Dilution

Dilution. Means, as of any date of determination, a percentage, based upon the experience of the trailing six (6) month period ending on the date of determination, which is the result of dividing (a) actual bad debt write-downs, discounts, advertising allowances, credits, or other dilutive items with respect to the Accounts as determined by Lender in its sole discretion during such period, by (b) Borrower's net sales during such period (excluding extraordinary items) plus the amount of clause (a).

Dilution. Will be determined at the end of each month by CNB for the preceding twelve-month period by dividing total reductions, excluding cash collections of Accounts, by gross sales which gave rise to the Accounts for such twelve-month period.