THE THIRD AMENDMENT TO THE
INVENTORY AND WORKING CAPITAL AGREEMENT
[ * CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION ]
This third Amendment to the Inventory and Working Capital Financing Agreement
(this "Amendment") is made as of April 1, 1997 by and between InaCom Corp., a
Delaware corporation ("Customer") and IBM Credit Corporation, a Delaware
corporation ("IBM Credit").
RECITALS
A. Customer and IBM Credit have entered into that certain Inventory
and Working Capital Financing Agreement dated June 29, 1995, (as amended,
supplemented or otherwise modified from time to time, the "Agreement").
B. Customer has requested certain modifications to the Agreement.
C. IBM Credit agrees to make such modifications to the Agreement
subject to the terms and conditions as set forth herein.
NOW THEREFORE, in consideration of the premises set forth above and
the mutual agreements contained herein
and other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
AGREEMENT
Section 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement.
Section 2. Modifications to Agreement. The following modifications are
made to the Agreement, effective on the date first set forth above,
unless specified otherwise:
(A) Section 1.1 of the Agreement is hereby amended by deleting the
definitions of (i) FRO Advance and (ii) FRO Advance Term in their
entirety and substituting in their respective places, in lieu thereof,
the following:
"FRO Advance": an A/R Advance, with any one of four fixed rate
options ("FRO") and corresponding FRO Advance Terms, for which the
LIBOR portion of the rate of interest paid by Customer is fixed for
the duration of the FRO Advance Term.
"FRO Advance Term": for a certain FRO Advance, a thirty (30), sixty
(60), ninety (90), or one hundred eighty (180) day period, as the
case may be, depending on which LIBOR the Customer requested for
that certain FRO Advance. See Section 2.3 for further
clarification.
(B) The Agreement is amended by deleting the definitions of (i) A/R
Advance, (ii) A/R Advance Term and (iii) Collateral, Agency and
Intercreditor Agreement in their entirety and substituting in their
respective places, in lieu thereof, the following (such amended
definitions effective as of June 29, 1995):
"A/R Advance": any loan or advance of funds made by IBM Credit to
Customer pursuant to Section 2.3 of this Agreement, including, as
the context may require, a FRO Advance, an OVN Advance and a PAE
Advance.
"A/R Advance Term": shall be the collective or individual
reference, as the context may require, to a FRO Advance Term, an
OVN Advance Term and a PAE Advance Term.
"Collateral, Agency and Intercreditor Agreement": that certain
Collateral, Agency and Intercreditor Agreement dated June 28, 1995
by and among InaCom Corp, InaCom Business Centers, Inc., Inacomp
Financial Services, Inc., InaCom Communications, Inc., InaCom
Service, Inc., Boston Computer Exchange Corporation, Principal
Mutual Life Insurance Company, TMG Life Insurance Company (by The
Mutual Group, its agent), and IBM Credit (as a Lender and as
Collateral Agent), as amended and modified from time to time.
(C) The Agreement shall be amended by inserting the following Section 1.3
immediately following Section 1.2, such amendment
effective as of June 29, 1995:
"Section 1.3 Attachments. All attachments, exhibits, schedules and
other addenda hereto, including, but not limited to, Attachment A,
Attachment B and Exhibit A to Attachment A, are specifically
incorporated herein by reference and made a part of this
Agreement."
Section 3. Amendment to Attachment A. Customer hereby agrees that
Attachment A to the Agreement is hereby amended by deleting such
Attachment A in its entirety and substituting, in lieu thereof, the
Attachment A attached hereto (the "Revised Attachment A"). Such
Revised Attachment A contains, among other changes, (1) a permantent
increase to the Credit Line contained in Section I(A) to $395,000,000;
(2) a reformatted and revised definition of Borrowing Base contained in
Section I(B); (3) an increase in the Collateral Insurance Amount
contained in Section I(D) to $387,000,000; (4) a change to the Maximum
OVN Advance Total in Section I(K); (5) deletion of the Back-up Liquidity
Adjustment Fee in Section I(J)(iii); and (6) deletion of Section V.
Additional Conditions Precedent Pursuant to Seciton 4.1(M) of the
Agreement, since all the such conditions contained in Section V have
been met.
Section 4. Representations and Warranties. Customer makes to IBM Credit
the following representations and warranties all of which are material
and are made to induce IBM Credit to enter into this Amendment.
4.1 Accuracy and Completeness of Warranties and Representations. All
representations made by Customer in the Agreement were true, accurate and
complete in every respect as of the date made, and, as amended by this
Amendment, all representations made by Customer in the Agreement are true,
accurate and complete in every material respect as of the date hereof, and
do not fail to disclose any material fact necessary to make the representations
not misleading.
4.2 Violation of Other Agreements. The execution and delivery of
this Amendment does not violate or cause Customer not to be in
compliance with the terms of any agreement to which Customer is a party.
4.3 Litigation. Except as has been disclosed by Customer to IBM
Credit in writing, there is no litigation, proceeding, investigation or
labor dispute pending or threatened against Customer, which if adversely
determined, would materially adversely affect the ability of Customer
to perform its obligations under the Agreement, and the other documents,
instruments and agreements executed in connection therewith or pursuant
hereto.
4.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by Customer and is enforceable against
Customer in accordance with its terms.
Section 5. Ratification of Agreement. Except as specifically amended
hereby, all the provisions of the Agreement shall remain in full force
and effect. Customer hereby ratifies, confirms and agrees that the
Agreement, as amended hereby, represents a valid and enforceable
obligation of Customer, and is not subject to any claims, offsets or
defenses.
Section 6. Governing Law. This Amendment shall be governed by and
interpreted in accordance with the laws which govern the Agreement.
Section 7. Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be an original and all of which
shall constitute one agreement.
IN WITNESS WHEREOF, this Amendment has been executed by the duly
authorized officers of the undersigned as of the day and year first above
written.
INACOM CORP. IBM CREDIT CORPORATION
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇
----------------- ------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇
---------------- ------------------
Title: Asst. Treasurer Title: Remarketer Finance Center
----------------- ----------------------------------
Manager
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INVENTORY AND WORKING CAPITAL
FINANCING AGREEMENT
Dated June 29, 1995
ATTACHMENT A
Effective Date of Attachment A: April 1, 1997
Customer: InaCom Corp.
I. Fees, Rates and Repayment Terms:
(A) Credit Line: $395,000,000.
(B) Borrowing Base: The sum of the following:
(i) 80% of the amount of the Customer's Retained Eligible
Accounts as of the date of determination as reflected in the
Customer's most recent Collateral Management Report.
(ii) 80% of the amount of the Customer's Eligible Accounts
as of the date of determination that have been sold to IFC as
reflected in the Customer's most recent Collateral Management
Report.
(iii) 100% of the Customer's inventory in the Customer's
possession as of the date of determination as reflected in the
Customer's most recent Collateral Management Report constituting
Products (other than service parts) financed through a Product
Advance by IBM Credit. The value to be assigned to such inventory
shall be based upon the Authorized Supplier's invoice price to Customer
for Financed Products net of all applicable price reduction credits.
(iv) [*]
(v) [*]
Less, the sum of the following:
(a) the amount of Clipper Outstandings.
(b) the amount required to be set aside by IFC as the
"Servicer's Fee" and the "Administrator Fee", both as
defined in the Receivables Purchase Agreement.
(c) the amount of the Private Placement Debt.
(See Exhibit A to this Attachment A for example as to
how to calculate.)
(C) Base Rate: [*] during a Tier 1 Period, as
defined in Section IV of this Attachment A. During the
first consecutive Tier 2 Period, as defined in Section IV
of this Attachment A, the Base Rate will be increased to
[*]. During the second or greater than second
consecutive Tier 2 Period, the Base Rate will be increased to
[*]. The adjustments described in the previous
two sentences are defined as "Tier 2 Period Adjustments".
If any of the financial covenants specified in Section III of
this Attachment A are not met, or any other event of
default has occurred and is continuing, pricing and other
terms are subject to change at IBM Credit's reasonable
discretion including all remedies available to IBM
Credit under the Agreement.
(D) Collateral Insurance Amount: [*]
(F) A/R Finance Charge:
(i) PAE Financing Charge: Base Rate
(ii) OVN Advance Charge: Base Rate
(iii) FRO Advance Charge: [*] (plus any Tier 2 Period adjustments if
applicable) [*]
(G) Delinquency Fee Rate: (1) for the first 30 days immediately following
the payment date - [*] and (2) from the 31st day after the payment date
until the delinquent payment is made [*]
(H) Letter of Credit Fee Rate: [*]
(I) Letter of Credit Maximum: $6,000,000
(J) Other Charges:
(i) Monthly Service Fee: [*]
(ii) Unused line Fee: [*]
(K) Maximum OVN Advance Total: $60,000,000
(L) Maximum Guaranty Amount: $10,000,000
II. Bank Account
(A) Customer's Lockbox(es) and Special Account(s) will be
maintained at the following Bank(s):
Name:
Address:
Phone: Not applicable to this Agreement
as of the date of this Attachment A
Lockbox Account #:
Special Account #:
III. Financial Covenants:
Definitions: The following terms shall have the following
respective meanings in this Attachment A. All amounts shall
be determined in accordance with GAAP.
Current Assets shall mean, as of any date, all assets which,
in accordance with GAAP, should be classified as current
assets on a balance sheet.
Current Liabilities shall mean, as of any date, all
liabilities which, in accordance with GAAP, should be
classified as current liabilities on a balance sheet;
provided however, that all indebtedness to IBM Credit shall
be considered current liabilities.
Current Ratio shall mean Current Assets divided by Current
Liabilities.
Net Profit After Tax shall mean Revenue plus all other
income, minus all costs, including applicable taxes.
Non-Competes shall mean the amount Customer has to pay
another Person for that Person's agreement to not compete
with Customer.
Revenue shall mean the monetary expression of the aggregate
of products or services transferred by an enterprise to its
customers for which said customers have paid or are obligated
to pay, plus other income as allowed.
Subordinated Debt shall mean the Customer's indebtedness to
officers or owners as evidenced by an executed notes payable
subordination agreement in favor of IBM Credit.
Tangible Net Worth ("TNW") shall mean stockholders equity
minus goodwill and Non-Competes.
Total Assets shall mean, as of any date, all assets which,
in accordance with GAAP, should be classified as assets on a
balance sheet.
Total Liabilities shall mean, as of any date, all obligations
which, in accordance with GAAP, should be classified as
liabilities on a balance sheet less Subordinated Debt resulting
from past or current transactions that require settlement in
the future.
Total Net Worth (the amount of owner's or stockholder's
ownership in an enterprise) is equal to Total Assets minus
Total Liabilities.
Working Capital shall mean Current Assets minus Current
Liabilities.
The Customer will be required to maintain the following financial
covenants:
(a) Total Liabilities to TNW ratio of less than 6.50:1.0 at
all times;
(b) Current Ratio of greater than 1.00:1.0 at all times;
(c) TNW of greater than $90,000,000 at all times;
(d) Net Profit after Tax of (1) no loss greater than 10% of
TNW in any fiscal quarter and (2) no losses for three
consecutive fiscal quarters.
IV. Tier Periods
As used in the definitions of "Tier 1 Period" and "Tier 2 Period"
below, a "period" shall mean an interval of time commencing from
the first day of the calendar month following the date Customer
delivers to IBM Credit or the date when due, whichever is
earliest, the balance sheet and income statement for the fiscal
year or fiscal quarter, as applicable, with respect to a fiscal
period and ending on the last day of the calendar month which
contains the date Customer delivers to IBM Credit or the date
when due, whichever is earliest, the balance sheet and income
statement for the next succeeding fiscal period.
"Tier 1 Period" means each period with respect to which (i) the
ratio of Customer's Total Liabilities to TNW (the "Leverage
Ratio") during the immediately preceding fiscal period is less
than 4.75 to 1, (ii) the Customer's Current Ratio during such
fiscal period is greater than 1.05 to 1, (iii) Customer's TNW
during such fiscal period is greater than $105,000,000 and (iv)
the Customer's Net Profit after Tax ("Profitability") during such
fiscal period is such that (a) there is no loss greater than 5%,
(b) if there is a loss in that fiscal period, it is not the
second or more consecutive fiscal quarter with a loss and (c) on
an on-going basis beginning with October 1, 1995, there is no
cumulative loss for four consecutive fiscal quarters.
"Tier 2 Period" means each period (x) with respect to which (i)
the Customer's Leverage Ratio during the immediately preceding
fiscal period is less than 6.5 to 1, (ii) the Customer's Current
Ratio during such fiscal period is greater than 1.00 to 1,
(iii) Customer's TNW during such fiscal period is greater than
$90,000,000 and (iv) the Customer's Profitability is such that
(a) there is no loss greater than 10% and (b) if there is a loss
in that fiscal period, it is not the third or more consecutive
fiscal quarter with a loss and (y) which is not a Tier 1 Period.
[ * CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION ]
THE FOURTH AMENDMENT TO THE
INVENTORY AND WORKING CAPITAL FINANCING AGREEMENT
This Fourth Amendment to the Inventory and Working Capital Agreement
(this "Amendment") is made as of June 27, 1997 by and between InaCom
Corp., a Delaware corporation ("Customer") and IBM Credit Corporation, a
Delaware corporation ("IBM Credit").
RECITALS:
A. Customer and IBM Credit have entered into that certain Inventory
And Working Capital Financing Agreement dated as of June 29, 1995
(as amended, supplemented or otherwise modified from time to time, the
"Agreement").
B. The parties have agreed to modify the Agreement as more
specifically set forth below, upon and subject to the terms and
conditions set forth herein.
C. IBM Credit is willing to accommodate Customer's request
subject to the conditions set forth below.
AGREEMENT
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Customer and IBM Credit hereby agree as follows:
Section 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Agreement.
Section 2. Amendment. The Agreement is hereby amended as follows:
(A) Attachment A to the Inventory and Working Capital Agreement
is hereby amended by deleting such Attachment A in its entirety and
substituting, in lieu thereof, the Attachment A attached hereto. Such
new Attachment A shall be effective as of the date specified in the new
Attachment A. The changes contained in the new Attachment A
include, without limitation, that the Credit Line is increased from Three
Hundred Ninety-Five Million Dollars ($395,000,000) to Five Hundred Fifty
Million Dollars ($550,000,000).
(B) Section 1.1 of the Agreement is hereby amended by replacing the
definition of "Seasonal Credit Line Uplift" with the following:
""Seasonal Credit Line Uplift": a temporary increease in the Credit
Line sometime during the second half of a calendar year which may be
granted by IBM Credit at its sole discretion and by written
notification by IBM Credit to Customer. Such notification will
include the amount of the increase and the schedule for the return
to the Credit Line that existed prior to such temporary increase."
Section 3. Representations and Warranties. Customer makes to IBM
Credit the following representations and warranties all of which are
material and are made to induce IBM Credit to enter into this Amendment.
Section 3.1 Accuracy and Completeness of Warranties and Representations.
All representations made by Customer in the Agreement were true and
accurate and complete in every respect as of the date made, and, as
amended by this Amendment, all representations made by Customer in the
Agreement are true, accurate and complete in every material respect as
of the date hereof, and do not fail to disclose any material fact
necessary to make representations not misleading.
Section 3.2 Violation of Other Agreements. The execution and delivery
of this Amendment and the performance and observance of the covenants
to be performed and observed hereunder do not violate or cause Customer
not to be in compliance with the terms of any agreement to which
Customer is a party.
Section 3.3 Litigation. Except as has been disclosed by Customer to IBM
Credit in writing, there is no litigation, proceeding, investigation or
labor dispute pending or threatened against Customer, which if adversely
determined, would materially adversely affect Customer's ability to
perform Customer's obligations under the Agreement and the other
documents, instruments and agreements executed in connection therewith
or pursuant hereto.
Section 3.4 Enforceability of Amendment. This Amendment has been duly
authorized, executed and delivered by Customer and is enforceable
against Customer in accordance with its terms.
Section 4. Ratification of Agreement. Except as specifically amended
hereby, all of the provisions of the Agreement shall remain unamended
and in full force and effect. Customer hereby, ratifies, confirms and
agrees that the Agreement, as amended hereby, represents a valid and
enforceable obligation of Customer, and is not subject to any claims,
offsets or defenses.
Section 5. Governing Law. This Amendment shall be governed by and
interpreted in accordance with the laws which govern the Agreement.
Section 6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement.
IN WITNESS WHEREOF, this Amendment has been executed by duly
authorized officers of the undersigned as of the day and year first
above written.
..fo off
INACOM CORP. IBM CREDIT CORPORATION
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
Title: Chief Financial Officer Title: Director of Global Credit,
----------------------------- Remarketer Financing
ATTEST: ATTEST:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------- -------------------
Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Print Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
INVENTORY AND WORKING CAPITAL
FINANCING AGREEMENT
Dated June 29, 1995
ATTACHMENT A
Effective Date of Attachment A: June 27, 1997
Customer: InaCom Corp.
I. Fees, Rates and Repayment Terms:
(A) Credit Line: $550,000,000.
(B) Borrowing Base: The sum of the following:
(i) 80% of the amount of the Customer's Retained Eligible
Accounts as of the date of determination as reflected in the
Customer's most recent Collateral Management Report.
(ii) 80% of the amount of the Customer's Eligible Accounts
as of the date of determination that have been sold to IFC as
reflected in the Customer's most recent Collateral Management
Report.
(iii) 100% of the Customer's inventory in the Customer's
possession as of the date of determination as reflected in the
Customer's most recent Collateral Management Report constituting
Products (other than service parts) financed through a Product
Advance by IBM Credit. The value to be assigned to such inventory
shall be based upon the Authorized Supplier's invoice price to Customer
for Financed Products net of all applicable price reduction credits.
(iv) [*]
(v) [*]
Less, the sum of the following:
(a) the amount of Clipper Outstandings.
(b) the amount required to be set aside by IFC as the
"Servicer's Fee" and the "Administrator Fee", both as
defined in the Receivables Purchase Agreement.
(c) the amount of the Private Placement Debt.
(See Exhibit A to this Attachment A for example as to
how to calculate.)
(C) Base Rate: [*] during a Tier 1 Period, as
defined in Section IV of this Attachment A. During the
first consecutive Tier 2 Period, as defined in Section IV
of this Attachment A, the Base Rate will be increased to
[*]. During the second or greater than second
consecutive Tier 2 Period, the Base Rate will be increased to
[*]. The adjustments described in the previous
two sentences are defined as "Tier 2 Period Adjustments".
If any of the financial covenants specified in Section III of
this Attachment A are not met, or any other event of
default has occurred and is continuing, pricing and other
terms are subject to change at IBM Credit's reasonable
discretion including all remedies available to IBM
Credit under the Agreement.
(D) Collateral Insurance Amount: [*]
(F) A/R Finance Charge:
(i) PAE Financing Charge: Base Rate
(ii) OVN Advance Charge: Base Rate
(iii) FRO Advance Charge: [*] (plus any Tier 2 Period adjustments if
applicable) [*]
(G) Delinquency Fee Rate: (1) for the first 30 days immediately following
the payment date [*] (2) from the 31st day after the payment date until
the delinquent payment is made [*]
(H) Letter of Credit Fee Rate: [*]
(I) Letter of Credit Maximum: $6,000,000
(J) Other Charges:
(i) Monthly Service Fee: [*]
(ii) Unused line Fee: [*]
(K) Maximum OVN Advance Total: $60,000,000
(L) Maximum Guaranty Amount: $10,000,000
II. Bank Account
(A) Customer's Lockbox(es) and Special Account(s) will be
maintained at the following Bank(s):
Name:
Address:
Phone: Not applicable to this Agreement
as of the date of this Attachment A
Lockbox Account #:
Special Account #:
III. Financial Covenants:
Definitions: The following terms shall have the following
respective meanings in this Attachment A. All amounts shall
be determined in accordance with GAAP.
Current Assets shall mean, as of any date, all assets which,
in accordance with GAAP, should be classified as current
assets on a balance sheet.
Current Liabilities shall mean, as of any date, all
liabilities which, in accordance with GAAP, should be
classified as current liabilities on a balance sheet;
provided however, that all indebtedness to IBM Credit shall
be considered current liabilities.
Current Ratio shall mean Current Assets divided by Current
Liabilities.
Net Profit After Tax shall mean Revenue plus all other
income, minus all costs, including applicable taxes.
Non-Competes shall mean the amount Customer has to pay
another Person for that Person's agreement to not compete
with Customer.
Revenue shall mean the monetary expression of the aggregate
of products or services transferred by an enterprise to its
customers for which said customers have paid or are obligated
to pay, plus other income as allowed.
Subordinated Debt shall mean the Customer's indebtedness to
officers or owners as evidenced by an executed notes payable
subordination agreement in favor of IBM Credit.
Tangible Net Worth ("TNW") shall mean stockholders equity
minus goodwill and Non-Competes.
Total Assets shall mean, as of any date, all assets which,
in accordance with GAAP, should be classified as assets on a
balance sheet.
Total Liabilities shall mean, as of any date, all obligations
which, in accordance with GAAP, should be classified as
liabilities on a balance sheet less Subordinated Debt resulting
from past or current transactions that require settlement in
the future.
Total Net Worth (the amount of owner's or stockholder's
ownership in an enterprise) is equal to Total Assets minus
Total Liabilities.
Working Capital shall mean Current Assets minus Current
Liabilities.
The Customer will be required to maintain the following financial
covenants:
(a) Total Liabilities to TNW ratio of less than 6.50:1.0 at
all times;
(b) Current Ratio of greater than 1.00:1.0 at all times;
(c) TNW of greater than $90,000,000 at all times;
(d) Net Profit after Tax of (1) no loss greater than 10% of
TNW in any fiscal quarter and (2) no losses for three
consecutive fiscal quarters.
IV. Tier Periods
As used in the definitions of "Tier 1 Period" and "Tier 2 Period"
below, a "period" shall mean an interval of time commencing from
the first day of the calendar month following the date Customer
delivers to IBM Credit or the date when due, whichever is
earliest, the balance sheet and income statement for the fiscal
year or fiscal quarter, as applicable, with respect to a fiscal
period and ending on the last day of the calendar month which
contains the date Customer delivers to IBM Credit or the date
when due, whichever is earliest, the balance sheet and income
statement for the next succeeding fiscal period.
"Tier 1 Period" means each period with respect to which (i) the
ratio of Customer's Total Liabilities to TNW (the "Leverage
Ratio") during the immediately preceding fiscal period is less
than 4.75 to 1, (ii) the Customer's Current Ratio during such
fiscal period is greater than 1.05 to 1, (iii) Customer's TNW
during such fiscal period is greater than $105,000,000 and (iv)
the Customer's Net Profit after Tax ("Profitability") during such
fiscal period is such that (a) there is no loss greater than 5%,
(b) if there is a loss in that fiscal period, it is not the
second or more consecutive fiscal quarter with a loss and (c) on
an on-going basis beginning with October 1, 1995, there is no
cumulative loss for four consecutive fiscal quarters.
"Tier 2 Period" means each period (x) with respect to which (i)
the Customer's Leverage Ratio during the immediately preceding
fiscal period is less than 6.5 to 1, (ii) the Customer's Current
Ratio during such fiscal period is greater than 1.00 to 1,
(iii) Customer's TNW during such fiscal period is greater than
$90,000,000 and (iv) the Customer's Profitability is such that
(a) there is no loss greater than 10% and (b) if there is a loss
in that fiscal period, it is not the third or more consecutive
fiscal quarter with a loss and (y) which is not a Tier 1 Period.
