of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) Inventory of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed Business in the most recent Collateral Report, such possession of wholesalers or retailers or any Inventory is Eligible Inventory of good and marketable condition, previously sold to other customers except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance a manner consistent with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderpast practice.

Inventory. (a) With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportBorrowing Base Certificate, (a) Exhibit A sets forth the information required thereby for all of such Grantor's Inventory (other than Inventory in transit) located at a location (i) owned by such Grantor and (ii) which is leased by such Grantor as lessee (x) where the aggregate value of the Inventory of such Grantor at such location is in excess of $5,000,000 and (y) where at least 80% of the Inventory of the Grantors at all leased real properties is located, as designated in Part B of Exhibit A and (b)(i) as of the Effective Date, Part C of Exhibit A sets forth the information required thereby for all of such Grantor's Inventory excluded from Eligible located at a location at which Inventory as disclosed is held in a public warehouse or is otherwise held by a bailee or on consignment where the aggregate value of the Inventory of such Grantor at such location is in excess of $1,000,000 and (ii) with respect to any of its Inventory scheduled or listed on the most recent Collateral ReportBorrowing Base Certificate delivered subsequent to the Effective Date, Part C of Exhibit A sets forth the information required thereby for all of such Grantor's Inventory located at contractors’ premises a location at which Inventory is held in a public warehouse or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that is otherwise held by a bailee or on consignment (x) where the aggregate amount value of all the Inventory of such Grantor at such location is in excess of $5,000,000 and (y) where at least 80% of the form of raw materials subject to this parenthetical does not exceed $10,000,000) is Inventory located at one of locations at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment. In addition (a) such Grantor’s locations set forth on Schedule 2 or Schedule 14 to Inventory specified therein as Eligible Inventory satisfies the Perfection Certificaterequirements applicable thereto, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (c) the completion of manufacture, sale or other disposition of such Inventory (other than Inventory of the type described in clause (n) of the definition of Eligible Inventory) by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

Inventory. Except as reserved against on or set forth in the Interim Financial Statements, or as set forth in the Disclosure Schedule or the SEC Reports, the materials, supplies and work-in-process included in the inventory of Sellers as set forth on the Interim Balance Sheet, and all inventory of the Seller arising since the date of the Interim Financial Statements, were acquired in the Ordinary Course of Business and are valued as set forth in the Disclosure Schedule or the Interim Financial Statements. (a) The Disclosure Schedule sets forth all real property that Sellers own (collectively, the "Owned Real Property"). With respect to any of its Inventory scheduled or listed on the most recent Collateral Reporteach such Owned Real Property, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory except as disclosed set forth in the most recent Collateral Report, Inventory located at contractors’ premises Disclosure Schedule or ▇▇▇▇▇ in the ordinary course of business, documents referenced therein: (i) the identified owner has good and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 marketable title to the Perfection Certificateparcel of Owned Real Property, (b) no Inventory (other than Inventory in transitfree and clear of any Encumbrances, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted Permitted Exceptions and liens or encumbrances of a definite or ascertainable amount which shall be removed at Closing; (ii) Sellers agree that at Closing Sellers will deliver to Buyer a recordable special warranty deed for each of the parcel of Owned Real Property, subject only to the Administrative Agent hereunder for Permitted Exceptions; (iii) there are no leases, subleases, licenses, concessions, or other agreements granting to any party or parties thereto the benefit right of use or occupancy of any portion of any Owned Real Property; and (iv) Except as set forth in Section 2.4, Seller hereby specifically disclaims any warranty, guaranty or representation, oral or written, past, present or future, of, as to, or concerning (1) the nature and condition of the Administrative Agent Owned Real Property, including, but not by way of limitation, the water, soil, geology, flora and Lender Partiesfauna, and Liens constituting a Permitted Encumbrance pursuant to clause (a)the suitability thereof, (b), (f), (h) or (i) and of the definition thereof Owned Real Property for any and all activities and uses which Buyer and its Affiliates may elect to conduct thereon, or any improvements which Buyer and its Affiliates may elect to construct thereon, income to be derived therefrom or expenses to be incurred with respect thereto, or any obligations or any other Permitted Encumbrance which does not have priority over matter or thing relating to or affecting the Lien in favor same; (2) the manner of construction and condition and state of repair or lack of repair of any improvements located thereon; (3) the nature and extent of any easement, right-of-way, lease, possession, lien, encumbrance, license, reservation, condition or otherwise; (4) the presence or absence of any environmentally threatened species or wetlands; (5) the presence or absence of any environmentally hazardous substance or material; and the compliance of the Administrative Agent Owned Real Property, with any laws, rules or ordinances, or regulations of any government or any body; (6) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and faulting; (7) whether or not and the Lender Parties, (d) except as specifically disclosed in extent to which the most recent Collateral Report, such Inventory Owned Real Property or any portion thereof is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.affected by any stream

Inventory. With respect to any All Inventory of the Company and its Inventory scheduled Subsidiaries has been acquired or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ manufactured in the ordinary course of business. All Inventory is owned by the Company or its Subsidiaries, as applicable, no Inventory is held on a consignment basis, and neither the Company nor any of its Subsidiaries has any liability relating to consigned Inventory in or other goods. All Inventory of the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) Company and its Subsidiaries is located at one of such Grantor’s the locations set forth in Schedule 3.12(b) of the Disclosure Schedules. All Inventory of the Company and its Subsidiaries was manufactured, in each case, in material compliance with applicable Law. Except as set forth in Schedule 3.22 of the Disclosure Schedules, during the twelve (12) month period ending on Schedule 2 the Closing Date, neither the Company nor any of its Subsidiaries has had, and during the twelve (12) month period commencing on the Closing Date, neither the Company nor any of its Subsidiaries expect to have, any Inventory returned by customers, transferred from a warehouse or Schedule 14 received on a purchase order that will be returned to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed vendor for credit with respect to which appropriate reserves were not or have not been provided in the most recent Collateral Report, Financial Statements. All Inventory located of the Company and its Subsidiaries is of a quality and quantity presently useable and salable at contractors’ premises or ▇▇▇▇▇ customary gross margins in the ordinary course of business, business (consistent with past practice) and the quantities of Inventory are not materially excessive in amount and are reasonable in all material respects in the form present circumstances of raw materials; providedthe business of the Company and its Subsidiaries, that taken as a whole. All Inventory of the aggregate amount of all Inventory Company and its Subsidiaries is merchantable and fit for the purpose for which it was procured or produced, except as reflected in the form Balance Sheet. In the case of raw materials subject to this parenthetical does not exceed $10,000,000) any Inventory that is nowobsolete, damaged, defective, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g)discontinued, (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause either (a), (b), (f), (h) or (i) the value of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced fully written down or (b) adequate reserves have been provided in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderInterim Financial Statements.

Inventory. With respect The Purchase Price shall be adjusted as follows: (i) at Closing, if the Pre-Closing Inventory Adjustment is (A) a positive number, the Purchase Price shall be increased by such amount or (B) a negative number, the Purchase Price shall be decreased by the absolute amount of such negative number. (ii) Within five (5) Business Days after the Closing, Purchasers shall physically audit the actual Inventory then located at the Facility. Purchasers shall notify Sellers at least three (3) Business Days prior to the Closing of their proposed schedule for conducting such audit and shall permit representatives of Sellers to be present at the Facility and observe such audit. Within five (5) Business Days following such audit, Purchasers shall deliver written notice to Seller GP specifying the total value of the Inventory located at the Facility (excluding the value of any Unusable or Undelivered Refurbished Parts located at the Facility) audited pursuant to such audit. The total value of its such Inventory scheduled will be calculated based upon the prices reflected on the September 30 Inventory Schedule, the On-Site Inventory List and the Off-Site Inventory List, as applicable, such prices to be adjusted to reflect any difference for any such items of Inventory as of the Closing in the remaining life cycles determined in accordance with GAAP utilizing General Electric’s latest issued version of GER3620 as of the Closing. The total value of such Inventory shall be reduced for any Inventory items (other than Combustion and Hot Gas Path Parts) that are determined through such audit in accordance with GAAP to be unusable (such adjusted value, the “Audited On-Site Inventory Value”). Such notice also shall identify any Unusable or Undelivered Refurbished Parts on the On-Site Inventory List. (iii) Purchasers shall physically audit each item of Inventory listed on the most recent Collateral ReportOff-Site Inventory List promptly following delivery of each such item to the Facility after Closing. Within five (5) Business Days after the date the last item set forth on the Off-Site Inventory List shall have been delivered to the Facility (or, if earlier, the forty-fifth (a45th) day after the Closing Date), Purchasers shall deliver written notice to Seller GP specifying the total value of the items on the Off-Site Inventory List delivered to the Facility after Closing (excluding the value of any Unusable or Undelivered Refurbished Parts). The total value of such Inventory will be calculated based upon the prices reflected on the September 30 Inventory Schedule and Schedule 6.19, as applicable, such prices to be adjusted to reflect any difference for any such items of Inventory as of the Closing in the remaining life cycles determined in accordance with GAAP utilizing General Electric’s latest issued version of GER3620 as of the Closing. The total value of such Inventory shall be reduced for any Inventory items (other than Combustion and Hot Gas Path Parts) that are determined through such audit in accordance with GAAP to be unusable (such adjusted value, the “Audited Off-Site Inventory in transitValue”). Such notice also shall identify any Unusable or Undelivered Refurbished Parts on the Off-Site Inventory List. Subject to Section 3.3(b)(iv), the written notice delivered by Purchasers to Seller GP pursuant to the second sentence of this Section 3.3(b)(iii) shall also specify an amount (whether positive or negative) equal to the sum of the Audited On-Site Inventory excluded from Eligible Value plus the Audited Off-Site Inventory as disclosed in Value (such sum, the most recent Collateral Report“Audited Closing Inventory Value”) minus the value of the Estimated Closing Inventory (such difference, the “Inventory located Value Differential”). (iv) If there are any Unusable or Undelivered Refurbished Parts at contractors’ premises or ▇▇▇▇▇ in the ordinary course time Purchasers deliver the notice under Section 3.3(b)(iii), then notwithstanding Section 3.3(b)(iii), the “Inventory Value Differential” will equal the Audited Closing Inventory Value minus the sum of business(A) the value of the Estimated Closing Inventory plus (B) the Replacement Cost Excess. For purposes of this Section 3.3(b)(iv), and Inventory in the form of raw materials; provided, that “Replacement Cost Excess” means an amount equal to (1) the aggregate amount of all Inventory the actual costs incurred by the Company (acting in good faith to minimize such costs) to purchase from General Electric or an Affiliate of General Electric, or from any other mutually agreeable vendor, a new and unused replacement for each Unusable or Undelivered Refurbished Part, such actual costs to be adjusted to reflect the form actual remaining life cycles of raw materials subject to this parenthetical does not exceed $10,000,000the part that is being replaced determined in accordance with GAAP utilizing General Electric’s latest issued version of GER3620 as of the Closing minus (2) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant values for each of the Unusable or Undelivered Parts reflected on the September 30 Inventory Schedule. Purchasers agree to cause the Company to make all purchases described in clause (a), (b), (f), (h) or (iA) of the definition thereof and any other Permitted Encumbrance which does not have priority over preceding sentence within one hundred twenty (120) days after the Lien in favor Closing Date. Within ten (10) Business Days following the completion of such purchases, Purchasers shall provide written notice to Sellers of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced Value Differential calculated in accordance with this Section 3.3(b)(iv). (v) If the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunder.Inventory Value Differential (on an absolute basis):

Inventory. At any time after the Effective Date, upon Merck’s request and subject to Vertex’s right to retain Licensed Compounds and Products in sufficient quantities for Vertex to Conduct the Existing Clinical Trials to the extent required hereunder, Vertex shall transfer the Materials set forth on Schedule 4.2.3 (the “Inventory”) to Merck in compliance with the following process: Within [***] from the date of receipt of Merck’s written request, for any Inventory not necessary to be retained by Vertex in order to Conduct the Existing Clinical Trials and that is identified as held by Vertex or any of its Affiliates on Schedule 4.2.3, Vertex will, at Merck’s expense, ship such Inventory to an address provided by Merck, delivered [***]; provided that if Merck does not notify Vertex of an address for such shipment within [***] from the Effective Date, Vertex may destroy such Inventory. Within [***] from the Effective Date, for any Inventory identified as held by a Third Party on Schedule 4.2.3, Merck will either (a) make arrangements with the Third Party storing such Inventory (the “Storage Facility”) to ship such Inventory to Merck or (b) enter into an agreement directly with the Storage Facility to continue storing such Inventory at Merck’s expense. Vertex will notify the Storage Facility of the transfer of such Inventory to Merck as needed to facilitate the shipment of such Inventory to Merck or the continued storage of such Inventory by the Storage Facility at Merck’s expense and will execute all transfer letters or other documentation necessary in connection therewith. Notwithstanding anything contained herein, if Merck does not notify Vertex of its election to either ship or continue storing such Inventory with the Storage Facility within [***] from the Effective Date pursuant to this Section 4.2.3, Vertex may destroy such Inventory. With respect to any Inventory stored by a Storage Facility in any country or jurisdiction outside of its Inventory scheduled or listed on the most recent Collateral ReportUnited States, (a) such Inventory (other than Inventory in transitMerck will be responsible for obtaining, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, completing and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 presenting to the Perfection Certificateapplicable government authority all export documentation, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, fees and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject licenses required to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) ship such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory. In case Inventory is not subject sufficient to any Lien complete the Existing Clinical Trials, or security interest or document whatsoever except to secure supply of Licensed Compounds during the hand-over period of Third Party vendor contracts as defined in Section 4.2.5, the TC shall agree on the strategy according to which Vertex shall use Commercially Reasonable Efforts to supply Licensed Compound in addition to Inventory for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed use in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced Existing Clinical Trials in accordance with the Federal Fair Labor Standards Act Clinical Trials Transfer Plan. The costs of 1938, as amended, and all rules, regulations and orders thereundersuch supply of Licensed Compound shall be reimbursed by Merck in accordance with Section 2.1.4.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 Exhibit A excluding retail store locations which have been established but for which Grantors are not required to the Perfection Certificatedeliver a supplement to such exhibit pursuant to Section 8.22 (as such Exhibit may be supplemented from time to time in accordance with Section 8.22), (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g4.1(f), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted Liens to the Administrative Agent hereunder for the benefit extent permitted under Section 6.02 of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender PartiesCredit Agreement, (d) except as specifically disclosed in the most recent Collateral ReportReport (specifically or by exclusion of any such Account or Credit Card Account from the Borrowing Base Certificate), such Inventory is Eligible Inventory or Eligible In-Transit Inventory of good and marketable conditionmerchantable quality, except for damaged or defective goods arising in the ordinary course of such Grantor’s businessfree from any defects, and (e) such Inventory is not subject to any licensing, patent, royalty, trademark, trade name or copyright agreements with any third parties which would require any consent of any third party upon sale or disposition of that Inventory or the payment of any monies to any third party upon such sale or other disposition, (f) to the extent applicable, such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (g) the completion of manufacture, sale or other disposition of such Inventory by the Administrative Agent following the occurrence and during the continuance of an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject (without regard to the right of the Administrative Agent to access any retail store location for such purposes).

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory At a reasonable time selected by Sellers, with reasonable notice to Buyer, on the day immediately preceding the Closing Date: (other than Inventory in transit, Inventory excluded from Eligible Inventory 1) Sellers shall conduct a physical inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 date with respect to the Perfection Certificate, propane owned by Sellers at the Terminals stored above-ground in conjunction with the Business (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g“Terminal Inventory”), which includes a number of gallons of propane owned by Sellers to be retained by Sellers, for which Sellers shall notify Buyer of such amount at least three days prior to Closing (c) the “Above-Ground Retained Inventory”); Buyer shall be permitted to have a representative present for such Grantor has goodinventory; if Buyer’s representative is present, indefeasible such representative and merchantable title to Sellers shall agree on such physical inventory, or, if Buyer’s representative is not present, Sellers’ physical inventory shall be deemed correct; such Terminal Inventory shall be deemed final among the parties and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted claim by Buyer with respect to the Administrative Agent hereunder for the benefit accuracy of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance volume of such Terminal Inventory pursuant to clause this Agreement; (a2) Sellers shall conduct an inventory of propane and all other products in Sellers’ custody at the Underground Storage Facilities based upon Sellers’ records (the “Underground Inventory”) categorized by location, product and owner, including (i) inventories owned by Sellers in conjunction with the Feedstock Operations and the Wholesale Operations (the “Underground Purchased Inventory”), (bii) propane owned by Sellers to be retained by Sellers (the “Underground Retained Inventory”), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (eiii) such Inventory has been produced the feedstock or product inventory owned by any third party at the Underground Storage Facilities (the “Underground Transferred Inventory”); (3) Sellers shall conduct an inventory of propane and all other products owned by Sellers in accordance conjunction with the Federal Fair Labor Standards Act Feedstock Operations or the Wholesale Operations in transit based upon Sellers’ shipping, inventory and rail records (the “Transit Inventory”); (4) Sellers shall conduct an inventory of 1938propane and all other products owned by Sellers in conjunction with the Feedstock Operations or the Wholesale Operations at third party storage locations based upon Sellers’ and each applicable third party’s inventory records, to the extent such third party delivered such records to Sellers (the “Third Party Location Inventory”); and (5) Sellers shall conduct an inventory of any feedstock or product inventory owned by any third party which is located at or within any of the Assets (the “Transferred Inventory”) other than the Underground Transferred Inventory. (b) At Closing, the Terminal Inventory, the Underground Inventory, the Transit Inventory and the Third Party Location Inventory shall be transferred to Buyer’s custody or ownership, as amendedapplicable, including (1) the Above-Ground Retained Inventory, (2) the Underground Retained Inventory that shall be subject to the underground storage contracts attached hereto as Exhibits A-▇, ▇-▇ and A-3 to be executed at Closing, and all rules, regulations and orders thereunder(3) the Transferred Inventory.

Inventory. (a) With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportBorrowing Base Certificate, (a) Exhibit A sets forth the information required thereby for all of such Grantor’s Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory ) located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, a location (i) owned by such Grantor and Inventory in the form of raw materials; provided, that (ii) which is leased by such Grantor as lessee (x) where the aggregate amount value of the Inventory of such Grantor at such location is in excess of $5,000,000 and (y) where at least 80% of the Inventory of the Grantors at all Inventory leased real properties is located, as designated in Part B of Exhibit A and (b)(i) as of the form Effective Date, Part C of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one Exhibit A sets forth the information required thereby for all of such Grantor’s locations set forth Inventory located at a location at which Inventory is held in a public warehouse or is otherwise held by a bailee or on Schedule 2 consignment where the aggregate value of the Inventory of such Grantor at such location is in excess of $1,000,000 and (ii) with respect to any of its Inventory scheduled or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in listed on the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted Borrowing Base Certificate delivered subsequent to the Administrative Agent hereunder Effective Date, Part C of Exhibit A sets forth the information required thereby for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course all of such Grantor’s business, Inventory located at a location at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment (x) where the aggregate value of the Inventory of such Grantor at such location is in excess of $5,000,000 and (ey) where at least 80% of the Inventory located at locations at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment. In addition (a) such Inventory specified therein as Eligible Inventory satisfies the requirements applicable thereto, (b) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderthereunder and (c) the completion of manufacture, sale or other disposition of such Inventory (other than Inventory of the type described in clause (n) of the definition of Eligible Inventory) by the Administrative Agent following an Event of Default shall not require the consent of any Person and shall not constitute a breach or default under any contract or agreement to which such Grantor is a party or to which such property is subject.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such All Inventory (other than Inventory in transitof the Business, Inventory excluded from Eligible Inventory as disclosed whether or not reflected in the most recent Collateral ReportBalance Sheet, Inventory located at contractors’ premises or ▇▇▇▇▇ consists of a quality and quantity usable and salable, and not excessive, in the ordinary course of businessbusiness consistent with past practice, except for obsolete, damaged, defective or slow-moving items that (i) have been written off or written down to fair market value, or (ii) for which adequate reserves have been established, or (iii) which are otherwise identified in the Closing Inventory Count, or (iv) if not otherwise identified in the Closing Inventory Count, would have constituted Valueless Inventory (as defined in Exhibit B) for purposes of calculating Closing Inventory. All such Inventory is owned by Seller free and clear of all Encumbrances, except as to be paid in full and released at Closing in accordance with Section 2.06. Without limiting the generality of the foregoing, none of the Inventory is held on a consignment basis. Without limiting anything in Section 3.23, all Valueless Inventory reflected in the finally determined calculation of Closing Inventory, and all Inventory which is not reflected in the form finally determined calculation of raw materials; providedClosing Inventory which would have constituted Valueless Inventory for purposes of calculating Closing Inventory, that are being sold, transferred, assigned and delivered by the aggregate amount applicable Seller to Buyer, and Buyer shall acquire, receive, assume and accept such Valueless Inventory from the applicable Seller, in their then “as-is, where is” condition, without any other representations or warranties from Sellers, express or implied, including any warranty of merchantability, habitability or fitness for a particular purpose. (b) Section 3.11(b)(i) of the Disclosure Schedules sets forth a true and correct listing of all Inventory of the Business as of the date of the balance sheet included in the form of raw materials subject to this parenthetical does not exceed $10,000,000) Interim Financial Statements, including specifying whether such inventory is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by R410a Refrigerant Gas. Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for the benefit of the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or (i3.11(b)(i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor Disclosure Schedules lists all locations where Inventory is stored as of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereunderClosing Date.

Inventory. (a) With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportBorrowing Base Certificate, (a) Exhibit A sets forth the information required thereby for all of such Grantor's Inventory (other than Inventory in transit) located at a location (i) owned by such Grantor and (ii) which is leased by such Grantor as lessee (x) where the aggregate value of the Inventory of such Grantor at such location is in excess of $5,000,000 and (y) where at least 80% of the Inventory of the Grantors at all leased real properties is located, as designated in Part B of Exhibit A and (b)(i) as of the Effective Date, Part C of Exhibit A sets forth the information required thereby for all of such Grantor's Inventory excluded from Eligible located at a location at which Inventory as disclosed is held in a public warehouse or is otherwise held by a bailee or on consignment where the aggregate value of the Inventory of such Grantor at such location is in excess of $1,000,000 and (ii) with respect to any of its Inventory scheduled or listed on the most recent Collateral ReportBorrowing Base Certificate delivered subsequent to the Effective Date, Part C of Exhibit A sets forth the information required thereby for all of such Grantor's Inventory located at contractors’ premises a location at which Inventory is held in a public warehouse or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that is otherwise held by a bailee or on consignment (x) where the aggregate amount value of all the Inventory of such Grantor at such location is in excess of $5,000,000 and (y) where at least 80% of the form of raw materials subject to this parenthetical does not exceed $10,000,000) is Inventory located at one locations at which Inventory is held in a public warehouse or is otherwise held by a bailee or on consignment. In addition, the completion of manufacture, sale or other disposition of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises which contains or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject bears Intellectual Property rights licensed to this parenthetical does not exceed $10,000,000a Grantor) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for following an Event of Default shall not require the benefit consent of the Administrative Agent any Person and Lender Parties, and Liens constituting shall not constitute a Permitted Encumbrance pursuant breach or default under any contract or agreement to clause (a), (b), (f), (h) which such Grantor is a party or (i) of the definition thereof and any other Permitted Encumbrance to which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory property is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundersubject.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral ReportInventory, (a) such Inventory (other than Inventory in transitthe Borrower, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or Fost▇▇ ▇▇▇▇▇ ▇▇▇ Fantasma will: (a) as soon as possible upon demand by the Agent from time to time, prepare and deliver to the Agent designations of Inventory specifying the Borrower's, Fost▇▇ ▇▇▇▇▇'▇ ▇▇ Fantasma's standard cost, which generally represents average cost, of Inventory, and such other matters and information relating to the Inventory as the Agent may reasonably request; (b) keep correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, consistent with past practices, the Borrower's, Fost▇▇ ▇▇▇▇▇'▇ ▇▇ Fantasma's cost therefor and the selling price thereof, all of which records shall be available to the officers, employees or agents of the Agent upon demand for inspection and copying thereof; (c) except for Inventory located with freight forwarders in the ordinary course of businessshipment, and not store any Inventory with a bailee, warehouseman or similar Person without the Agent's prior written consent, which consent may be conditioned on, among other things, delivery by the bailee, warehouseman or similar Person to the Agent of warehouse receipts, in form acceptable to the Agent, in the form name of raw materialsthe Agent evidencing the storage of Inventory and the interests of the Agent and the Lenders therein; providedand (d) permit the Agent and its agents or representatives to inspect and examine the Inventory and to check and test the same as to quality, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificatequantity, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, value and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall condition at any time or times hereafter be stored during the Borrower's, Fost▇▇ ▇▇▇▇▇'▇ ▇▇ Fantasma's usual business hours or at any other location reasonable times, provided that, absent an Event of Default, the Agent shall take reasonable steps not to interfere with the conduct of the Borrower's, Fost▇▇ ▇▇▇▇▇'▇ ▇▇ Fantasma's business except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for extent reasonably necessary to complete the benefit of the Administrative Agent and Lender PartiesAgent's activities. The Borrower, and Liens constituting a Permitted Encumbrance pursuant Fost▇▇ ▇▇▇▇▇ ▇▇▇ Fantasma shall be permitted to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such sell their Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced in accordance with business until the Federal Fair Labor Standards Act occurrence of 1938, as amended, and all rules, regulations and orders thereundera Default or an Event of Default.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) Each Grantor shall at all times maintain Inventory records consistent with past practices, keeping correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory and the cost therefor. (b) The Grantors shall conduct a physical count of the Inventory either through periodic cycle counts or wall to wall counts, so that all Inventory is subject to such Inventory counts at least once each year but at any time or times as the Administrative Agent may request after an Event of Default has occurred and is continuing, and promptly following such physical inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed whether through periodic cycle counts or wall to wall counts) shall supply the Administrative Agent with a report in the most recent Collateral Reportform and with such specificity as may be satisfactory to the Administrative Agent concerning such physical count. (c) The Grantors shall not remove any Inventory from the locations set forth or permitted herein, without the prior written consent of Agent, except for sales of Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, its business and except to move Inventory directly from one location set forth or permitted herein to another such location and except for Inventory shipped from the manufacturer thereof which is in transit to the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 permitted herein. (d) Upon the Administrative Agent’s request, the Grantors shall deliver or cause to be delivered to the Perfection Certificate, (b) no Inventory (other than Administrative Agent written appraisals as to the Inventory in transitform, Inventory excluded from Eligible Inventory as disclosed in scope and methodology reasonably acceptable to the most recent Collateral ReportAdministrative Agent and by an appraiser reasonably acceptable to the Administrative Agent, Inventory located at contractors’ premises or ▇▇▇▇▇ in addressed to the ordinary course of business, Administrative Agent and Inventory in Lenders and upon which the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject Administrative Agent and Lenders are expressly permitted to this parenthetical does not exceed $10,000,000rely: (i) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted to the Administrative Agent hereunder for may reasonably request at the benefit expense of the Administrative Agent and Lender PartiesLenders and (ii) at any time or times as the Administrative Agent may request at the expense of the Grantors at any time after an Event of Default exists or has occurred and is continuing; provided that the Grantors may satisfy the requirements set forth in this clause (d) by delivering to the Administrative Agent a copy of any appraisals delivered to, and Liens constituting a Permitted Encumbrance pursuant to clause in form and substance satisfactory to, the Revolving Loan Administrative Agent, so long as such appraisal (a), A) is dated as of recent date and (b), (f), (hB) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of expressly permits reliance by the Administrative Agent and the Lender PartiesLenders or is accompanied by a letter, (d) except as specifically disclosed in form and substance reasonably satisfactory to the most recent Collateral ReportAdministrative Agent and signed by the appraiser, such Inventory is Eligible Inventory of good permitting the Administrative Agent and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and Lenders to rely thereon. (e) such The Grantors shall produce, use, store and maintain the Inventory has been produced with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with applicable laws (including the requirements of the Federal Fair Labor Standards Act of 1938, as amended, amended and all rules, regulations and orders thereunderrelated thereto). (f) The Grantors shall not sell inventory to any customer on approval, or any other basis which entitles the customer to return or may obligate the Grantors to repurchase such Inventory; except for the right of return given to retail customers of the Grantors in the ordinary course of the business of the Grantors in accordance with the then current return policy of the Grantors. (g) The Grantors shall keep the Inventory in good and marketable condition (subject to normal reserves for damaged and defective Inventory).

Inventory. With respect Unless or until you notify us in writing that you have dispensed with one or any one or more of the following requirements, we shall: (i) not remove the Inventory from the Collateral Locations described in the Agreement; (ii) promptly, and in any event within five (5) days of the receipt thereof, deliver such certification schedules and information relating to any of its the Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory (other than Inventory in transit, Inventory excluded from and Eligible Inventory as disclosed in you may reasonably request; (iii) keep correct and accurate records itemizing and describing the most recent Collateral Reportkind, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course type, quality and quantity of businessInventory, our costs, therefore, selling price thereof, and the daily withdrawals therefrom and additions thereto, all of which records shall be available to you, your officers, employees and agents upon demand for inspection and copying; (iv) concurrently, with the delivery of any of the Inventory to a bailee, warehousemen or similar party deliver to you, in form acceptable to you, warehouse receipts in your name evidencing the form storage of raw materials; provided, that Inventory; (v) allow you to have the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, right upon demand and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible thereafter during our usual business hours to inspect and merchantable title to such examine Inventory and such Inventory is not subject to any Lien or security interest or document whatsoever except check and test the same as to quality, quantity, value and condition. We agree to reimburse you for the security interest granted to the Administrative Agent hereunder for the benefit your reasonable costs and expenses in doing so; (vi) conduct a physical count of the Administrative Agent Inventory at such intervals as you may request and Lender Parties, and Liens constituting promptly supply you with a Permitted Encumbrance pursuant to clause copy of such counts accompanied by a report of the value (a), (b), (f), (h) valued at the lower of cost or (imarket value) of the definition thereof and any Inventory; (vii) if sales of Inventory are made for cash, we shall immediately deliver to you the identical checks, cash or other Permitted Encumbrance forms of payment which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, we receive (d) except as specifically disclosed only in the most recent Collateral Report, such Inventory is Eligible Inventory event Lender elects to place Borrower on a dominion of good and marketable condition, except for damaged funds arrangement or defective goods arising in the ordinary course of such Grantor’s business, and on Default); (eviii) such Inventory has been produced in accordance with the Federal Fair Labor Standards Act of 1938, as amended, and all rules, regulations and orders thereundernot acquire consigned Inventory.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such Inventory Within six (other than Inventory 6) months following the Closing Date, Purchaser shall conduct, at Seller’s expense in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the an aggregate amount of all Inventory in the form of raw materials subject not to this parenthetical does not exceed $10,000,000) is located at one 20,000, a physical inventory of such Grantor’s locations set forth on Schedule 2 or Schedule 14 to the Perfection Certificate, (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of business, and Inventory in the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is now, or shall at any time or times hereafter be stored at any other location except as permitted by Section 4.1(g), (c) such Grantor has good, indefeasible and merchantable title to such Inventory and such Purchaser shall cause to be delivered to Seller a statement (“Post-Closing Inventory is not subject to any Lien or security interest or document whatsoever except for Statement”) setting forth the security interest granted to the Administrative Agent hereunder for the benefit value of the Administrative Agent and Lender PartiesInventory acquired by Purchaser at the Closing, and Liens constituting a Permitted Encumbrance pursuant with such value to clause (a), (b), (f), (h) or (i) of the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent and the Lender Parties, (d) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced be determined in accordance with the Federal Fair Labor Standards Act same accounting principles and methodologies as were utilized by Seller in the preparation of 1938the Closing Inventory Statement, as amendedand the amount by which, if any, the aggregate Inventory value reflected on the Closing Inventory Statement exceeds the value reflected on the Post-Closing Inventory Statement (any such excess amount, the “Inventory Deficiency Amount”); provided that in the event the Inventory Deficiency Amount calculated by Purchaser is less than or equal to [***] percent ([***]%) of the aggregate Inventory value reflected on the Closing Inventory Statement, the Inventory Deficiency Amount shall be deemed to be $0 and Seller shall have no further Liability to Purchaser with respect to such Inventory Deficiency Amount or under this Section 8.9. SD\906843.15 (b) After receipt of the Post-Closing Inventory Statement, if any, Seller shall have thirty (30) days to review the Post-Closing Inventory Statement. Purchaser shall give, or cause to be given, to Seller reasonable access during standard working hours to all documents, records and the relevant employees and consultants of Purchaser in order to allow Seller to confirm the accuracy of the Post-Closing Inventory Statement. Not later than thirty (30) days following the date of receipt of the Post-Closing Inventory Statement, Seller shall provide Purchaser with a notice (an “Inventory Dispute Notice”) listing those items, if any, to which Seller takes exception, which notice shall also (i) specifically identify, and provide a reasonably detailed explanation of the basis upon which Seller has delivered such list, including the applicable provisions of this Agreement on which the dispute set forth in such Inventory Dispute Notice is based, (ii) set forth the value of the Inventory that Seller has calculated, and (iii) specifically identify Seller’s proposed adjustment(s). Unless Seller delivers the Inventory Dispute Notice to Purchaser setting forth the specific items disputed by Seller on or prior to the thirtieth (30th) day following Seller’s receipt of the Post-Closing Inventory Statement, Seller shall be deemed to have accepted and agreed to the Post-Closing Inventory Statement and such statement (and the calculations contained therein) shall be final, binding and conclusive. If Seller provides Purchaser with an Inventory Dispute Notice within such thirty (30) day period, Purchaser and Seller shall, within fifteen (15) days following receipt of such Inventory Dispute Notice by Seller (the “Inventory Resolution Period”), use good faith efforts to resolve their differences with respect to the items specified in the Inventory Dispute Notice (the “Disputed Inventory Items”), and all rulesother undisputed items (and all calculations relating thereto) shall be final, regulations binding and orders thereunderconclusive. Any written resolution by Purchaser and Seller during the Inventory Resolution Period as to any Disputed Inventory Items shall be final, binding and conclusive. (c) If Seller and Purchaser do not resolve all Disputed Inventory Items by the end of the Inventory Resolution Period, then the Parties shall follow the resolution procedures set forth in Section 2.7(c) with respect to the Disputed Inventory Items. The final, binding and conclusive Post-Closing Inventory Statement based either upon agreement by Seller and Purchaser, the written determination delivered by the Neutral Arbitrator in accordance with Sections 2.7(c) and 8.9(c) or Seller’s failure to notify Purchaser, in accordance with this Section 8.9, of its objections to either the Post-Closing Inventory Statement or any calculations contained therein shall be the “Conclusive Post-Closing Inventory Statement.” If there is an Inventory Deficiency Amount reflected on the Conclusive Post-Closing Inventory Statement in an amount greater than [***] percent ([***]%) of the aggregate Inventory value reflected on the Closing Inventory Statement, then Purchaser shall be entitled to the Right of Setoff against Shares pursuant to Section 10.6(b) in an amount equal to the amount by which such Inventory Deficiency Amount exceeds [***] percent ([***]%) of the aggregate Inventory value reflected on the Closing Inventory Statement. The Right of Setoff shall be Purchaser’s sole and exclusive remedy against Seller for any Inventory Deficiency Amount.

Inventory. With respect to any of its Inventory scheduled or listed on the most recent Collateral Report, (a) such The Estimated Inventory Amount (other than Inventory in transit, Inventory excluded from Eligible as defined below) shall be determined on the basis of the quantities of Inventory as disclosed in of the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in close of business on the ordinary course of business, Business Day immediately prior to the Closing Date and Inventory in calculated using the form of raw materials; provided, that the aggregate amount of all Inventory in the form of raw materials subject to this parenthetical does not exceed $10,000,000) is located at one of such Grantor’s locations applicable valuation principles set forth on Schedule 2 or Schedule 14 2.6(a) to the Perfection CertificateSeller Disclosure Letter. Not earlier than five (5) Business Days prior to the Closing Date, Sellers shall estimate in good faith the quantities of Inventory and, on the basis of such estimate, prepare a statement setting forth the units comprising such estimated Inventory as of the date on which such estimate was made and, on the basis thereof, the value of such Inventory (the “Estimated Inventory Amount”). (b) no Inventory (other than Inventory in transit, Inventory excluded from Eligible Inventory As soon as disclosed in the most recent Collateral Report, Inventory located at contractors’ premises or ▇▇▇▇▇ in the ordinary course of businesspracticable after Closing, and Inventory in any event within twenty (20) Business Days after the form Closing Date, representatives of raw materials; provided, that the aggregate amount each Party shall jointly undertake an evaluation of all Inventory utilizing the procedures and principles set forth on Schedule 2.6(a) to the Seller Disclosure Letter (the “Inventory Count”) and, on the basis of such Inventory Count, prepare a mutually agreeable statement (a “Closing Inventory Statement”) setting forth, in reasonable detail, the form aggregate value of raw materials subject the Inventory as of the close of business on the Business Day immediately preceding the Closing Date. The aggregate value of the Inventory for purposes of the Closing Inventory Statement shall be determined in accordance with Section 2.6(a) based on the applicable valuation principles set forth on Schedule 2.6(a) to this parenthetical does not exceed $10,000,000) is nowthe Seller Disclosure Letter. In the event the Parties, or acting in good faith, are unable to agree upon the calculation of the value of the Inventory for purposes of the Closing Inventory Statement, such dispute shall at any time or times hereafter be stored at any other location except as permitted by resolved in accordance with Section 4.1(g2.6(c), . (c) such Grantor has goodIf the Parties are unable to agree upon the calculation of the value of the Inventory for purposes of the Closing Inventory Statement within ten (10) Business Days following the Inventory Count, indefeasible the Parties shall appoint by mutual agreement an impartial nationally recognized firm of independent certified public accountants (which firm shall not be the regular auditors of any Party or their respective Affiliates) (the “Independent Accountants”) to resolve the matters in dispute (in a manner consistent with this Section 2.6 and merchantable title to such Inventory with any matters not in dispute), and such Inventory is not subject to any Lien or security interest or document whatsoever except for the security interest granted determination of the Independent Accountants in respect of the correctness of each matter remaining in dispute shall be conclusive and binding on the Parties (absent manifest error). Each Party shall present its calculation of the value of the Inventory, and specify the items in dispute, to the Administrative Agent hereunder for Independent Accountants. For the benefit sake of clarity, the Administrative Agent and Lender Parties, and Liens constituting a Permitted Encumbrance pursuant to clause (a), (b), (f), (h) or Independent Accountants shall (i) of only address those matters that are in dispute by the definition thereof and any other Permitted Encumbrance which does not have priority over the Lien in favor of the Administrative Agent Parties and the Lender Partiesdecision for each disputed amount must be within the range of values assigned to each such item by Sellers and Buyer, respectively, (dii) except as specifically disclosed in the most recent Collateral Report, such Inventory is Eligible Inventory of good and marketable condition, except for damaged or defective goods arising in the ordinary course of such Grantor’s business, and (e) such Inventory has been produced make its determination in accordance with the Federal Fair Labor Standards Act requirements of 1938this Section 2.6 and (iii) be directed to render its reasoned written decision with respect to each disagreement asserted as promptly as practicable but in no event later than thirty (30) days after submission to it of all matters in dispute. Judgment may be entered upon the determination of the Independent Accountants in any court having jurisdiction over the party against which such determination is to be enforced. The Parties shall bear a portion of the fees and expenses of the Independent Accountants, calculated as amendedfollows: Sellers shall pay a portion of such fees and expenses equal to (A) the total of such fees and expenses multiplied by (B) a fraction, the numerator of which is the amount by which the aggregate value of the Inventory calculated by Sellers exceeds the aggregate value of the Inventory as determined by the Independent Accountants and the denominator of which is the difference between the aggregate value of the Inventory calculated by Buyer and the aggregate value of the Inventory calculated by Sellers; and Buyer shall pay the remaining portion (if any) of such fees and expenses. Any determinations by the Independent Accountants, and any work or analyses performed by the Independent Accountants in connection with its resolution of any dispute under this Section 2.6 shall not be admissible in evidence in any suit, action or other proceeding among the Parties, other than to the extent necessary to enforce payment obligations under Section 2.6(d). (d) The value of the Inventory determined in accordance with this Section 2.6, whether by agreement of the Parties or by the Independent Accountants, is referred to herein as the “Final Inventory Amount” and the date on which the Final Inventory Amount is determined is referred to herein as the “Final Inventory Determination Date”. The Estimated Inventory Amount shall be adjusted as follows: (i) if the Final Inventory Amount is greater than the Estimated Inventory Amount, Buyer shall, within five (5) Business Days after the Final Inventory Determination Date, pay Sellers an amount in cash equal to the Inventory True-Up Amount; (ii) if the Final Inventory Amount is less than the Estimated Inventory Amount, Sellers shall, within five (5) Business Days after the Final Inventory Determination Date, pay Buyer an aggregate amount in cash equal to the Inventory True-Up Amount; and (iii) if the Final Inventory Amount is equal to the Estimated Inventory Amount, no payment shall be required pursuant to this Section 2.6(d). Each such payment shall be made to Sellers or Buyer (as the case may be) in such respective amounts and in accordance with such wire instructions as Sellers or Buyer (as the case may be) shall specify in writing. The amount of any payments made pursuant to Section 2.6(d) shall be deemed an adjustment to the Purchase Price for all rules, regulations and orders thereunderpurposes hereunder.