EXHIBIT 10.26
LOAN AGREEMENT
DATED AS OF FEBRUARY 12, 2003
AMONG
INTERFACE SECURITIZATION CORPORATION, AS BORROWER,
INTERFACE, INC., AS INITIAL SERVICER,
THREE PILLARS FUNDING CORPORATION, AS LENDER,
AND
SUNTRUST CAPITAL MARKETS, INC., AS ADMINISTRATOR
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS............................................................................................1
Section 1.1 Defined Terms....................................................................................1
Section 1.2 Other Definitional Provisions...................................................................21
Section 1.3 Other Terms.....................................................................................22
Section 1.4 Computation of Time Periods.....................................................................22
Section 1.5 Limitation on Recourse..........................................................................22
ARTICLE II. THE LENDER'S COMMITMENT, BORROWING PROCEDURES AND LENDER NOTE........................................23
Section 2.1 Lender's Commitment.............................................................................23
Section 2.2 Borrowing Procedures............................................................................23
Section 2.3 Funding.........................................................................................23
Section 2.4 Representation and Warranty.....................................................................23
Section 2.5 Extension of Lender's Commitment................................................................24
Section 2.6 Voluntary Termination of Lender's Commitment; Reduction of Facility Limit.......................24
Section 2.7 Note............................................................................................24
ARTICLE III. INTEREST, FEES, ETC.................................................................................25
Section 3.1 Interest Rates..................................................................................25
Section 3.2 Interest Payment Dates..........................................................................25
Section 3.3 Interest Allocations............................................................................26
Section 3.4 Fees............................................................................................26
Section 3.5 Computation of Interest and Fees................................................................26
ARTICLE IV. REPAYMENTS AND PREPAYMENTS; DISTRIBUTION OF COLLECTIONS..............................................26
Section 4.1 Repayments and Prepayments......................................................................26
Section 4.2 Application of Collections......................................................................27
Section 4.3 Application of Certain Payments.................................................................28
Section 4.4 Due Date Extension..............................................................................28
Section 4.5 Making of Payments..............................................................................28
ARTICLE V. SECURITY INTEREST.....................................................................................29
Section 5.1 Grant of Security...............................................................................29
Section 5.2 Administrator Appointed Attorney-in-Fact........................................................29
Section 5.3 Administrator May Perform.......................................................................30
Section 5.4 Release of Collateral...........................................................................30
ii
ARTICLE VI. INCREASED COSTS, ETC.................................................................................30
Section 6.1 Increased Costs.................................................................................30
Section 6.2 Funding Losses..................................................................................32
Section 6.3 Withholding Taxes...............................................................................32
ARTICLE VII. CONDITIONS TO BORROWING.............................................................................33
Section 7.1 Initial Loan....................................................................................33
7.1.1 Resolutions...........................................................................33
7.1.2 Consents, etc.........................................................................34
7.1.3 Incumbency and Signatures.............................................................34
7.1.4 Good Standing Certificates............................................................34
7.1.5 Financing Statements..................................................................34
7.1.6 Search Reports........................................................................34
7.1.7 Fee Letter; Payment of Fees...........................................................34
7.1.8 Receivables Sale Agreement and Receivables Transfer Agreement.........................34
7.1.9 Opinions of Counsel...................................................................35
7.1.10 Lender Note...........................................................................35
7.1.11 Borrowing Base Certificate............................................................35
7.1.12 Lock Box Account Agreements...........................................................35
7.1.13 Releases; Payoff Letter...............................................................35
7.1.14 Intercreditor Agreement...............................................................35
7.1.15 Other .............................................................................36
Section 7.2 All Loans.......................................................................................36
7.2.1 No Default, etc.......................................................................36
7.2.2 Borrowing Request, etc................................................................36
7.2.3 Commitment Termination Date...........................................................36
7.2.4 Collateral Review.....................................................................36
7.2.5 Accounts 36
ARTICLE VIII. REPRESENTATIONS AND WARRANTIES.....................................................................36
Section 8.1 Existence and Power.............................................................................36
Section 8.2 Power and Authority; Due Authorization, Execution and Delivery..................................37
Section 8.3 No Conflict.....................................................................................37
Section 8.4 Governmental Authorization......................................................................37
Section 8.5 Actions, Suits..................................................................................37
Section 8.6 Binding Effect..................................................................................37
Section 8.7 Accuracy of Information.........................................................................37
Section 8.8 Margin Regulations; Use of Proceeds.............................................................38
Section 8.9 Good Title......................................................................................38
Section 8.10 Perfection.....................................................................................38
Section 8.11 Places of Business and Locations of Records....................................................38
Section 8.12 Accounts 38
Section 8.13 No Material Adverse Effect.....................................................................39
Section 8.14 Names ......................................................................................39
iii
Section 8.15 Ownership of Borrower; No Subsidiaries.........................................................39
Section 8.16 Not a Holding Company or an Investment Company.................................................39
Section 8.17 Compliance with Credit and Collection Policy...................................................39
Section 8.18 Solvency 39
Section 8.19 Eligible Receivables...........................................................................39
Section 8.20 Sales by Originators...........................................................................39
ARTICLE IX. COVENANTS OF BORROWER AND SERVICER...................................................................40
Section 9.1 Affirmative Covenants...........................................................................40
9.1.1 Compliance with Laws, Etc.............................................................40
9.1.2 Preservation of Legal Existence.......................................................40
9.1.3 Performance and Compliance with Receivables...........................................40
9.1.4 Credit and Collection Policy..........................................................40
9.1.5 Reporting Requirements................................................................40
(a) Financial Statements.........................................................41
(b) Borrowing Base Certificates and Monthly Reports..............................42
(c) Significant Events...........................................................42
(d) Servicing Certificate........................................................42
(e) Collateral Review............................................................43
(f) Other........................................................................43
9.1.6 Use of Proceeds.......................................................................43
9.1.7 Separate Legal Entity.................................................................43
9.1.8 Adverse Claims on Receivables.........................................................45
9.1.9 Further Assurances....................................................................45
9.1.10 Servicing.............................................................................45
9.1.11 Inspection............................................................................46
9.1.12 Cooperation...........................................................................46
9.1.13 Facility 46
9.1.14 Accounts 47
Section 9.2 Negative Covenants..............................................................................47
9.2.1 Sales, Liens, Etc.....................................................................47
9.2.2 Mergers, Acquisitions, Sales, Subsidiaries, etc.......................................47
9.2.3 Change in Business; Change in Credit and Collection Policy............................48
9.2.4 Other Debt............................................................................48
9.2.5 Organizational Documents..............................................................48
9.2.6 Jurisdiction of Organization; Location of Records.....................................48
9.2.7 Financing Statements..................................................................49
9.2.8 Business Restrictions.................................................................49
9.2.9 Other Agreements......................................................................49
ARTICLE X. SIGNIFICANT EVENTS AND THEIR EFFECT...................................................................49
Section 10.1 Events of Default..............................................................................49
10.1.1 Non-Payment of Loans, Etc.............................................................49
10.1.2 Collateral Reporting..................................................................49
10.1.3 Non-Compliance with Other Provisions..................................................49
iv
10.1.4 Breach of Representations and Warranties..............................................50
10.1.5 Bankruptcy............................................................................50
10.1.6 Tax and ERISA Liens...................................................................50
Section 10.2 Amortization Events............................................................................50
10.2.1 Servicer Event of Default.............................................................50
10.2.2 Borrowing Base Deficit................................................................50
10.2.3 Default Ratio.........................................................................50
10.2.4 Dilution Ratio........................................................................50
10.2.5 Delinquency Ratio.....................................................................50
10.2.6 Accounts Receivable Turnover Ratio....................................................50
10.2.7 Event of Default......................................................................50
10.2.8 Validity of Transaction Documents.....................................................51
10.2.9 Termination Date......................................................................51
10.2.10 Change of Control.....................................................................51
Section 10.3 Effect of Significant Event....................................................................51
ARTICLE XI. THE SERVICER.........................................................................................51
Section 11.1 Interface as Initial Servicer..................................................................51
Section 11.2 Certain Duties of the Servicer.................................................................52
11.2.1 Authorization to Act as Borrower's Agent..............................................52
11.2.2 Servicer to Act as Servicer...........................................................52
11.2.3 Collections...........................................................................53
Section 11.3 Servicing Compensation.........................................................................55
Section 11.4 Agreement Not to Resign........................................................................55
Section 11.5 Designation of Servicer........................................................................55
Section 11.6 Termination....................................................................................55
Section 11.7 Servicer Events of Default.....................................................................55
11.7.1 Failure to Make Payments and Deposits.................................................55
11.7.2 Non-Compliance with Other Provisions..................................................55
11.7.3 Delegation............................................................................55
11.7.4 Breach of Representations and Warranties..............................................56
11.7.5 Bankruptcy............................................................................56
11.7.6 Judgments.............................................................................56
11.7.7 Cross-Default to Material Debt........................................................56
11.7.8 Collateral Reporting..................................................................56
ARTICLE XII. ADMINISTRATOR.......................................................................................57
Section 12.1 Authorization and Action.......................................................................57
Section 12.2 Administrator and Affiliates...................................................................57
ARTICLE XIII. ASSIGNMENTS........................................................................................57
Section 13.1 Restrictions on Assignments....................................................................57
Section 13.2 Documentation..................................................................................57
Section 13.3 Rights of Assignee.............................................................................58
v
Section 13.4 Notice of Assignment...........................................................................58
ARTICLE XIV. INDEMNIFICATION.....................................................................................58
Section 14.1 General Indemnity of Borrower..................................................................58
Section 14.2 Indemnity of Servicer..........................................................................58
ARTICLE XV. MISCELLANEOUS........................................................................................59
Section 15.1 No Waiver; Remedies............................................................................59
Section 15.2 Amendments, Etc................................................................................59
Section 15.3 Notices, Etc...................................................................................60
Section 15.4 Costs, Expenses and Taxes......................................................................60
Section 15.5 Binding Effect; Survival.......................................................................60
Section 15.6 Captions and Cross References..................................................................61
Section 15.7 Severability...................................................................................61
Section 15.8 Governing Law..................................................................................61
Section 15.9 Counterparts...................................................................................61
Section 15.10 Submission to Jurisdiction; Waiver of Trial by Jury............................................62
Section 15.11 No Recourse Against Lender.....................................................................62
Section 15.12 No Proceedings.................................................................................62
Section 15.13 Confidentiality................................................................................63
Section 15.14 Entire Agreement...............................................................................63
EXHIBITS AND SCHEDULES
EXHIBIT A Form of Borrowing Request
EXHIBIT B Form of Lender Note
EXHIBIT C Form of Monthly Report
EXHIBIT D Form of Borrowing Base Certificate
EXHIBIT E Form of LockBox Account Agreement
SCHEDULE 8.5 Litigation
SCHEDULE 8.12 LockBoxes and LockBox Accounts
SCHEDULE 9.1.5 Collateral Review Requirements
SCHEDULE 15.3 Notice Addresses
vi
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of February
12, 2003, among INTERFACE SECURITIZATION CORPORATION, a Delaware corporation
(together with its successors and permitted assigns, "BORROWER"), INTERFACE,
INC., a Georgia corporation, in its capacity as the initial servicer (in such
capacity, together with its successors and permitted assigns in such capacity,
the "SERVICER"), THREE PILLARS FUNDING CORPORATION, a Delaware corporation
(together with its successors and permitted assigns, "LENDER"), and SUNTRUST
CAPITAL MARKETS, INC., a Tennessee corporation, as agent and administrator for
Lender (in such capacity, together with its successor and assigns in such
capacity, the "ADMINISTRATOR").
BACKGROUND
1. Borrower desires that Lender extend financing to
Borrower on the terms and subject to the conditions set forth herein.
2. Lender is willing to provide such financing on the
terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement,
(a) capitalized terms used and not otherwise defined herein are used with the
meanings attributed thereto in the Receivables Transfer Agreement or
Receivables Sale Agreement (each, as hereinafter defined) regardless of whether
those capitalized terms are listed below, and (b) the following terms have the
following meanings:
"ACCOUNTS RECEIVABLE TURNOVER RATIO" means, on any date of
determination, the ratio computed as of the most recent Calculation Date by
dividing (a) the aggregate amount of Credit Sales during the 12 months ending
on such Calculation Date by (b) the average month-end amount of the Aggregate
Unpaid Balance of Receivables during the 12 months ending on such Calculation
Date.
"ACTIVATION NOTICE" means a notice given by Administrator to
a Collection Bank, pursuant to which Administrator notifies Collection Bank
that from and after the date of such notice, Collection Bank shall be required
to follow only the instructions of Administrator in respect of any withdrawals
or transfers from a LockBox Account, including, without limitation, the form of
notice attached to the LockBox Agreements as an exhibit.
"ADMINISTRATOR" has the meaning set forth in the preamble to
this Agreement.
"ADMINISTRATOR'S ACCOUNT" has the meaning set forth in
Section 4.5.
-1-
"ADVANCE RATE" means the percentage equal to (a) 100% minus
(b) the Reserve Percentage.
"ADVERSE CLAIM" means any lien (statutory or other),
mortgage, pledge, hypothecation, assignment, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"AFFECTED PARTY" means each of Lender, any Liquidity Bank,
any permitted assignee of Lender or any Liquidity Bank, any Support Provider
and any holder of a participation interest in the rights and obligations of any
Liquidity Bank or Credit Bank under the Liquidity Agreement or the Conduit
Credit Agreement, as the case may be, Administrator and any holding company of
Bank.
"AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person.. The word "AFFILIATED" has a
correlative meaning.
"AGGREGATE UNPAID BALANCE" means, on any date of
determination, the aggregate Unpaid Balance of all Eligible Receivables at such
time.
"AGREEMENT" means this Loan Agreement, as it may be amended,
supplemented, restated or otherwise modified from time to time in accordance
with the terms hereof.
"ALLOCATIONS" has the meaning set forth in Section 3.3.
"ALTERNATIVE RATE" means, for any Interest Period, an
interest rate per annum equal to either (a) the LIBOR Rate or (b) if the LIBOR
Rate is unavailable for any reason or there is less than two (2) Business Days'
prior notice to the Liquidity Banks of any funding by them, the Base Rate.
"ALTERNATIVE RATE ALLOCATION" has the meaning set forth in
Section 3.3.
"AMORTIZATION EVENT" means any of the events described in
Section 10.2.
"APPLICABLE MARGIN" has the meaning specified in the Fee
Letter.
"BANK" means SunTrust Bank, a Georgia banking corporation.
"BANKRUPTCY CODE" means the Bankruptcy Code, 11 U.S.C.ss.101,
et seq., as amended.
-2-
"BASE RATE" means, on any date of determination, a
fluctuating rate of interest per annum equal to the higher of (i) the Prime
Rate, or (ii) the Federal Funds Rate most recently determined by Bank plus
0.50% per annum.
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWING BASE" means, on any date of determination, an
amount equal to the product of (a) the Advance Rate as of the most recent
Calculation Date times (b) the excess, if any, of (i) the Aggregate Unpaid
Balance as of the last Business Day of the week then most recently ended (or in
the case of any Borrowing Base Certificate delivered on a daily basis pursuant
to Section 9.1.5(b)(i), as of the immediately preceding Business Day) over (ii)
the Excess Concentration Amount for all Obligors as of the last Business Day of
the week then most recently ended.
"BORROWING BASE CERTIFICATE" means a certificate,
substantially in the form of Exhibit D hereto, duly executed by an authorized
officer of Servicer.
"BORROWING BASE DEFICIT" means, on any date of determination,
an amount equal to the excess, if any, of (a) the aggregate principal amount of
all outstanding Loans at such time over (b) the sum of the Borrowing Base (as
reflected in the most recent Borrowing Base Certificate) plus all Collections
on deposit with the Bank.
"BORROWING REQUEST" has the meaning set forth in Section 2.2.
"BUSINESS DAY" means any day on which (a) Bank is not
authorized or required to be closed for business in Atlanta, Georgia, and The
Depository Trust Company of New York is open for business, and (b) commercial
banks in New York City are not authorized or required to be closed and, in the
case of a Rate Setting Date for Loans bearing interest by reference to the
LIBOR Rate, banks are open for business in London, England.
"CALCULATION DATE" means the last Business Day of each
Calculation Period.
"CALCULATION PERIOD" means a calendar month.
"CANADIAN OBLIGOR" means an Obligor which (a) if a natural
person, is a resident of Canada, or (b) if a corporation or business
organization, is organized under the laws of Canada or any political
subdivision thereof and has its chief executive office and principal place of
business in Canada.
"CHARGE-OFF" means a Receivable not previously deemed a
Defaulted Receivable that is written-off by the Servicer or should, in
accordance with the Credit and Collection Policy, be written-off.
"CLOSING DATE" means the date of the first Loan hereunder.
"COLLATERAL" has the meaning set forth in Section 5.1(a).
-3-
"COLLATERAL AGENT" means SunTrust Bank, a Georgia banking
corporation, in its capacity as Collateral Agent for the Co-Agents and Lenders
under and as defined in the Interface Revolving Credit Agreement, together with
its successors and assigns and any Person now or hereafter appointed as
"Collateral Agent" under the Interface Revolving Credit Agreement.
"COLLATERAL REVIEW" means a report of the independent
certified public accountants of Interface which satisfies the requirements set
forth on Schedule 9.1.5.
"COLLECTION BANK" means, at any time, any of the banks
holding one or more LockBox Accounts.
"COLLECTIONS" means, with respect to any Receivable, all cash
collections and other cash proceeds in respect of such Receivable, including,
without limitation, all yield, Finance Charges or other related amounts
accruing in respect thereof and all cash proceeds of Related Security with
respect to such Receivable.
"COMMERCIAL PAPER NOTES" means short-term promissory notes
issued by Lender to fund its Loans or investments in receivables or other
financial assets.
"COMMERCIAL PAPER RATE" means, for any Interest Period for
all or any portion of the related CP Allocation, a rate per annum equal to the
sum of (i) the rate or, if more than one rate, the weighted average of the
rates, determined by converting to an interest-bearing equivalent rate per
annum the discount rate (or rates) at which Commercial Paper Notes outstanding
during such Interest Period have been or may be sold by any placement agent or
commercial paper dealer selected by Administrator, plus (ii) the commissions
and charges charged by such placement agent or commercial paper dealer with
respect to such Commercial Paper Notes, expressed as a percentage of the face
amount thereof and converted to an interest-bearing equivalent rate per annum.
"COMMITMENT TERMINATION DATE" means the earliest to occur of
(i) the Scheduled Commitment Termination Date, (ii) the date of any termination
of the Lender's Commitment pursuant to Section 2.6, (iii) the effective date on
which the Lender's Commitment is terminated pursuant to Section 10.3, (iv) the
Liquidity Termination Date, and (v) termination of the Credit Banks'
commitments under the Conduit Credit Agreement.
"CONCENTRATION LIMIT" means:
(a) for any other Obligor whose short term unsecured
debt ratings are (i) at least both "A-1" from S&P and "P-1" from
Xxxxx'x, 10.0% of the Aggregate Unpaid Balance; or (ii) at least both
"A-2" from S&P and "P-2" from Xxxxx'x, 5.0% of the Aggregate Unpaid
Balance; or
(b) for any other Obligor who does not have short term
unsecured debt ratings from both S&P and Xxxxx'x of at least the
levels set forth in clause (a)(ii) above but who has long term
unsecured debt ratings from both S&P and Xxxxx'x which are (i) greater
than or equal to both "A" by S&P and "A2" by Xxxxx'x, 10.0% of the
Aggregate Unpaid Balance; (ii) greater than or equal to both "BBB-" by
S&P and "Baa3" by Xxxxx'x and less than or equal to "A-" by S&P
-4-
and "A3" by Xxxxx'x, 5.0% of the Aggregate Unpaid Balance; or (iii)
less than "BBB-" by S&P or "Baa3" by Xxxxx'x, 3.0% of the Aggregate
Unpaid Balance;
(c) for all Canadian Obligors in the aggregate, 3.0% of
the Aggregate Unpaid Balance; and
(d) for any other Obligor, 3.0% of the Aggregate Unpaid
Balance;
PROVIDED that (1) the limitations set forth in the foregoing clauses (a)-(c)
shall apply to each specified Obligor and its Affiliates, considered as if they
were one and the same Person, and (2) in the event that any Obligor has both
long-term and short-term unsecured debt ratings from both S&P and Xxxxx'x that
are covered under the foregoing clauses (a) and (b), the short-term debt
ratings under clause (a) above shall control.
"CONDUIT CREDIT AGREEMENT" means and includes any
program-wide agreement entered into by any Credit Bank providing for the
issuance of one or more letters of credit for the account of Lender, the
issuance of one or more surety bonds for which Lender is obligated to reimburse
the applicable Credit Bank for any drawings thereunder, the sale by Lender to
any Credit Bank of receivables or other financial assets owned or held by
Lender (or portions thereof) and/or the making of loans and/or other extensions
of credit to Lender in connection with its commercial paper program, together
with any cash collateral agreement, letter of credit, surety bond or other
agreement or instrument executed and delivered in connection therewith (but
excluding the Liquidity Agreement, or similar agreement, or any voluntary
advance agreement).
"CONTRACT" means either (i) a written agreement between an
Originator and an Obligor, or (ii) an invoice issued by an Originator to an
Obligor, in either of the foregoing cases, pursuant to which such Obligor is
obligated to pay for goods, merchandise and/or services.
"COVERED TAXES" means Taxes other than Excluded Taxes.
"CP ALLOCATION" has the meaning set forth in Section 3.3.
"CP TRANCHE PERIOD" means, with respect to all or any portion
of the CP Allocation, a period of days from 1 Business Day up to 30 consecutive
days commencing on a Business Day which period is either (a) requested by
Borrower and agreed to by Lender (or by Administrator on Lender's behalf) or
(b) in the absence of such request and agreement, selected by Lender (or by
Administrator on Lender's behalf).
"CREDIT ADVANCE" means a drawing under a letter of credit
issued pursuant to a Credit Agreement for the account of Lender, a loan to
Lender under a Credit Agreement or any other advance or disbursement of funds
to Lender or for Lender's account pursuant to a Credit Agreement or any such
letter of credit, in each case to the extent such drawing, loan, advance or
disbursement has not been repaid or reimbursed to Credit Bank in accordance
with the related Credit Agreement.
"CREDIT AND COLLECTION POLICY" has the meaning set forth in
the Receivables Transfer Agreement and the Receivables Sale Agreement.
-5-
"CREDIT BANK" means and includes Bank and any other or
additional bank or other Person (other than Borrower or other customer of
Lender or any liquidity provider as such) now or hereafter extending credit or
a purchase commitment to or for the account of Lender or issuing a letter of
credit, surety bond or other instrument, in each case to support any
obligations arising under or in connection with Lender's commercial paper
program.
"CREDIT SALES" means, for any period of determination, the
aggregate amount of all trade receivables with credit terms of any kind
originated by any Originator during such period.
"CURRENCY CONTRACTS" shall mean any forward contracts,
futures contracts, foreign exchange contracts, currency swap agreements, and
other similar agreements and arrangements entered into by Interface or any
consolidated Subsidiary designed to protect Interface or any such Subsidiary
against fluctuations in foreign exchange rates.
"DAYS SALES OUTSTANDING RATIO" means, on any date of
determination, the ratio computed as of the most recent Calculation Date by
dividing (a) 360 by (b) the Accounts Receivable Turnover Ratio for the
Calculation Period ending on such Calculation Date.
"DEBT" of any Person means, without duplication, (i) all
obligations of such Person which in accordance with GAAP would be shown on the
balance sheet of such Person as a liability (including, without limitation,
obligations for borrowed money and for the deferred purchase price of property
or services, and obligations evidenced by bonds, debentures, notes or other
similar instruments), (ii) all rental obligations under leases required to be
capitalized under GAAP or under Synthetic Lease Obligations (other than those
under the Guilford Equipment Lease), (iii) all Guaranties of such Person
(including, without limitation, all guaranties of Debt referred to in this
definition of such Person) and all reimbursement obligations of such Person in
respect of letters of credit issued for its account, (iv) Debt of others
secured by any Lien upon property owned by such Person, whether or not assumed,
(v) all net payment obligations or other liabilities under Hedging Agreements,
and (vi) Redeemable Capital Stock of such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued dividends.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Debt shall be
required to be determined pursuant to this Agreement, and if such price is
based on, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
"DEFAULT RATE" has the meaning set forth in Section 3.1(c).
"DEFAULT RATIO" means, on any date of determination, the
ratio (expressed as a percentage) computed as of the most recent Calculation
Date by dividing (a) the sum (without double counting) of (i) the Unpaid
Balance of Receivables that became Defaulted Receivables during the Calculation
Period ending on such Calculation Date, plus (ii) the Unpaid Balance of
Receivables that became Charge-Offs during the Calculation Period ending on
such Calculation
-6-
Date by (b) Credit Sales for the Calculation Period ending 4 months prior to
such Calculation Date.
"DEFAULTED RECEIVABLE" means, as of any date of
determination, any Receivable (i) which the Servicer has or should have
charged-off or deemed uncollectible in accordance with the Credit and
Collection Policy after taking a reasonable time to apply Collections received
to applicable invoices and reconcile the amount of such Receivable, (ii) as to
which, as of such date of determination, any payment, or part thereof, remains
unpaid for 91 days or more past the due date for such payment, determined by
reference to the original contractual payment terms of such Receivable or (iii)
as to which the Obligor thereon has suffered an Event of Bankruptcy.
"DELINQUENCY RATIO" means, on any date of determination, the
ratio (expressed as a percentage) computed as of the most recent Calculation
Date, by dividing (a) the Unpaid Balance of Receivables that are Delinquent
Receivables as of such Calculation Date by (b) an amount equal to the Aggregate
Unpaid Balance as of such Calculation Date, minus the aggregate Excess
Concentration Amount as of such Calculation Date.
"DELINQUENT RECEIVABLE" means, as of any date of
determination, any Receivable (other than a Defaulted Receivable) as to which,
as of such date of determination, any payment, or part thereof, remains unpaid
for 61 days or more past the due date for such payment, determined by reference
to the original contractual payment terms of such Receivable.
"DILUTION HORIZON RATIO" means, on any date of determination,
the ratio (expressed as a percentage) computed as of the most recent
Calculation Date by dividing (a) the sum of (i) Credit Sales for the
Calculation Period ending on such Calculation Date plus (ii) 50% of Credit
Sales for the immediately preceding Calculation Period, by (b) an amount equal
to (i) the Aggregate Unpaid Balance as of such Calculation Date minus (ii) the
aggregate Excess Concentration Amount as of such Calculation Date.
"DILUTION RATIO" means, on any date of determination, the
ratio (expressed as a percentage) computed as of the most recent Calculation
Date by dividing (a) Dilutions for the Calculation Period ending on such
Calculation Date by (b) Credit Sales for the Calculation Period ending 1 month
prior to such Calculation Date.
"DILUTION RESERVE" means, on any date of determination, the
product computed as of the most recent Calculation Date, of (a) the sum of (i)
the product of (x) the Stress Factor times (y) the Expected Dilution Ratio plus
(ii) the product of (x) the positive difference, if any, between (1) the
Dilution Spike Rate less (2) the Expected Dilution Ratio times (y) a ratio
computed by dividing (1) the Dilution Spike Rate by (2) the Expected Dilution
Ratio times (b) the Dilution Horizon Ratio.
"DILUTION SPIKE RATE" means, on any date of determination,
the highest Dilution Ratio over the 12-month period ending on the most recent
Calculation Date.
"DILUTIONS" means, for any period of determination, the
aggregate amount of returns, allowances, net credits and any other non-cash
reductions to the Credit Sales during such period.
-7-
"DISTRIBUTION DATE" means the 10th day of each calendar month
after the Closing Date (or, if such day is not a Business Day, the Business Day
immediately thereafter).
"DOCUMENTS" means all documentation relating to the
Receivables including, without limitation, the Contracts, billing statements
and computer records and programs.
"DOLLAR(S)" and the sign "$" shall mean lawful money of the
United States of America.
"ELIGIBLE RECEIVABLE" means each Receivable (net of any cash
in advance or cash prepayment received by an Originator) that meets the
following criteria:
(a) that was created by an Originator in compliance with
its Credit and Collection Policy, in the ordinary course of the
business of such Originator;
(b) that was documented in compliance with the
applicable Originator's standard administration and documentation
policies and procedures;
(c) is not (i) a Delinquent Receivable, or (ii) a
Defaulted Receivable;
(d) as to which, at the time of the sale or contribution
of such Receivable to Borrower, Interface was the sole owner thereof
and had good and marketable title thereto, free and clear of all
Adverse Claims (other than Permitted Encumbrances), and which was sold
or contributed to Borrower pursuant to the Receivables Sale Agreement
free and clear of all Adverse Claims other than in favor of
Administrator;
(e) the assignment of which by the applicable Originator
to Interface pursuant to the Receivables Transfer Agreement, and/or by
Interface to Borrower pursuant to the Receivables Sale Agreement, does
not contravene or conflict with any law, rule or regulation or any
contractual or other restriction, limitation or encumbrance, and the
sale or assignment of which does not require the consent of the
Obligor thereof;
(f) which is denominated and payable in Dollars and is
only payable in the United States of America;
(g) the Obligor of which is a resident of the United
States or Canada;
(h) the Obligor of which is not an officer, director or
Affiliate of any Originator or Borrower;
(i) the Obligor of which is not a Governmental
Authority;
(j) that is in full force and effect and constitutes the
legally valid and binding payment obligation of the Obligor with
respect thereto, enforceable against such Obligor in accordance with
its terms;
-8-
(k) that does not contravene in any material respect any
applicable requirements of law (including without limitation all laws,
rules and regulations relating to truth in lending, fair credit
billing, fair credit reporting, fair debt collection practices and
privacy) and which complies with all applicable requirements of law
and with respect to which all consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
governmental authority required to be obtained, effected or given by
the related Originator in connection with the creation or the
execution, delivery and performance of such Receivable, have been duly
obtained, effected or given and are in full force and effect;
(l) that complies with all applicable requirements of
the applicable Credit and Collection Policy;
(m) as to which each of Interface's, Borrower's and
Administrator's (for the benefit of the Secured Parties) first
priority (subject to Permitted Encumbrances) security interest in such
Receivable has been perfected under the applicable Uniform Commercial
Code and other applicable laws;
(n) as to which the Servicer or an Originator is in
possession of the related Receivable File;
(o) which provides for repayment in full of the Unpaid
Balance thereof within 90 days of the date of the creation thereof;
(p) the terms of which have not been modified or waived
except as permitted under the Credit and Collection Policy and this
Agreement;
(q) which constitutes an "account" or a "payment
intangible" under and as defined in Article 9 of the Uniform Commercial
Code of all applicable jurisdictions;
(r) which is not subject to any dispute, right of
rescission, set-off, counterclaim or any other defense (including
defenses arising out of violations of usury laws) of the applicable
Obligor against the applicable Originator or any other Adverse Claim,
and the Obligor thereon holds no right as against such Originator to
cause such Originator to repurchase the goods the sale of which shall
have given rise to such Receivable (except with respect to sale
discounts effected pursuant to the Contract, or goods returned in
accordance with the terms of the Contract);
(s) which is not owing from an Obligor as to which more
than 10% of the aggregate Outstanding Balance of all Receivables owing
from such Obligor are Defaulted Receivables; and
(t) the applicable Originator has satisfied and fully
performed all obligations on its part with respect to such Receivable
required to be fulfilled by it, and no further action is required to
be performed by any Person with respect
-9-
thereto other than payment thereon by the applicable Obligor
(excluding warranty obligations for which no claim exists).
"EVENT OF BANKRUPTCY" shall be deemed to have occurred with
respect to a Person if either:
(a) a case or other proceeding shall be commenced,
without the application or consent of such Person, in any court,
seeking the liquidation, reorganization, debt arrangement,
dissolution, winding up, or composition or readjustment of debts of
such Person, the appointment of a trustee, receiver, custodian,
liquidator, assignee, sequestrator or the like for such Person or all
or substantially all of its assets, or any similar action with respect
to such Person under any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts and,
solely in the case of Borrower, such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 60 consecutive
days; or an order for relief in respect of such Person shall be
entered in an involuntary case under the federal bankruptcy laws or
other similar laws now or hereafter in effect; or
(b) such Person shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency,
reorganization, debt arrangement, dissolution or other similar law now
or hereafter in effect, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) for such Person or
for any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail to, or admit in
writing its inability to, pay its debts generally as they become due,
or, if a corporation or similar entity, its board of directors shall
vote to implement any of the foregoing.
"EVENT OF DEFAULT" means any of the events described in
Section 10.1.
"EXCESS CONCENTRATION AMOUNT" means, on any date of
determination, with respect to any Obligor and its Affiliates considered as if
they were one and the same Obligor, the amount, if any, by which the Aggregate
Unpaid Balance of such Obligor and its Affiliates at such time exceeds the
Concentration Limit for such Obligor and its Affiliates at such time.
"EXCLUDED DEPOSIT ACCOUNTS" means the LockBox Accounts at
Bank One, NA and related LockBoxes of Borrower identified on Schedule 8.12 as
"Excluded LockBoxes".
"EXCLUDED TAXES" means, in the case of any Indemnified Party,
taxes imposed on its overall net income, and franchise taxes and branch profit
taxes based on net income, imposed on it by (i) the jurisdiction under the laws
of which such Indemnified Party is organized or (ii) the jurisdiction in which
such Indemnified Party's principal executive office is located.
"EXPECTED DILUTION RATIO" means, on any date of
determination, the rolling twelve-month average Dilution Ratio for the 12-month
period ending on the most recent Calculation Date.
-10-
"EXTENSION FEE" has the meaning provided in the Fee Letter.
"FACILITY LIMIT" means $50,000,000, as may be reduced
pursuant to Section 2.6.
"FEDERAL FUNDS RATE" means, for any period, the per annum
rate set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board (including
any such successor, "H.15(519)") for such day opposite the caption "Federal
Funds (Effective)." If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publications, published by the Federal
Reserve Bank of Atlanta (including any such successor, the "COMPOSITE 3:30 P.M.
QUOTATIONS") for such day under the caption "Federal Funds Effective Rate." If
on any relevant day the appropriate rate for such previous day is not yet
published in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate
for such day will be the arithmetic mean as determined by Bank of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by Bank.
"FEE LETTER" has the meaning set forth in Section 3.4.
"FEES" means all fees and other amounts payable by Borrower
to Administrator or Lender pursuant to the Fee Letter.
"FINANCE CHARGES" means, with respect to a Contract, any
finance, interest, late payment charges or similar charges owing by an Obligor
pursuant to such Contract.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
authority or functions of or pertaining to government including any authority
or other quasi-governmental entity established to perform any of such
functions.
"GUARANTY" shall mean any contractual obligation, contingent
or otherwise, of a Person with respect to any Indebtedness of another Person,
including without limitation, any such Indebtedness directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable, including contractual obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness or any security therefor, or any agreement to provide funds for
the payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, or other financial condition, or to make any payment
other than for value
-11-
received. The amount of any Guaranty shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
guaranty is made or, if not so stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.
"GUILFORD EQUIPMENT LEASE" shall mean the Master Equipment
Lease Agreement dated as of June 30, 1995, between Fleet Credit Corporation and
Interface Fabrics Group Finishing, Inc. (formerly known as Guilford of Maine,
Inc.), relating to the leasing of various textile manufacturing equipment in
aggregate original amount (acquisition costs) of not more than $21,000,000 and
in an aggregate current amount (acquisition costs) of not more than $6,100,000,
as such agreement, in whole or in part, may from time to time be amended,
renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified, whether with the same or any other
Person(s) as lessor(s) or lender(s) (including, without limitation, any
successive renewals, extensions, substitutions, refinancings, restructurings,
replacements, supplements or other modifications of the foregoing); provided
that from and after the Closing Date the aggregate amount (acquisition costs)
of the Guilford Equipment Lease may not exceed $6,100,000 at any time.
"HEDGING AGREEMENTS" shall mean the collective reference to
Currency Contracts and Interest Rate Contracts or similar agreements or
combinations thereof.
"INDEMNIFIED AMOUNTS" has the meaning set forth in Section
14.1.
"INDEMNIFIED PARTY" has the meaning set forth in Section
14.1.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement
dated as of February 12, 2003 by and between Administrator and the Collateral
Agent, as such agreement may be amended, supplemented, restated, replaced or
otherwise modified from time to time.
"INTEREST PERIOD" means:
(a) with respect to any CP Allocation, its CP Tranche
Period;
(b) with respect to any Alternative Rate Allocation, (i)
initially, the period commencing on the date of the initial
establishment of such Allocation and ending on (but excluding) the
Business Day immediately preceding the next following Scheduled
Interest Payment Date, and (ii) thereafter, each period commencing on
(and including) the Business Day immediately preceding a Scheduled
Interest Payment Date and ending on (but excluding) the Business Day
immediately preceding the next following Scheduled Interest Payment
Date;
PROVIDED, HOWEVER, that if any Interest Period for any Allocation that
commences before the Commitment Termination Date would otherwise end on a date
occurring after such Commitment Termination Date, such Interest Period shall
end on such Commitment Termination Date and the duration of each such Interest
Period that commences on or after the Commitment Termination Date, if any,
shall be of such duration as shall be selected by Administrator.
-12-
"INTEREST RATE CONTRACTS" shall mean any forward contracts,
futures contracts, interest rate exchange agreements, interest rate cap
agreements, interest rate collar agreements, and other similar agreements and
arrangements entered into by Interface or any of its consolidated Subsidiaries
designed to protect Interface or any such Subsidiary against fluctuations in
interest rates.
"INTERFACE" means Interface, Inc., a Georgia corporation, and
its successors.
"INTERFACE REVOLVING CREDIT AGREEMENT" means that certain
Fourth Amended and Restated Credit Agreement dated as of January 17, 2002,
among Interface, certain Subsidiaries of Interface, First Union National Bank,
as Domestic Agent and Multicurrency Agent, the financial institutions signatory
thereto as lenders, SunTrust Bank, as Collateral Agent, and Citicorp North
America, Inc., as Syndication Agent, as amended by that certain First Amendment
to Credit Agreement and Letter of Credit Agreement dated as of December 12,
2002, and as further amended, modified, supplemented, extended, refinanced or
replaced from time to time, and after giving effect to any waiver from time to
time granted by the requisite lenders and/or agents of any covenants, terms or
provisions thereof.
"LENDER" has the meaning set forth in the preamble to this
Agreement.
"LENDER NOTE" has the meaning set forth in Section 2.7.
"LENDER'S COMMITMENT" has the meaning set forth in Section
2.1.
"LIBOR RATE" means, for any Interest Period, the rate per
annum on the Rate Setting Day of such Interest Period shown on page 3750 of
Telerate or any successor page as the composite offered rate for London
interbank deposits for one month, as shown under the heading "USD" as of 11:00
a.m. (London time); PROVIDED that in the event no such rate is shown, the LIBOR
Rate shall be the rate per annum (rounded upwards, if necessary, to the nearest
1/16th of one percent) based on the rates at which Dollar deposits for one
month are displayed on page "LIBOR" of the Reuters Screen as of 11:00 a.m.
(London time) on the Rate Setting Day (it being understood that if at least two
(2) such rates appear on such page, the rate will be the arithmetic mean of
such displayed rates); PROVIDED FURTHER, that in the event fewer than two (2)
such rates are displayed, or if no such rate is relevant, the LIBOR Rate shall
be the rate per annum equal to the average of the rates at which deposits in
Dollars are offered by Administrator at approximately 11:00 a.m. (London time)
on the Rate Setting Day to prime banks in the London interbank market for a one
month.
"LIEN" shall mean any lien, charge, claim, security interest,
mortgage or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever.
"LIQUIDITY AGREEMENT" means and includes (a) the Liquidity
Asset Purchase Agreement (regarding Interface Securitization Corporation),
dated as of February 12, 2003, among Lender, as borrower, Bank, as liquidity
agent for the Liquidity Banks, Administrator, and the Liquidity Banks, or (b)
any other agreement hereafter entered into by Lender providing for the sale by
Lender of Loans (or portions thereof), or the making of loans or other
extensions of credit to Lender secured by security interests in the Loans (or
portions thereof), to support all or
-13-
part of Lender's payment obligations under the Commercial Paper Notes or to
provide an alternate means of funding Lender's investments in accounts
receivable or other financial assets, in each case as amended, supplemented,
restated or otherwise modified from time to time.
"LIQUIDITY BANK" means and includes Bank and the various
financial institutions as are, or may become, parties to the Liquidity
Agreement, as purchasers thereunder.
"LIQUIDITY TERMINATION DATE" means the earlier to occur of
(a) February 11, 2004, as such date may be extended from time to time by the
Liquidity Banks in accordance with the Liquidity Agreement, and (b) the
occurrence of an Event of Bankruptcy with respect to Lender.
"LOAN" means any amount disbursed as principal by Lender to
Borrower under this Agreement.
"LOCKBOX" means a postal box maintained on behalf of Borrower
or the Servicer for the purpose of receiving checks and money orders
constituting Collections of the Receivables.
"LOCKBOX ACCOUNT" means any of those bank accounts described
on Schedule 8.12 hereto and any additional or replacement account to which Mail
Payments are deposited for clearing.
"LOCKBOX ACCOUNT AGREEMENT" means an agreement among an
Originator, Borrower, Administrator and the bank holding any LockBox Account,
in substantially the form of Exhibit E attached hereto.
"LOSS HORIZON RATIO" means, on any date of determination, the
ratio computed as of the most recent Calculation Date by dividing (a) the sum
of (i) the Weighted Average Credit Percentage of Credit Sales for the
Calculation Period ending on such Calculation Date, plus (ii) Credit Sales for
the Calculation Period ending one (1) month prior to such Calculation Date,
plus (iii) Credit Sales for the Calculation Period ending two (2) months prior
to such Calculation Date, plus (iv) 23% of Credit Sales for the Calculation
Period ending three (3) months prior to such Calculation Date, by (b) an amount
equal to (i) the Aggregate Unpaid Balance as of such Calculation Date, minus
(ii) the aggregate Excess Concentration Amount as of such Calculation Date.
"LOSS RESERVE" means, on any date of determination, the
greater of (a) product of (i) the highest rolling 3-month average Default Ratio
over the 12 months ending on the most recent Calculation Date, times (ii) the
Loss Horizon Ratio as of such Calculation Date, times (iii) the Stress Factor,
or (b) 12%.
"MAIL PAYMENTS" has the meaning specified in Section
11.2.3(a).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) on the business, property, condition (financial or otherwise) or results of
operations or prospects of (i) Servicer and its Subsidiaries taken as a whole,
or (ii) Borrower, (b) the ability of Borrower or Servicer to perform its
respective obligations under the Agreement or any other Transaction Document to
-14-
which it is a party, (c) the legality, validity or enforceability of the
Agreement or any other Transaction Document, (d) the existence, validity,
perfection or priority of (i) Administrator's (for the benefit of the Secured
Parties) security interest in the Collateral, or (ii) Borrower's ownership
interest in the Receivables; or (e) the validity, enforceability or
collectibility of the Receivables generally or of any material portion of the
Receivables.
"MATERIAL DEBT" has the meaning specified in Section 11.7.7.
"MONTHLY REPORT" means a report, substantially in the form of
Exhibit C or in such other form acceptable to Administrator, prepared by
Servicer as of the Calculation Date then most recently occurring signed by an
authorized officer of Servicer.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"OBLIGATIONS" means all obligations (monetary or otherwise)
of Borrower to Lender, Administrator, any Affected Party or any Indemnified
Party and their respective successors, permitted transferees and assigns
arising under or in connection with this Agreement, the Lender Note and each
other Transaction Document, in each case however created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter existing,
or due or to become due.
"OBLIGOR" means, with respect to any Receivable, each Person
obligated to make payments with respect to such Receivable, including any
guarantor thereof.
"ORGANIZATIONAL DOCUMENTS" means, for any Person, the
documents for its formation and organization, which, for example, (a) for a
corporation are its corporate charter and bylaws, (b) for a partnership are its
certificate of partnership (if applicable) and partnership agreement, (c) for a
limited liability company are its certificate of formation or organization and
its operating agreement, regulations or the like and (d) for a trust is the
trust agreement, declaration of trust, indenture or bylaws under which it is
created.
"ORIGINAL SELLER" means any of Interface Americas, Inc., a
Georgia corporation, Interface Fabrics Group Marketing, Inc., a Nevada
corporation, Pandel, Inc., a Georgia corporation, Interface Teknit, Inc., a
Michigan corporation, Interface TekSolutions, LLC, a Michigan limited liability
company, and any other Person that may hereafter become an "Original Seller"
under and pursuant to the terms of the Receivables Transfer Agreement.
"ORIGINATOR" means each of (i) Interface, and (ii) the
Original Sellers.
"OUTSTANDING BALANCE" of any Receivable at any time means the
then outstanding principal balance thereof.
"PERMITTED ENCUMBRANCES" means the following: (a) Liens for
taxes or assessments or other governmental charges not yet due and payable; and
(b) Liens created by the Transaction Documents.
-15-
"PERMITTED INVESTMENT" means, at any time:
(i) marketable obligations issued by, or the full and
timely payment of which is directly and fully guaranteed or insured
by, the United States government or any other government with an
equivalent rating, or any agency or instrumentality thereof when such
marketable obligations are backed by the full faith and credit of the
United States government or such other equivalently rated government,
as the case may be, but excluding any securities which are derivatives
of such obligations;
(ii) time deposits, bankers' acceptances and certificates
of deposit of any domestic commercial bank or any United States branch
or agency of a foreign commercial bank which (x) has capital, surplus
and undivided profits in excess of $100,000,000 and which has a
commercial paper or certificate of deposit rating meeting the
requirements specified in clause (iii) below (or equivalent rating
from the Rating Agencies) or (y) is set forth in a list (which may be
updated from time to time) (A) approved by Administrator and (B) with
respect to which a written statement has been obtained from each of
the Rating Agencies to the effect that the rating of the Commercial
Paper Notes will not be downgraded or withdrawn solely as a result of
the acquisition of such investments;
(iii) commercial paper which is (x) rated at least as high
as the Commercial Paper Notes by the Rating Agencies, or (y) set forth
in a list (which may be updated from time to time) (A) approved by
Administrator and (B) with respect to which a written statement has
been obtained from each of the Rating Agencies to the effect that the
rating of the Commercial Paper Notes will not be downgraded or
withdrawn solely as a result of the acquisition of such investments;
(iv) secured repurchase obligations for underlying
securities of the types described in clauses (i) and (ii) above
entered into with any bank of the type described in clause (ii) above;
and
(v) freely redeemable shares in money market funds which
invest solely in obligations, bankers' acceptances, time deposits,
certificates of deposit, repurchase agreements and commercial paper of
the types described in clauses (i) through (iv) above, without regard
to the limitations as to the maturity of such obligations, bankers'
acceptances, time deposits, certificates of deposit, repurchase
agreements or commercial paper set forth below, which are rated at
least "AAm" or "AAmg" or their equivalent by both Rating Agencies,
PROVIDED that there is no "r-highlighter" affixed to such rating.
"PERSON" means an individual, partnership, limited liability
company, corporation (including a business trust), joint stock company, trust,
unincorporated association, joint venture, government or any agency or
political subdivision thereof or any other entity.
-16-
"PRIME RATE" means as of any date of determination, the rate
of interest most recently announced by Bank at its principal office in Atlanta,
Georgia as its prime rate (it being understood that at any one time there shall
exist only one such prime rate so announced, which rate is not necessarily
intended to be the lowest rate of interest determined by Bank in connection
with extensions of credit).
"PROGRAM DOCUMENTS" means the Liquidity Agreement, the
Conduit Credit Agreement, the Voluntary Advance Agreement, the documents under
which Administrator performs its obligations with respect to Lender's
commercial paper program and the other documents to be executed and delivered
in connection therewith, as amended, supplemented, restated or otherwise
modified from time to time.
"PURCHASE PRICE CREDIT" has the meaning set forth in the
Receivables Sale Agreement or the Receivables Transfer Agreement, as
applicable.
"RATE SETTING DAY" means, for any Interest Period, two (2)
Business Days prior to the commencement of such Interest Period. In the event
such day is not a Business Day, then the Rate Setting Day shall be the
immediately preceding Business Day.
"RATING AGENCIES" means S&P and Moody's.
"RECEIVABLE" means each "RECEIVABLE" under and as defined in
the Receivables Sale Agreement in which Borrower now has or hereafter acquires
any right, title or interest.
"RECEIVABLE FILE" means with respect to a Receivable, (i) the
Contract giving rise to the Receivable and other evidences of the Receivable
including, without limitation, tapes, discs, punch cards and related property
and rights and (ii) each UCC financing statement related thereto, if any.
"RECEIVABLES SALE AGREEMENT" means the Receivables Sale
Agreement, dated as of February 12, 2003, by and between Interface, as seller,
and Borrower, as buyer, as such agreement may be further amended, supplemented,
restated or otherwise modified from time to time with the prior written consent
of Administrator.
"RECEIVABLES TRANSFER AGREEMENT" means the Receivables
Transfer Agreement, dated as of February 12, 2003, by and between the Original
Sellers, as sellers, and Interface, as buyer, as such agreement may be further
amended, supplemented, restated or otherwise modified from time to time with
the prior written consent of Administrator.
"RECORDS" means, with respect to any Receivable, all
Contracts and other documents, books, records and other information (including,
without limitation, computer programs, tapes, disks, punch cards, data
processing software and related property and rights) relating to such
Receivable, any Related Security therefor and the related Obligor.
"REDEEMABLE CAPITAL STOCK" shall have the meaning assigned to
such term in the Interface Revolving Credit Agreement.
-17-
"REGULATORY CHANGE" means, relative to any Affected Party:
(a) any change in (or the adoption, implementation,
change in the phase-in or commencement of effectiveness of) any: (i)
United States Federal or state law or foreign law applicable to such
Affected Party, (ii) regulation, interpretation, directive,
requirement or request (whether or not having the force of law)
applicable to such Affected Party of (A) any court or government
authority charged with the interpretation or administration of any law
referred to in clause (a)(i), or of (B) any fiscal, monetary or other
authority having jurisdiction over such Affected Party, or (iii) GAAP
or regulatory accounting principles applicable to such Affected Party
and affecting the application to such Affected Party of any law,
regulation, interpretation, directive, requirement or request referred
to in clause (a)(i) or (a)(ii) above;
(b) any change in the application to such Affected Party
of any existing law, regulation, interpretation, directive,
requirement, request or accounting principles referred to in clause
(a)(i), (a)(ii) or (a)(iii) above; or
(c) the issuance, publication or release of any
regulation, interpretation, directive, requirement or request of a
type described in clause (a)(ii) above to the effect that the
obligations of any Liquidity Bank under the Liquidity Agreement are
not entitled to be included in the zero percent category of
off-balance sheet assets for purposes of any risk-weighted capital
guidelines applicable to such Liquidity Bank or any related Affected
Party.
"RELATED SECURITY" means all "RELATED SECURITY" under and as
defined in the Receivables Sale Agreement in which Borrower now has or
hereafter acquires any right, title or interest.
"REQUIRED CAPITAL AMOUNT" has the meaning specified in the
Receivables Sale Agreement.
"REQUIREMENTS OF LAW" for any Person or any of its property
shall mean the Organizational Documents of such Person or any of its property,
and any statute, law, treaty, rule or regulation, or determination of an
arbitrator or Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or businesses or to which such Person
or any of its property or businesses is subject, whether federal, state or
local.
"RESERVE PERCENTAGE" means the percentage equal to the sum
of (i) the Loss Reserve, (ii) the Dilution Reserve, (iii) the Yield Reserve,
and (iv) the Servicing Reserve.
"S&P" means Standard & Poor's Ratings Group, a division of
The XxXxxx-Xxxx Companies, Inc.
"SCHEDULED COMMITMENT TERMINATION DATE" means February 11,
2004, as extended from time to time by mutual agreement of the parties hereto.
-18-
"SCHEDULED INTEREST PAYMENT DATE" means with respect to each
other Loan, each Distribution Date hereafter commencing with March 12, 2003.
"SECURED PARTIES" means Lender, Administrator and each
Indemnified Party, and the successors and permitted assigns of each of the
foregoing.
"SERVICER" means Interface, or any successor Servicer
appointed as provided in Section 11.5.
"SERVICER EVENT OF DEFAULT" shall have the meaning specified
in Section 11.7.
"SERVICING FEE" means, as to any Calculation Period, the fee
payable to the Servicer which, so long as Interface or one of its Affiliates is
the Servicer, shall be equal to the Servicing Fee Rate divided by 12 multiplied
by the Aggregate Unpaid Balance at the beginning of such Calculation Period.
The Servicing Fee for any successor Servicer shall be equal to the fee
reasonably agreed to by Administrator and such successor Servicer.
"SERVICING FEE RATE" means 2.40%.
"SERVICING RESERVE" means, on any date of determination, the
product of: (a) the highest Day Sales Outstanding Ratio during the 12 months
ending on the most recent Calculation Date, (b) the Stress Factor, (c) 2.40%,
and (d) 1/360.
"SIGNIFICANT EVENT" means any Amortization Event or Event of
Default.
"SOLVENT" means with respect to any Person that as of the
date of determination both (A)(i) the then fair saleable value of the property
of such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured considering all financing
alternatives and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (iii) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due; and
(B) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability.
"STRESS FACTOR" means 2.0.
"SUBORDINATED LOANS" has the meaning assigned to such term in
the Receivables Sale Agreement.
"SUBORDINATED NOTE" has the meaning assigned to such term in
the Receivables Sale Agreement.
-19-
"SUBSIDIARY" means, with respect to any Person, a corporation
of which such Person and/or its other Subsidiaries own, directly or indirectly,
such number of outstanding shares as have more than 50% of the ordinary voting
power for the election of directors.
"SUPPORT PROVIDER" means and includes any entity now or
hereafter extending credit or liquidity support or having a commitment to
extend credit or liquidity support to or for the account of, or to make loans
to or purchases from, Lender or issuing a letter of credit, surety bond or
other instrument to support any obligations arising under or in connection with
the commercial paper program of Lender.
"SYNTHETIC LEASE OBLIGATIONS" shall mean, collectively, all
payment obligations of Interface or any of its consolidated Subsidiaries
pursuant to so-called "synthetic" leases not treated as capital leases under
GAAP, but which are treated as financings under the Internal Revenue Code.
"TAXES" means any and all present or future taxes, duties,
levies, imposts, deductions, charges or withholdings, and any and all
liabilities (including but not limited to interest and penalties) with respect
to the foregoing, imposed by any Governmental Authority.
"TELERATE PAGE 3750" shall mean the display designated as
"Page 3750" on the Telerate Service (or such other page as may replace "Page
3750" on that service or another service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of displaying
British Bankers' Association Interest Settlement Rate for Dollars).
"TRANSACTION DOCUMENTS" means this Agreement, the Receivables
Sale Agreement, the Receivables Transfer Agreement, the Lender Note, the
Subordinated Note, the Fee Letter, the Intercreditor Agreement, and the other
instruments, certificates, agreements, reports and documents to be executed and
delivered under or in connection with this Agreement, the Receivables Transfer
Agreement or the Receivables Sale Agreement (except the Program Documents), as
any of the foregoing may be amended, supplemented, amended and restated, or
otherwise modified from time to time in accordance with this Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction or jurisdictions.
"UNMATURED SERVICER EVENT OF DEFAULT" means any event that,
if it continues uncured, will, with lapse of time or notice or lapse of time
and notice, constitute a Servicer Event of Default.
"UNMATURED SIGNIFICANT EVENT" means any event that, if it
continues uncured, will, with lapse of time or notice or lapse of time and
notice, constitute a Significant Event.
"UNPAID BALANCE" means, with respect to any Receivable, the
sum of (a) the Outstanding Balance thereof, plus (without duplication), (b) the
aggregate amount required to repay in full all interest, finance, prepayment
and other fees or charges of any kind payable in respect of, such Outstanding
Balance.
-20-
"VOLUNTARY ADVANCE AGREEMENT" means the Voluntary Advance
Agreement, dated as of March 11, 1999, among Lender, Administrator and Bank, as
it may be amended, supplemented, restated or otherwise modified from time to
time.
"WEIGHTED AVERAGE CREDIT PERCENTAGE" means, on any date of
determination, the percentage determined pursuant to the following formula:
WACT
[ 100% x [ ---- ] ]
30
WHERE:
WACT = the Weighted Average Credit Terms for the most recent
Calculation Period.
"WEIGHTED AVERAGE CREDIT TERMS" means, for any Calculation
Period of determination, the weighted average of payment terms granted in
invoices for Receivables generated during such Calculation Period.
"YIELD RESERVE" means, on any date of determination, the
product of (a) the highest Day Sales Outstanding Ratio during the 12 months
ending on the most recent Calculation Date, (b) the Stress Factor, (c) the
Prime Rate as in effect on such Calculation Date and (d) 1/360.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms
defined in this Agreement have the meanings as so defined herein when
used in the Lender Note or any other Transaction Document,
certificate, report or other document made or delivered pursuant
hereto.
(b) Each term defined in the singular form in Section
1.1 or elsewhere in this Agreement shall mean the plural thereof when
the plural form of such term is used in this Agreement, the Lender
Note or any other Transaction Document, certificate, report or other
document made or delivered pursuant hereto, and each term defined in
the plural form in Section 1.1 shall mean the singular thereof when
the singular form of such term is used herein or therein.
(c) The words "HEREOF," "HEREIN," "HEREUNDER" and
similar terms when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and article, section, subsection, schedule and exhibit
references herein are references to articles, sections, subsections,
schedules and exhibits to this Agreement unless otherwise specified.
-21-
Section 1.3 Other Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. All
terms used in Article 9 of the UCC and not specifically defined herein, are
used herein as defined in such Article 9.
Section 1.4 Computation of Time Periods. Unless
otherwise stated in this Agreement, in the computation of a period of time from
a specified date to a later specified date, the word "FROM" means "FROM AND
INCLUDING" and the words "TO" and "UNTIL" each means "TO BUT EXCLUDING."
Section 1.5 Limitation on Recourse. Notwithstanding
anything to the contrary in this Agreement or any other Transaction Document,
Borrower shall have no personal liability to the Lender or the Administrator
under any Transaction Document for the payment of the principal balance of any
or all of the Loans beyond the interests of Borrower in the Collateral;
provided, however, that Borrower shall have personal liability for (a) any
interest that may accrue on the Loans, (b) any Fees, (c) any Servicer costs and
expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables, (d) all amounts payable pursuant
to Section 4.1(d), 6.1, 6.2, 6.3 or 14.1 of this Agreement, and (e) any damage
suffered by the Lender or the Administrator as a result of (i) any fraud or
misrepresentation by Borrower in connection with any of the Loans, the
Collateral or the Transaction Documents or (ii) any breach by Borrower of any
of its representations, warranties or covenants in any of the Transaction
Documents (other than its covenants with respect to the payment of the
principal balance of the Loans). Subject to the exceptions set forth above, as
between the Lender and the Administrator, on the one hand, and Borrower, on the
other hand, the Lender and the Administrator shall proceed only against, and
shall rely solely on, the Collateral for payment or other satisfaction of the
principal balance of the Loans and the Lender's and Administrator's sole and
exclusive remedy with respect to the principal balance of the Loans upon the
occurrence of any Significant Event shall be to exercise their rights and
remedies with respect to the Collateral and the Lender and the Administrator
shall not xxx or otherwise proceed against Borrower to collect payment of the
principal balance of the Loans or any deficiency which may remain owing on the
principal balance of the Loans after the exercise by the Lender and
Administrator of their rights and remedies with respect to the Collateral. The
foregoing provisions concern only the personal liability of Borrower for the
principal balance of the Loans under the Transaction Documents and do not in
any manner, and shall not be interpreted or construed to, diminish, affect,
modify, or impair in any manner whatsoever the rights, titles or interests of
the Lender or the Administrator in or to the Collateral, the pursuit or
exercise by the Lender or the Administrator of any rights or remedies which the
Lender or Administrator may have with respect to the Collateral, the priority
or enforceability of the Lender's or the Administrator's rights, titles and
interests in or to the Collateral, or any rights or remedies which the Lender
or Administrator may have against any person (other than Borrower) who may now
or hereafter be primarily or secondarily liable for principal balance of the
Loans.
-22-
ARTICLE II.
THE LENDER'S COMMITMENT, BORROWING PROCEDURES AND LENDER NOTE
Section 2.1 Lender's Commitment. On the terms and
subject to the conditions set forth in this Agreement, Lender agrees to make
loans to Borrower on a revolving basis from time to time (the "LENDER'S
COMMITMENT") before the Commitment Termination Date in such amounts as may be
from time to time requested by Borrower pursuant to Section 2.2; PROVIDED,
HOWEVER, that the aggregate principal amount of all Loans from time to time
outstanding hereunder shall not exceed the lesser of (a) the Facility Limit and
(b) the Borrowing Base. Within the limits of the Lender's Commitment, Borrower
may borrow and (subject to Section 4.1(a)) prepay and reborrow under this
Section 2.1.
Section 2.2 Borrowing Procedures. Borrower (or the
Servicer on its behalf) may request a Loan hereunder by giving notice to
Administrator of a proposed borrowing not later than 2:00 p.m. (New York City
time), two (2) Business Days prior to the proposed date of such borrowing (or
such lesser period of time as Lender may consent); PROVIDED that Borrower shall
not request, and Lender shall not make, Loans more than once per calendar week.
Each such notice (herein called a "BORROWING REQUEST") shall be in the form of
Exhibit A (or, if acceptable to Administrator, the information required therein
may be given by telephone) and shall include the date and amount of such
proposed borrowing. Any Borrowing Request given by Borrower (or the Servicer on
its behalf) pursuant to this Section 2.2 shall be irrevocable and binding on
Borrower. Any Borrowing Request may be delivered by facsimile transmission or
by electronic mail message attaching a portable data format or ".pdf" file
containing an image of the signed request, PROVIDED, HOWEVER, that no such
transmission or electronic mail message shall be deemed to be delivered unless
and until Borrower (or Servicer on its behalf) confirms Administrator's actual
receipt thereof by telephone.
Section 2.3 Funding. Subject to the satisfaction of the
conditions precedent set forth in Article VII with respect to such Loan and the
limitations set forth in Section 2.1, Lender shall make the proceeds of such
requested Loan available to Administrator at its office in Atlanta, Georgia in
immediately available funds on the proposed date of borrowing. Upon receipt by
Administrator of such funds, Administrator will make such funds available to
Borrower at such office on such date. Each borrowing shall be on a Business Day
and shall be in an amount of at least $1,000,000 and in integral multiples of
$500,000 (or in such other amounts as Lender or Administrator may approve).
Section 2.4 Representation and Warranty. Each request
for a borrowing pursuant to Section 2.2 shall automatically constitute a
representation and warranty by Borrower to Administrator and Lender that on the
requested date of such borrowing (a) the representations and warranties
contained in Article VIII will be true and correct in all material respects as
of such requested date as though made on such date (except any representation
and warranty which by its express terms relates to a specific date or period,
which shall be true and correct in all material respects as of such specific
date or period), (b) no Significant Event or Unmatured Significant Event has
occurred and is continuing or will result from such borrowing, and (c) after
giving effect to such requested borrowing, the aggregate principal balance of
the outstanding Loans hereunder will not exceed the lesser of the Borrowing
Base and the Facility Limit.
-23-
Section 2.5 Extension of Lender's Commitment. The
Lender's Commitment shall terminate on the Commitment Termination Date.
Notwithstanding the foregoing:
(a) Lender or Administrator, on Lender's behalf, shall
use reasonable effort to give Borrower not less than 60 days' prior
notice of any scheduled termination of the Credit Banks' commitments
under the Conduit Credit Agreement and shall promptly notify Borrower
of any extension thereof,
(b) Not more than 60 days prior to the Liquidity
Termination Date in effect from time to time, Borrower may request
that Lender or Administrator, on Lender's behalf, seek the Liquidity
Banks' consent to extend the Liquidity Termination Date for a period
which, when aggregated with the number of days remaining until the
existing Liquidity Termination Date would not cause the Liquidity
Banks' commitments under the Liquidity Agreement as so extended to
exceed 364 days in toto, and
(c) Not more than 60 days prior to the Scheduled
Commitment Termination Date in effect from time to time, Borrower may
request that Lender consent to extend the Scheduled Commitment
Termination Date for an additional 364-day period.
Administrator shall advise Borrower in writing whether each request made
pursuant to the foregoing clause (b) or clause (c) has been granted within
thirty (30) days after such request has been made and whether such consent is
subject to satisfaction of any conditions precedent. If any such request is not
granted within thirty (30) days after such request has been made, the Liquidity
Termination Date or Scheduled Commitment Termination Date, as the case may be,
shall remain unchanged. If any such request is granted within thirty (30) days
after such request has been made, the Liquidity Termination Date or Scheduled
Commitment Termination Date, as the case may be, shall be extended as provided
in Administrator's written notice upon satisfaction of any conditions precedent
specified therein (including, without limitation, payment of the Extension
Fee).
Section 2.6 Voluntary Termination of Lender's
Commitment; Reduction of Facility Limit. Borrower may, in its sole discretion
for any reason upon at least 10 days' notice to Administrator (with a copy to
Lender), terminate the Lender's Commitment in whole, or, reduce in part the
unused portion of the Facility Limit; PROVIDED, HOWEVER that (a) each such
partial reduction will be in a minimum amount of $5,000,000 or a higher
integral multiple of $1,000,000 and shall not reduce the Facility Limit below
$40,000,000, and (b) in connection therewith Borrower shall comply with Section
3.2(b) and Section 4.1(b).
Section 2.7 Note. Each Loan from Lender shall be
evidenced by a single promissory grid note (herein, as amended, modified,
extended or replaced from time to time, called the "LENDER NOTE") substantially
in the form set forth in Exhibit B, with appropriate insertions, payable to the
order of Lender. Borrower hereby irrevocably authorizes Administrator in
connection with the Lender Note to make (or cause to be made) appropriate
notations on the grid attached to the Lender Note (or on any continuation of
such grid, or at Administrator's option, in its records), which notations, if
made, shall evidence, inter alia, the
-24-
date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby. Such notations shall be
rebuttably presumptive evidence of the subject matter thereof, absent manifest
error; PROVIDED, HOWEVER, that the failure to make any such notations shall not
limit or otherwise affect any Obligations of Borrower.
ARTICLE III.
INTEREST, FEES, ETC.
Section 3.1 Interest Rates. Each Loan (or portion
thereof) shall accrue interest on the unpaid principal amount thereof for the
period commencing on the date of such Loan until such Loan is paid in full, as
follows:
(a) at all times while the making or maintenance of such
Loan (or the applicable portion thereof) by Lender is funded by the
issuance of Commercial Paper Notes of Lender, during each Interest
Period, at a rate per annum equal to the sum of (i) the Commercial
Paper Rate applicable to such Interest Period, plus (ii) the
Applicable Margin;
(b) at all times while the making or maintenance of such
Loan (or the applicable portion thereof) by Lender is funded during
each Interest Period pursuant to the Liquidity Agreement or the
Voluntary Advance Agreement, at a rate per annum equal to the sum of
(i) the Alternative Rate applicable to such Interest Period, plus (ii)
the Applicable Margin; and
(c) notwithstanding the provisions of the preceding
clauses (a) and (b), in the event that a Significant Event has
occurred and is continuing, at a rate per annum (the "DEFAULT RATE")
equal to the Base Rate applicable from time to time (but not less than
the interest rate in effect for such Loan as at the date of such
Significant Event), plus a margin of 2.00%. After the date any
principal amount of any Loan is due and payable (whether on the
Scheduled Commitment Termination Date, upon acceleration or otherwise)
or after any other monetary Obligation of Borrower arising under this
Agreement shall become due and payable, Borrower shall pay (to the
extent permitted by law, if in respect of any unpaid amounts
representing interest) interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Default Rate. No
provision of this Agreement or the Lender Note shall require the
payment or permit the collection of interest in excess of the maximum
permitted by applicable law.
Section 3.2 Interest Payment Dates. Interest accrued on
each Allocation shall be payable, without duplication:
(a) on each Scheduled Interest Payment Date prior to the
Scheduled Commitment Termination Date, for the period since the
creation of such Allocation (in the case of the first Scheduled
Interest Payment Date thereafter) or since the prior Scheduled
Interest Payment Date (in the case of any subsequent Scheduled
Interest Payment Date);
-25-
(b) on the date of any payment or prepayment (in whole
or in part) of principal outstanding in such Allocation, on the amount
paid or prepaid (it being understood that any prepayment shall be
accompanied by any amounts owing under Section 6.2);
(c) in full, on the Scheduled Commitment Termination
Date (whether at scheduled maturity or upon acceleration thereof
pursuant to Section 10.3); and
(d) from and after the Scheduled Commitment Termination
Date, upon demand.
Section 3.3 Interest Allocations. Administrator shall
from time to time and in its sole discretion determine whether interest in
respect of the Loans then outstanding, or any portion thereof, shall be
calculated by reference to the Commercial Paper Rate (such portion being herein
called a "CP ALLOCATION") or an Alternative Rate (such portion being herein
called an "ALTERNATIVE RATE ALLOCATION", and together with a CP Allocation
individually called an "ALLOCATION", and collectively, "ALLOCATIONS");
PROVIDED, HOWEVER, that, Administrator shall use its reasonable efforts to
allocate all or substantially all of the Loans from Lender to a CP Allocation
(it being understood that if Lender is not able to issue sufficient Commercial
Paper Notes to fund all of its assets at such time and no Significant Event or
Unmatured Significant Event has occurred and is continuing, Lender and
Administrator shall, at least, fund the Loans pro rata with its other
non-defaulted assets with Commercial Paper Notes); PROVIDED FURTHER, HOWEVER,
that Administrator may determine, at any time and in its sole discretion, that
the Commercial Paper Rate is unavailable or otherwise not desirable, in which
case the Loans from Lender will be allocated to an Alternative Rate Allocation
(unless the Default Rate is in effect).
Section 3.4 Fees. Administrator and Lender shall be
entitled to payment of certain Fees in the amounts and on the dates set forth
in the letter agreement executed in connection herewith between Borrower,
Administrator and Lender (as the same may be amended, supplemented, restated or
otherwise modified, the "FEE LETTER").
Section 3.5 Computation of Interest and Fees. All
interest, Fees and Servicing Fees shall be computed on the basis of the actual
number of days (including the first day but excluding the last day) occurring
during the period for which such interest, Fee or Servicing Fee is payable over
a year comprised of 360 days.
ARTICLE IV.
REPAYMENTS AND PREPAYMENTS; DISTRIBUTION OF COLLECTIONS
Section 4.1 Repayments and Prepayments. Borrower shall
repay in full the unpaid principal amount of each Loan on the Scheduled
Commitment Termination Date. Prior thereto Borrower:
(a) may, from time to time on any Business Day, make a
prepayment, in whole or in part, of the outstanding principal amount
of any Loans; PROVIDED, HOWEVER, that, (i) unless otherwise consented
to by Administrator, all such voluntary prepayments shall require at
least two (2) Business Days' (or, in the case of a voluntary
prepayment of $10,000,000 or more, at least seven (7)
-26-
Business Days') prior written notice to Administrator, and (ii) unless
otherwise consented to by Administrator, all such voluntary partial
prepayments shall be in a minimum amount of $1,000,000 and an integral
multiple of $500,000;
(b) shall, on each date when any reduction in the
Facility Limit shall become effective pursuant to Section 2.6, make a
prepayment of the Loans in an amount equal to the excess, if any, of
the aggregate outstanding principal amount of the Loans over the
Facility Limit as so reduced;
(c) shall, immediately upon any acceleration of the
Scheduled Commitment Termination Date of any Loans pursuant to Section
10.3, repay all Loans, unless, pursuant to Section 10.3(a), only a
portion of all Loans is so accelerated, in which event Borrower shall
repay the accelerated portion of the Loans; and
(d) shall, immediately upon discovering that a Borrowing
Base Deficit exists, make a prepayment of the Loans in an amount equal
to such Borrowing Base Deficit.
Each such prepayment shall be subject to the payment of any amounts required by
Section 6.2.
Section 4.2 Application of Collections.
(a) All Collections shall be distributed by the Servicer
at such times and in the order of priority set forth in this Section
4.2.
(b) On each Distribution Date prior to the Commitment
Termination Date, the Servicer shall distribute from Collections on
such Distribution Date, if any, the following amounts, without
duplication in the following order of priority:
FIRST, to the extent due and owing under this Agreement or
any other Transaction Document, the accrued Servicing Fee payable for
the prior Calculation Period (plus, if applicable, the amount of
Servicing Fee payable for any prior Calculation Period to the extent
such amount has not been distributed to Servicer);
SECOND, interest accrued on the Loans during the period from
the most recent Distribution Date to the current Distribution Date
(plus, if applicable, the amount of interest on the Loans accrued for
any prior period to the extent such amount has not been paid, and to
the extent permitted by law, interest thereon);
THIRD, to the extent due and owing under any Transaction
Document, all Fees accrued during the prior Calculation Period (plus,
if applicable, the amount of Fees accrued for any prior Calculation
Period to the extent such amount has not been distributed to Lender or
Administrator);
FOURTH, as a repayment of principal of the Loans, an amount
equal to the Borrowing Base Deficit, if any;
-27-
FIFTH, to the extent due and owing under this Agreement or
any other Transaction Document on such Distribution Date, all other
Obligations owed to any Secured Party; and
SIXTH, the balance, if any, to Borrower.
(c) On each Distribution Date from and after the
Commitment Termination Date, the Servicer shall distribute from
Collections, if any, on such Distribution Date the following amounts,
without duplication in the following order of priority:
FIRST, the accrued but unpaid Servicing Fee due and owing on
such Distribution Date;
SECOND, all other Obligations due and owing on such
Distribution Date; and
THIRD, once all amounts described in clauses FIRST and SECOND
above have been paid in full, the balance, if any, to Borrower.
Section 4.3 Application of Certain Payments. Each
payment of principal of the Loans shall be applied to such Loans as Borrower
shall direct or, in the absence of such notice or during the existence of a
Significant Event or after the Commitment Termination Date, as Administrator
shall determine in its discretion.
Section 4.4 Due Date Extension. If any payment of
principal or interest with respect to any Loan falls due on a day which is not
a Business Day, then such due date shall be extended to the next following
Business Day, and additional interest shall accrue at the applicable interest
rate and be payable for the period of such extension.
Section 4.5 Making of Payments. All payments of
principal of, or interest on, the Loans and of all Fees, and all amounts to be
deposited by Borrower or Servicer hereunder, shall be made by Borrower or
Servicer, as applicable, no later than 12:00 noon (New York City time), on the
day when due by wire transfer in immediately available funds to Account No.
880171236 at Bank (the "ADMINISTRATOR'S ACCOUNT"), ABA No. 000000000,
Reference: Three Pillars Funding Corporation/Interface Securitization
Corporation Transaction, Attention: Xxxxxx Xxxxxx. Funds received by
Administrator after 12:00 noon (New York City time), on the date when due, will
be deemed to have been received by Administrator on its next following Business
Day.
-28-
ARTICLE V.
SECURITY INTEREST
Section 5.1 Grant of Security.
(a) Borrower hereby assigns and pledges to Administrator
(for the benefit of the Secured Parties), and hereby grants to Administrator
(for the benefit of the Secured Parties) a security interest in all of
Borrower's right, title and interest in and to the following, whether now or
hereafter existing and wherever located:
(i) all Receivables, Collections, Related Security and
Receivable Files;
(ii) all of Borrower's rights, remedies, powers and
privileges in respect of the Receivables Transfer Agreement and the
Receivables Sale Agreement, including, without limitation, its rights
to receive Purchase Price Credits and indemnity payments thereunder;
(iii) the LockBox Accounts and all funds on deposit
therein, together with all certificates and instruments, if any, from
time to time evidencing such accounts and funds on deposit; and
(iv) all products and proceeds (including, without
limitation, insurance proceeds) of, and additions, improvements and
accessions to, and books and records describing or used in connection
with, all and any of the property described above (items (i) through
(iv) are collectively referred to as the "COLLATERAL").
(b) This grant of security secures the payment and
performance of all Obligations of Borrower now or hereafter existing or arising
under, or in connection with, this Loan Agreement, the Lender Note and each
other Transaction Document, whether for principal, interest, costs, Fees,
Indemnified Amounts, expenses or otherwise (all such Obligations of Borrower
being called the "OBLIGATIONS").
(c) This grant of security shall create a continuing
security interest in the Collateral and shall:
(i) remain in full force and effect until
Administrator's (for the benefit of the Secured Parties) interest in
the Collateral shall have been released in accordance with Section
5.4;
(ii) be binding upon Borrower, its successors,
transferees and assigns; and
(iii) inure, together with the rights and remedies of
Administrator (for the benefit of the Secured Parties) hereunder, to
the benefit of Administrator and each Secured Party and their
respective successors, transferees and assigns.
Section 5.2 Administrator Appointed Attorney-in-Fact.
Borrower hereby irrevocably appoints Administrator (for the benefit of the
Secured Parties) as Borrower's
-29-
attorney-in-fact, with full authority in the place and stead of Borrower and in
the name of Borrower or otherwise, from time to time in Administrator's
discretion, after the occurrence and during the continuation of a Significant
Event to take any action and to execute any instrument which Administrator may
deem necessary or advisable to accomplish the purposes of the Transaction
Documents, including, without limitation:
(a) to ask, demand, collect, xxx for, recover,
compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause
(a) above;
(c) to file any claims or take any action or institute
any proceedings which Administrator may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce
the rights of Administrator (for the benefit of the Secured Parties)
with respect to any of the Collateral;
(d) to sell, transfer, assign or otherwise deal in or
with the Collateral or any part thereof pursuant to the terms and
conditions hereunder; and
(e) to perform the affirmative obligations of Borrower
under the Transaction Documents. Administrator agrees to give Borrower
and Servicer written notice of the taking of any such action, but the
failure to give such notice shall not affect the rights, power or
authority of Administrator with respect thereto. Borrower hereby
acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section 5.2 is irrevocable and coupled with an
interest.
Section 5.3 Administrator May Perform. If Borrower
fails to perform any agreement contained herein, Administrator (for the benefit
of the Secured Parties) may itself perform, or cause performance of such
agreement, and the reasonable expenses of Administrator incurred in connection
therewith shall be payable by Borrower.
Section 5.4 Release of Collateral. Administrator's (for
the benefit of the Secured Parties) right, title and interest in the Collateral
shall be released effective on the date occurring after the Commitment
Termination Date on which all Obligations shall have been finally and fully
paid and performed (other than contingent indemnity obligations that are not
yet due and payable).
ARTICLE VI.
INCREASED COSTS, ETC.
Section 6.1 Increased Costs. If any change in
Regulation D of the Board of Governors of the Federal Reserve System, or any
Regulatory Change, in each case occurring after the date hereof:
-30-
(a) shall subject any Affected Party to any tax, duty or
other charge with respect to any Loan made or funded by it, or shall
change the basis of taxation of payments to such Affected Party of the
principal of or interest on any Loan owed to or funded by it or any
other amounts due under this Agreement in respect of any Loan made or
funded by it (except for Excluded Taxes and changes in the rate of tax
on the overall net income of such Affected Party imposed by the
jurisdiction in which such Affected Party's principal executive office
is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System, but excluding any reserve
included in the determination of interest rates pursuant to Section
3.1), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any
Affected Party;
(c) shall change the amount of capital maintained or
required or requested or directed to be maintained by any Affected
Party; or
(d) shall impose on any Affected Party any other
condition affecting any Loan made or funded by any Affected Party;
and the result of any of the foregoing is or would be to (i) increase the cost
to or to impose a cost on (I) an Affected Party funding or making or
maintaining any Loan (including extensions of credit under the Liquidity
Agreement, the Voluntary Advance Agreement or any Credit Advance, or any
commitment of such Affected Party with respect to any of the foregoing), or
(II) Administrator for continuing its or Borrower's relationship with Lender,
(ii) to reduce the amount of any sum received or receivable by an Affected
Party under this Agreement, the Lender Note, the Liquidity Agreement, the
Voluntary Advance Agreement or the Conduit Credit Agreement with respect
thereto, or (iii) in the good faith determination of such Affected Party, to
reduce the rate of return on the capital of an Affected Party as a consequence
of its obligations hereunder, or under the Liquidity Agreement, the Voluntary
Advance Agreement or Credit Agreement, or arising in connection herewith or
therewith to a level below that which such Affected Party could otherwise have
achieved, then upon written demand by Administrator on behalf of such Affected
Party after the adoption of such change in Regulation D of the Board of
Governors of the Federal Reserve System or such Regulatory Change (which demand
shall be accompanied by a written statement setting forth the basis of such
demand), Borrower shall pay to Administrator on behalf of such Affected Party
such additional amount or amounts as will (in the reasonable determination of
such Affected Party) compensate such Affected Party for such increased cost or
such reduction. Such written statement (which shall include calculations in
reasonable detail) shall, in the absence of manifest error, be rebuttably
presumptive evidence of the subject matter thereof.
Administrator and each Affected Party agrees, if requested by
Borrower, it will use reasonable efforts (subject to the overall policy
considerations of such Affected Party) to designate an alternate lending office
with respect to Loans affected by any of the matters or circumstances
prescribed above in Section 6.1 hereof in order to reduce the liability of
Borrower
-31-
or avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Affected Party as determined by such Affected Party,
which determination, if made in good faith, shall be conclusive and binding on
all parties hereto. Nothing in this Section 6.1 shall affect or postpone any of
the obligation of Borrower hereunder or any right of any Affected Party
hereunder.
Section 6.2 Funding Losses. Borrower hereby agrees that
upon demand by any Affected Party (which demand shall be accompanied by a
statement setting forth the basis for the calculations of the amount being
claimed), Borrower will indemnify such Affected Party against any net loss or
expense which such Affected Party may sustain or incur (including, without
limitation, any net loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Affected Party to fund
or maintain any Allocation made by Lender to Borrower), as reasonably
determined by such Affected Party, as a result of (a) any payment or prepayment
(including any mandatory prepayment) of any Allocation on a date other than the
last day of the Interest Period for such Allocation, or (b) any failure of
Borrower to borrow any Loan on a date specified therefor in a related Borrowing
Request. Such written statement shall, in the absence of manifest error, be
rebuttably presumptive evidence of the subject matter thereof.
Section 6.3 Withholding Taxes.
(a) All payments made by Borrower hereunder (or by
Servicer, on behalf of Borrower, hereunder) shall be made free and clear of,
and without reduction or withholding for or on account of, any present or
future Covered Taxes, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority or other taxing authority. If any
Covered Taxes are required to be withheld from any amounts payable to
Administrator or Lender, the amounts so payable to Administrator or Lender
shall be increased to the extent necessary to yield to Administrator or Lender
(after payment of all such Covered Taxes) all such amounts payable hereunder at
the rates or in the amounts specified herein. Whenever any Covered Taxes are
payable by Borrower, as promptly as possible thereafter, Borrower shall send to
Administrator for its own account or for the account of Lender, as the case may
be, a certified copy of an original official receipt received by Borrower
showing payment thereof. If Borrower fails to pay any Covered Taxes when due to
the appropriate taxing authority or fails to remit to Administrator the
required documentary evidence, Borrower shall indemnify Administrator and
Lender for such Covered Taxes and any incremental taxes that may become payable
by Administrator or Lender as a result of any such failure.
(b) At least five (5) Business Days prior to the first
date on which any payments, including discount or Fees, are payable hereunder
for the account of Lender, if Lender is not incorporated under the laws of the
United States, Lender agrees to deliver to each of Borrower and Administrator
two (2) duly completed copies of (i) United States Internal Revenue Service
Form W-8BEN or W-8ECI (or successor applicable form) certifying that such
Lender is entitled to receive payments hereunder without deduction or
withholding of any United States federal income taxes or (ii) United States
Internal Revenue Service Form W-8 or W-9 (or successor applicable form) to
establish an exemption from United States backup withholding tax. Lender shall
replace or update such forms as is necessary or appropriate to maintain any
applicable exemption or as is requested by Administrator or Borrower. If Lender
does not deliver the forms
-32-
described in this Section 6.3(b), Borrower or Administrator shall withhold
United States federal income taxes from any payments made hereunder at the
statutory rate applicable to payments made to Lender. Lender agrees to
indemnify and hold Borrower and Administrator harmless for any United States
federal income taxes, penalties, interest and other costs and losses incurred
or payable by Borrower or Administrator as a result of either (x) Lender's
failure to submit any form required to be provided pursuant to this Section
6.3(b) or (y) Borrower's or Administrator's reliance on any form that Lender
has provided pursuant to this Section 6.3(b).
(c) Administrator and each Lender agrees, if requested
by Borrower, it will use reasonable efforts (subject to the overall policy
considerations of such Person) to designate an alternate lending office with
respect to Loans affected by any of the matters or circumstances prescribed in
Section 6.3(a) hereof in order to reduce the liability of Borrower or avoid the
results provided thereunder, so long as such designation is not disadvantageous
to Administrator or such Lender, as the case may be, as determined by such
Person, which determination, if made in good faith, shall be conclusive and
binding on all parties hereto. Nothing in this Section 6.3(c) shall affect or
postpone any of the obligation of Borrower hereunder or any right of any Lender
hereunder.
(d) If a Lender or Administrator shall become aware that
it is entitled to receive a refund in respect of any Covered Taxes, it promptly
shall notify Borrower of the availability of such refund and shall promptly
after receipt of a request by Borrower, pursue or timely claim such refund at
such Borrower's expense. If any Lender or Administrator receives a refund in
respect of any Covered Taxes for which such Lender or Administrator has
received payment from Borrower hereunder, it promptly shall repay such refund
(plus interest received, if any) to Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by Borrower under this
Section 6.3 with respect to Covered Taxes giving rise to such refund), provided
that Borrower, upon the request of such Lender or Administrator, agrees to
return such refund (plus any penalties, interest or other charges required to
be paid) to such Lender or Administrator in the event such Lender or
Administrator is required to repay such refund to the relevant taxing
authority. Nothing contained in this Section 6.3(d) shall require Administrator
or any Lender to make available its tax returns (or any other information
relating to its taxes which it deems confidential).
ARTICLE VII.
CONDITIONS TO BORROWING
Section 7.1 Initial Loan. The obligation of Lender to
make the initial Loan hereunder is subject to the conditions precedent that
Administrator shall have received all of the following, each duly executed and
dated the date of such Loan (or such earlier date as shall be satisfactory to
Administrator), in form and substance satisfactory to Administrator:
7.1.1 Resolutions. Certified copies of
resolutions of the Board of Directors (or a duly constituted committee
thereof) of each of Borrower, the Servicer and each of the Originators
authorizing or ratifying the execution, delivery and performance,
respectively, of the Transaction Documents to which it is a party,
together with a certified copy of its Organizational Documents.
-33-
7.1.2 Consents, etc. Certified copies of all
documents evidencing any necessary consents and governmental approvals
(if any) with respect to the Transaction Documents.
7.1.3 Incumbency and Signatures. A certificate of
the Secretary or an Assistant Secretary of Borrower, Servicer and each
Originator certifying the names of its officer or officers authorized
to sign the Transaction Documents to which it is a party.
7.1.4 Good Standing Certificates. Good standing
certificates for Borrower, Servicer and each Originator issued as of a
recent date acceptable to Administrator by (a) the Secretary of State
of the jurisdiction of such Person's organization, and (b) the
Secretary of State of the jurisdiction where such Person's chief
executive office and principal place of business are located.
7.1.5 Financing Statements. (i) Acknowledgment
copies of proper financing statements (Form UCC-1), filed on or prior
to the date of the initial Loan, naming Borrower as debtor and
Administrator (for the benefit of the Secured Parties) as the secured
party as may be necessary or, in the opinion of Administrator,
desirable under the UCC to perfect Administrator's (for the benefit of
the Secured Parties) security interest in the Collateral, (ii)
acknowledgment copies of proper financing statements, filed on or
prior to the date of the initial Loan, naming each Originator, as
seller/debtor, Borrower as purchaser/secured party and Administrator
as assignee as may be necessary or, in the opinion of Administrator,
desirable under the UCC to perfect Borrower's ownership interest in
the Receivables, and (iii) duly authorized copies of proper Uniform
Commercial Code Form UCC-3 termination statements, if any, necessary
to release all liens and other Adverse Claims of any Person in the
Collateral granted by Borrower or any Originator.
7.1.6 Search Reports. A written search report
provided to Administrator by a search service acceptable to
Administrator listing all effective financing statements that name
Borrower or any Originator as debtor or assignor and that are filed in
the jurisdictions in which filings were made pursuant to Section 7.1.5
above and in such other jurisdictions that Administrator shall
reasonably request, together with copies of such financing statements
(none of which shall cover any Collateral or interests therein or
proceeds of any thereof), and tax and judgment lien search reports
from a Person satisfactory to Administrator showing no evidence of
such lien filed against Borrower or any Originator.
7.1.7 Fee Letter; Payment of Fees. The Fee
Letter, together with all outstanding Fees payable pursuant to the Fee
Letter.
7.1.8 Receivables Sale Agreement and Receivables
Transfer Agreement. (i) Duly executed and delivered counterparts of
each of the Receivables Sale Agreement, the Receivables Transfer
Agreement and all documents, agreements and instruments contemplated
thereby, and (ii) evidence that each of the
-34-
conditions precedent to the execution and delivery of the Receivables
Transfer Agreement and the Receivables Sale Agreement has been
satisfied to Administrator's satisfaction, and that the initial
assignments and transfers under the Receivables Transfer Agreement and
the Receivables Sale Agreement have been consummated.
7.1.9 Opinions of Counsel. Opinions of counsel to
Borrower, Servicer, and each Originator in form and substance
satisfactory to Administrator.
7.1.10 Lender Note. The Lender Note, duly executed
by Borrower.
7.1.11 Borrowing Base Certificate. A Borrowing
Base Certificate, duly executed by an officer of Servicer on
Borrower's behalf showing a calculation of the Borrowing Base as of
the date of such initial Loan.
7.1.12 Lock Box Account Agreements. The Lock Box
Agreement(s), duly executed by all of the parties thereto, with
respect to each LockBox Account (other than Excluded Deposit
Accounts).
7.1.13 Releases; Payoff Letter. (i) Releases and
termination statements duly executed by each Person, other than
Borrower, that has an interest in the Receivables; and (ii) a payoff
and estoppel letter and termination agreement from Bank One, NA (Main
Office Chicago), as Agent for the Purchasers under and as defined in
that certain Receivables Purchase Agreement dated as of December 19,
2000 among Borrower, Interface, as servicer, certain financial
institutions party thereto as purchasers (the "Original Purchasers"),
Jupiter Securitization Corporation and BankOne, NA (Main Office
Chicago), as Agent (in such capacity, the "Original Agent") (as
amended, the "Original Receivables Purchase Agreement"), pursuant to
which the Existing Agent will (x) confirm the amount (the "Payoff
Amount") necessary for Borrower to repurchase from the Original
Purchasers, as of February 12, 2003, all of their Purchaser Interests
under and as defined in the Original Receivables Purchase Agreement in
the Outstanding Balance of Receivables at such time and otherwise
satisfy all of its payment obligations to the Original Agent and the
Original Purchasers under the Original Receivables Purchase Agreement
and the related Transaction Documents (as defined in the Original
Receivables Purchase Agreement), and (y) acknowledge and agree that
upon receipt of the Payoff Amount, the Original Receivables Purchase
Agreement and the related Transaction Documents (as defined in the
Original Receivables Purchase Agreement) shall terminate and all of
the obligations of Borrower, Interface, as servicer, and the Original
Sellers (as defined in the Original Receivables Purchase Agreement)
shall terminate (other than any obligations which by their express
terms survive termination of the Original Receivables Purchase
Agreement and such Transaction Documents).
7.1.14 Intercreditor Agreement. The Intercreditor
Agreement, duly executed by the parties thereto and acknowledged by
Interface and Borrower.
-35-
7.1.15 Other. Such other documents, certificates
and opinions as Administrator may reasonably request.
Section 7.2 All Loans. The making of each Loan,
including without limitation, the initial Loan, is subject to the conditions
precedent that:
7.2.1 No Default, etc. (i) No Significant Event,
Unmatured Significant Event or Servicer Event of Default has occurred
and is continuing or will result from the making of such Loan, (ii)
the representations and warranties of Borrower contained in Article
VIII are true and correct in all material respects as of the date of
such requested Loan (except any representation and warranty which by
its express terms relates to a specific date or period, which shall be
true and correct in all material respects as of such specific date or
period), with the same effect as though made on the date of such Loan,
and (iii) after giving effect to such Loan, the aggregate unpaid
balance of the Loans will not exceed the Borrowing Base or the
Facility Limit. By making a Borrowing Request, Borrower shall be
deemed to have represented and warranted that items (i), (ii) and
(iii) in the preceding sentence are true and correct.
7.2.2 Borrowing Request, etc. Administrator shall
have received a Borrowing Request for such Loan in accordance with
Section 2.2, together with all items required to be delivered in
connection therewith.
7.2.3 Commitment Termination Date. The Commitment
Termination Date shall not have occurred.
7.2.4 Collateral Review. Administrator shall have
received the most-recent Collateral Review pursuant to Section
9.1.5(c).
7.2.5 Accounts. Each of the LockBox Accounts
shall have been transferred into Borrower's name and shall be subject
to a valid and perfected first priority security interest in favor of
Administrator for the benefit of the Secured Parties.
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES
In order to induce Lender and Administrator to enter into
this Agreement and, in the case of Lender, to make Loans hereunder, Borrower
hereby represents and warrants to Administrator and Lender as to itself as
follows, and Servicer hereby represents and warrants to Administrator and
Lender as to itself as follows:
Section 8.1 Existence and Power. Servicer is a
corporation duly organized under the laws of the State of Georgia. Borrower is
a corporation duly organized under the laws of the State of Delaware. Each of
Servicer and Borrower is validly existing and in good standing under the laws
of its state of organization and is duly qualified to do business and is in
good standing as a foreign corporation, and has and holds all power and all
governmental licenses, authorizations, consents and approvals required to carry
on its business in each jurisdiction in
-36-
which its business is conducted except where the failure to so qualify or so
hold could not reasonably be expected to have a Material Adverse Effect.
Section 8.2 Power and Authority; Due Authorization,
Execution and Delivery. The execution and delivery by each of Servicer and
Borrower of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder, and
Borrower's use of the proceeds of the Loans made hereunder, are within its
powers and authority and have been duly authorized by all necessary corporate
action on its part. This Agreement and each other Transaction Document to which
Servicer or Borrower is a party has been duly executed and delivered by
Servicer or Borrower, as the case may be.
Section 8.3 No Conflict. The execution and delivery by
each of Borrower and Servicer of this Agreement and each other Transaction
Document to which it is a party, and the performance of its obligations
hereunder and thereunder do not contravene or violate (i) its Organizational
Documents, (ii) any law, rule or regulation applicable to it, (iii) any
restrictions under any agreement, contract or instrument to which it is a party
or by which it or any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or decree binding on or affecting it or its
property, and do not result in the creation or imposition of any Adverse Claim
on its assets (except as created under the Transaction Documents) except, in
any case, where such contravention or violation could not reasonably be
expected to have a Material Adverse Effect; and no transaction contemplated
hereby requires compliance with any bulk sales act or similar law.
Section 8.4 Governmental Authorization. Other than the
filing of the financing statements required hereunder, no authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required for the due execution and delivery by
Servicer or Borrower of this Agreement and each other Transaction Document to
which it is a party and the performance of its obligations hereunder and
thereunder.
Section 8.5 Actions, Suits. Except as disclosed on
Schedule 8.5, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting Borrower, Servicer or any of Servicer's
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making or repayment of
any Loans.
Section 8.6 Binding Effect. This Agreement and each
other Transaction Document to which Interface or Borrower is a party constitute
the legal, valid and binding obligations of Interface or Borrower, as the case
may be, enforceable against it in accordance with their respective terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
Section 8.7 Accuracy of Information.
(a) All written information furnished by Borrower,
Servicer or any of their respective Affiliates for purposes of or in connection
with this Agreement, any of the other
-37-
Transaction Documents or any transaction contemplated hereby or thereby was
true and accurate in every material respect on the date such information was
stated or certified and did not contain any material misstatement of fact or
omit to state a material fact or any fact necessary to make the statements
contained therein, taken as a whole, together with all other written and verbal
information so furnished, not misleading.
(b) To the best knowledge of Borrower and Servicer, all
verbal information furnished by Borrower, Servicer or any of their respective
Affiliates for purposes of or in connection with this Agreement, any of the
other Transaction Documents or any transaction contemplated hereby or thereby
was true and accurate in every material respect on the date such information
was furnished and did not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein, taken as a whole, together with all other written and verbal
information so furnished, not misleading.
Section 8.8 Margin Regulations; Use of Proceeds.
Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Loans, directly or
indirectly, will be used for a purpose that violates, or would be inconsistent
with, Regulations T, U and X promulgated by the Federal Reserve Board from time
to time. No portion of the proceeds of any Loan hereunder will be used for a
purpose that violates, or would be inconsistent with, any other law, rule or
regulation applicable to Borrower.
Section 8.9 Good Title. Borrower (i) is the legal and
beneficial owner of the Receivables and (ii) is the legal and beneficial owner
of the Related Security with respect thereto or possesses a valid and perfected
security interest therein, in each case, free and clear of any Adverse Claim,
except Permitted Encumbrances. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect Borrower's
ownership interest in each such Receivable, its Collections and the Related
Security.
Section 8.10 Perfection. This Agreement is effective to
create a valid security interest in the Collateral favor of Administrator, for
the benefit of the Secured Parties. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC
(or any comparable law) of all appropriate jurisdictions to perfect
Administrator's security interest, for the benefit of the Secured Parties, in
the Collateral. The Collateral is free of any Adverse Claim except for
Permitted Encumbrances.
Section 8.11 Places of Business and Locations of
Records. The principal place of business and chief executive office of each of
Borrower and Servicer is located at its address referred to on Schedule 15.3 to
this Agreement (or at such other locations, notified to Administrator in
jurisdictions where all action required to perfect or maintain the perfection
of Administrator's security interest in the Collateral has been taken).
Borrower's Federal Employer Identification Number is 00-0000000, and its
Delaware organizational identification number is 2526269.
Section 8.12 Accounts. Borrower represents and warrants
that (a) Schedule 8.12 hereto is a complete and accurate listing, as of the
Closing Date, of the LockBoxes and LockBox Accounts, and (b) each of the
LockBox Accounts has been established in, or
-38-
transferred into, Borrower's name. Neither Servicer nor Borrower has granted
any interest in any LockBox or any LockBox Account to any Person other than
Administrator, and Administrator has exclusive control of the LockBox Accounts
(except for the Excluded Deposit Accounts).
Section 8.13 No Material Adverse Effect. Since December
30, 2001, no event has occurred that could reasonably be expected to have a
Material Adverse Effect.
Section 8.14 Names. The name in which Borrower has
executed this Agreement is identical to the name of Borrower as indicated on
the public record of the State of Delaware. Borrower has not used any legal
name, trade name or assumed name other than the name in which it has executed
this Agreement, except for any change in its legal name permitted under Section
9.2.3.
Section 8.15 Ownership of Borrower; No Subsidiaries. All
of the issued and outstanding equity interests of Borrower are owned
beneficially and of record by Interface, free and clear of any Adverse Claim
except in favor of the Collateral Agent. Such equity interests are validly
issued, fully paid and nonassessable, and there are no options, warrants or
other rights to acquire securities of Borrower. Borrower has no Subsidiaries.
Section 8.16 Not a Holding Company or an Investment
Company. Neither Borrower nor Servicer is a "holding company" or a "subsidiary
holding company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or any successor statute.
Neither Borrower nor Servicer is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or any successor statute.
Section 8.17 Compliance with Credit and Collection
Policy. Each of Borrower and Servicer has complied in all material respects
with the applicable Credit and Collection Policy with regard to each Receivable
and the related Contract, and has not made any change to such Credit and
Collection Policy that could reasonably be expected to have a material adverse
effect on the collectibility of any of the Receivables, except such material
change as to which Administrator has given its prior written consent.
Section 8.18 Solvency. Both before and after giving
effect to each Loan, Borrower is Solvent.
Section 8.19 Eligible Receivables. Each Receivable
included in the Borrowing Base as an Eligible Receivable as of the date of (a)
any Borrowing Base Certificate, (b) any Monthly Report or (c) the making of any
Loan, is an Eligible Receivable on such date.
Section 8.20 Sales by Originators. Each sale of
Receivables by an Original Seller to Interface shall have been effected under,
and in accordance with the terms of, the Receivables Transfer Agreement,
including the payment by Interface to the applicable Original Seller of an
amount equal to the purchase price therefor as described in the Receivables
Transfer Agreement, each sale of Receivables by Interface to Borrower shall
have been effected under, and in accordance with the terms of, the Receivables
Sale Agreement, including the payment by Borrower to Interface of an amount
equal to the purchase price therefor as described in the Receivables Sale
Agreement and each such sale shall have been made for "reasonably equivalent
-39-
value" (as such term is used under ss. 548 of the United States Bankruptcy
Code) and not for or on account of "antecedent debt" (as such term is used
under ss. 547 of the United States Bankruptcy Code) owed by Borrower to
Interface or by Interface to the applicable Original Seller, as the case may
be.
ARTICLE IX.
COVENANTS OF BORROWER AND SERVICER
Section 9.1 Affirmative Covenants. From the date hereof
until the first day, following the Commitment Termination Date, on which all
Obligations (other than contingent indemnity obligations that are not yet due
and payable) shall have been finally and fully paid and performed, each of
Borrower and Servicer hereby covenants and agrees with Lender and Administrator
that as to itself, as follows:
9.1.1 Compliance with Laws, Etc. Each of Borrower
and Servicer will comply with all applicable laws, rules, regulations
and orders of all governmental authorities (including those which
relate to the Receivables), except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
9.1.2 Preservation of Legal Existence. Each of
Borrower and Servicer will preserve and maintain its existence rights,
franchises and privileges in the jurisdiction of its organization, and
qualify and remain qualified in good standing as a foreign entity in
the jurisdiction where its principal place of business and its chief
executive office are located and in each other jurisdiction where the
failure to preserve and maintain such existence, rights, franchises,
privileges and qualifications would have a Material Adverse Effect.
9.1.3 Performance and Compliance with
Receivables. Each of Borrower and Servicer will timely and fully
perform and comply with all provisions, covenants and other promises
required to be observed by it under the Receivables and all other
agreements related to such Receivables, except where the failure to so
comply could not reasonably be expected to have a Material Adverse
Effect.
9.1.4 Credit and Collection Policy. Each of
Borrower and Servicer will comply in all material respects with the
Credit and Collection Policy.
9.1.5 Reporting Requirements. Each of Borrower
and Servicer will furnish to Administrator and Lender:
-40-
(a) Financial Statements.
(i) as soon as available, and in any event within 95
days after the end of each year, a copy of the balance sheet of
Borrower, in each case, as at the end of such year, together with the
related statement of earnings for such year, certified by the chief
executive officer, chief financial officer or controller of Borrower
(which certification shall state that such balance sheet and statement
or earnings fairly present the financial condition and results of
operations for such year in accordance with GAAP except for the
absence of footnotes), together with a certificate of such officer
stating that such officer has obtained no knowledge that a Significant
Event or Unmatured Significant Event has occurred and is continuing,
or if, in the opinion of such officer, such a Significant Event or
Unmatured Significant Event has occurred and is continuing, a
statement as to the nature thereof;
(ii) as soon as available and in any event within 95 days
after the end of each fiscal year of Interface, balance sheets of
Interface and its consolidated Subsidiaries as at the end of such
year, presented on a consolidated basis, and the related statements of
income, shareholders' equity, and cash flows of Interface and its
consolidated Subsidiaries for such fiscal year, presented on a
consolidated basis, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and
accompanied by a report thereon of BDO Xxxxxxx, LLP or other
independent public accountants of comparable recognized national
standing, which such report shall be unqualified as to going concern
and scope of audit and shall state that such financial statements
present fairly in all material respects the financial condition as at
the end of such fiscal year on a consolidated basis, and the results
of operations and statements of cash flows of Interface and its
consolidated Subsidiaries for such fiscal year in accordance with GAAP
and that the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with
generally accepted auditing standards (it being agreed that the
requirements of this subsection may be satisfied by the delivery of
the applicable annual report on Form 10-K of Interface to the
Securities and Exchange Commission to the extent that (i) it contains
the foregoing information and (ii) it is delivered within the
applicable time period noted herein and is available to the Lender on
XXXXX); and
(iii) as soon as available and in any event within 50 days
after the end of each fiscal quarter, of Interface (other than the
fourth fiscal quarter), balance sheets of Interface and its
consolidated Subsidiaries as at the end of such quarter presented on a
consolidated basis and the related statements of income, shareholders'
equity, and cash flows of Interface and its consolidated Subsidiaries
for such fiscal quarter and for the portion of Interface's fiscal year
ended at the end of such quarter, presented on a consolidated basis
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of Interface's
previous fiscal year, all in reasonable detail and certified by the
chief financial officer or principal accounting officer of Interface
that such
-41-
financial statements fairly present in all material respects the
financial condition of Interface and its consolidated Subsidiaries as
at the end of such fiscal quarter on a consolidated basis, and the
results of operations and statements of cash flows of Interface and
its consolidated Subsidiaries for such fiscal quarter and such portion
of Interface's fiscal year, in accordance with GAAP consistently
applied (subject to normal year-end audit adjustments and the absence
of certain footnotes) (it being agreed that the requirements of this
subsection may be satisfied by the delivery of the applicable
quarterly report on Form 10-Q of Interface to the Securities and
Exchange Commission to the extent that (i) it contains the foregoing
information and (ii) it is delivered within the applicable time period
noted herein and is available to the Lender on XXXXX);
(b) Borrowing Base Certificates and
Monthly Reports.
(i) On or before Tuesday of each week after the Closing
Date (or if any such day is not a Business Day, the next succeeding
Business Day), Servicer shall prepare and deliver to Administrator and
Lender a Borrowing Base Certificate as of the last Business Day of the
week then most recently ended, signed by an authorized officer of
Servicer; provided that Servicer may elect from time to time to
deliver to Administrator and Lender a Borrowing Base Certificate on a
daily basis as of the immediately preceding Business Day, signed by an
authorized officer of Servicer; and
(ii) On or before the second Business Day preceding each
Distribution Date, Servicer shall prepare and deliver to Administrator
and Lender a Monthly Report as of the last day of the month then most
recently ended, signed by an authorized officer of Servicer.
(c) Significant Events. As soon as
possible but in any event within one (1) Business Day after any
officer of Borrower or Servicer becomes aware of the occurrence of a
Significant Event or an Unmatured Significant Event, Borrower or
Servicer, as the case may be, will deliver to Administrator and Lender
an officer's certificate of Borrower setting forth details of such
event and the action that Borrower or Servicer, as the case may be,
proposes to take with respect thereto.
(d) Servicing Certificate. Servicer
shall deliver, or cause to be delivered, to Administrator, on or
before the date that is 95 days after the end of each year, an
officer's certificate signed by the president, treasurer, assistant
treasurer, chief executive officer or any vice president of Servicer,
dated as of the last day of the preceding year, stating that (a) a
review of the activities of Servicer during the preceding 12-month
period and of its performance under this Agreement has been made under
such officer's supervision and (b) to the best of such officer's
knowledge, based on such review, Servicer has fulfilled its
obligations under the Agreement throughout such year and has complied
in all material respects with the Credit and Collection Policy, or, if
there has been a
-42-
default of a material nature in the fulfillment of any such
obligation, specifying each such default known to such officer and the
nature and status thereof.
(e) Collateral Review. As soon as
possible, and in any event within 45 days after the Closing Date, and
after each semi-annual period thereafter, a report of the independent
certified public accountants of Interface (each such report, a
"COLLATERAL REVIEW") which satisfies the requirements set forth on
Schedule 9.1.5.
(f) Other. Promptly, from time to
time, such other information, documents, records or reports respecting
the Collateral, the Receivables or the condition or operations,
financial or otherwise, of Borrower or any Originator as Administrator
may from time to time reasonably request in order to protect the
interests of Administrator or Lender under or as contemplated by this
Agreement or the other Transaction Documents.
9.1.6 Use of Proceeds. Borrower will use the
proceeds of the Loans made hereunder solely in connection with (a) the
acquisition or funding of Receivables, (b) the making of Permitted
Investments, (c) to pay Borrower's expenses to the extent such
expenses do not violate the provisions of this Agreement, and (d) to
make dividends from time to time to Interface in accordance with
applicable corporate law provided that at the time of the making of
such dividend and after giving effect thereto, Borrower's Net Worth is
at least equal to the Required Capital Amount.
9.1.7 Separate Legal Entity. Borrower hereby
acknowledges that Lender and Administrator are entering into the
transactions contemplated by this Agreement and the other Transaction
Documents in reliance upon Borrower's identity as a legal entity
separate from any other Person. Therefore, from and after the date
hereof, Borrower shall take all reasonable steps to continue
Borrower's identity as a separate legal entity and to make it apparent
to third Persons that Borrower is an entity with assets and
liabilities distinct from those of any other Person, and is not a
division of any Originator or other Person. Without limiting the
generality of the foregoing and in addition to and consistent with the
covenant set forth in Section 9.1.2, Borrower shall take such actions
as shall be required in order that:
(a) Borrower will be a limited purpose corporation whose
primary activities are restricted in its certificate of incorporation
to purchasing the Receivables and Related Security and financing the
acquisition thereof, to providing (or arranging for the provision of)
services necessary for the collection of such Receivables and the
maintenance of ownership of such Receivables and the proceeds thereof,
and conducting such other activities that are incidental to and
necessary or convenient to carry out its primary activities;
(b) Not less than one member of Borrower's Board of
Directors (each, an "INDEPENDENT DIRECTOR") shall be an individual who
is not, and during the past five (5) years has not been, a director,
officer, employee or 5% beneficial owner
-43-
of the outstanding common stock of any Person or entity beneficially
owning any outstanding shares of common stock of Interface or any
Affiliate thereof; PROVIDED, HOWEVER, that an individual shall not be
deemed to be ineligible to be an Independent Director solely because
such individual serves or has served in the capacity of an
"independent director" or similar capacity for special purpose
entities formed by Interface or any of its Affiliates. The certificate
of incorporation of Borrower shall provide that (i) the Board of
Directors shall not approve, or take any other action to cause the
filing of, a voluntary bankruptcy petition with respect to Borrower
unless the Independent Directors shall approve the taking of such
action in writing prior to the taking of such action, and (ii) such
provision cannot be amended without the prior written consent of the
Independent Director;
(c) Any employee, consultant or agent of Borrower will
be compensated from funds of Borrower, as appropriate, for services
provided to Borrower;
(d) Borrower will allocate and charge fairly and
reasonably overhead expenses shared with any other Person. To the
extent, if any, that Borrower and any other Person share items of
expenses such as legal, auditing and other professional services, such
expenses will be allocated to the extent practical on the basis of
actual use or the value of services rendered, and otherwise on a basis
reasonably related to the actual use or the value of services
rendered; Borrower's operating expenses will not be paid by any other
Person except as permitted under the terms of this Agreement or
otherwise consented to by Administrator and Lender;
(e) Borrower's books and records will be maintained
separately from those of any other Person;
(f) All audited financial statements of any Person that
are consolidated to include Borrower will contain detailed notes
clearly stating that (A) all of Borrower's assets are owned by
Borrower, and (B) Borrower is a separate legal entity;
(g) Borrower's assets will be maintained in a manner
that facilitates their identification and segregation from those of
any other Person;
(h) Borrower will strictly observe corporate formalities
in its dealings with all other Persons, and funds or other assets of
Borrower will not be commingled with those of any other Person;
(i) Borrower shall not, directly or indirectly, be named
or enter into an agreement to be named, as a direct or contingent
beneficiary or loss payee, under any insurance policy with respect to
any amounts payable due to occurrences or events related to any other
Person; and
-44-
(j) Any Person that renders or otherwise furnishes
services to Borrower will be compensated thereby at market rates for
such services it renders or otherwise furnishes thereto. Borrower will
not hold itself out to be responsible for the debts of any other
Person or the decisions or actions respecting the daily business and
affairs of any other Person.
(k) Borrower shall take such other actions as are
necessary on its part to ensure that the facts and assumptions set
forth in the opinion issued by Xxxxxxxxxx Xxxxxxxx LLP, as counsel for
Borrower, in connection with the closing or initial Loan under this
Agreement and relating to substantive consolidation issues, and in the
certificates accompanying such opinion, remain true and correct in all
material respects at all times.
9.1.8 Adverse Claims on Receivables. Each of
Borrower and Servicer will, and will require each Originator to,
defend each Receivable against all claims and demands of all Persons
at any time claiming the same or any interest therein adverse to
Administrator and the Secured Parties.
9.1.9 Further Assurances. At its expense, each of
Borrower and Servicer will perform all acts and execute all documents
reasonably requested by Administrator at any time to evidence,
perfect, maintain and enforce the title or the security interest of
Administrator in the Receivables and the priority thereof. Each of
Borrower and Servicer will, at the reasonable request of
Administrator, execute and deliver financing statements relating to or
covering the Collateral and, where permitted by law, Borrower shall
authorize Administrator to file one or more financing statements
signed only by Administrator. Borrower shall, and shall cause each
Originator to, cause its computer records, master data processing
records and other books and records relating to the Receivables to be
marked, with a legend stating that the Receivables have been sold to
Borrower and that the Collateral has been pledged to Administrator for
the benefit of the Secured Parties.
9.1.10 Servicing. Servicer shall use all
reasonable measures to prevent or minimize any loss being realized on
a Receivable and shall take all reasonable steps to recover the full
amount of such loss. Borrower and Servicer shall, at their own
expense, take such steps as are necessary to maintain perfection of
any security interest created by each Receivable in the related goods
and merchandise subject thereto. Servicer shall use its commercially
reasonable efforts, consistent with prudent servicing procedures, to
repossess or otherwise convert the ownership of the goods or
merchandise securing any Receivable which becomes a Defaulted
Receivable. Servicer shall follow such practices and procedures for
servicing the Receivables as would be customary and usual for a
prudent servicer under similar circumstances, including using
reasonable efforts to realize upon any recourse to the Obligors and
selling the goods securing a Receivable at a public or private sale.
-45-
9.1.11 Inspection. Each of Borrower and Servicer
shall permit Lender, Administrator or their duly authorized
representatives, attorneys or auditors, upon reasonable prior notice,
to inspect the Receivables, the Receivable Files, Documents and the
related accounts, records and computer systems, software and programs
used or maintained by Borrower or Servicer at such times as Lender or
Administrator may reasonably request; provided, however, that (i) for
so long as no Significant Event or Unmatured Significant Event shall
have occurred and be continuing and (ii) the result of the immediately
preceding examination and/or inspection of such Person shall have been
reasonably satisfactory to Administrator or Lender, as the case may
be, (A) such examinations and/or inspections shall be limited to four
times per calendar year per Person and (B) such cost shall be born by
Borrower and Servicer not more than twice per calendar year per Person
(although in no event shall the foregoing be construed to limit
Administrator or Lender or their respective agents or representatives
to two such examinations and/or visits during such calendar year
period with respect to such each Person). Upon instructions from
Lender or Administrator, each of Borrower and Servicer shall release
any document in its possession related to any Receivables to Lender or
Administrator, as the case may be, or to the Servicer, if reasonably
requested by Lender or Administrator.
9.1.12 Cooperation. Each of Borrower and Servicer
shall provide such cooperation, information and assistance, and
prepare and supply Administrator with such data regarding the
performance by the Obligors of their obligations under the Receivables
and the performance by Borrower and Servicer of their respective
obligations under the Transaction Documents, as may be reasonably
requested by Administrator from time to time.
9.1.13 Facility. Servicer shall maintain its
facility from which it services the Receivables in its present
condition, ordinary wear and tear excepted, or such other facility of
similar quality, security and safety as Servicer may select from time
to time. Servicer shall make all property tax payments, lease payments
and all other payments with respect to such facility, except for such
payments which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves are being
maintained. Servicer shall (i) ensure that Administrator shall have
complete and unrestricted access during inspections pursuant to
Section 9.1.12 and at any time following the occurrence and
continuance of a Significant Event, at Servicer's expense, to such
facility and all computers and other systems relating to the servicing
of the Receivables and all persons employed at such facility, (ii) use
its best efforts to retain the employees based at such facility to
provide assistance to Administrator and (iii) continue to store on a
daily basis all back-up files relating to the Receivables and the
servicing of the Receivables at Servicer's facilities, or such other
storage facility of similar quality, security and safety as Servicer
may select from time to time, in the case of each of clauses (i), (ii)
and (iii) until the receipt of all Collections in respect of all
Receivables or all Receivables have been written off in accordance
with the Credit and Collection Policy.
-46-
9.1.14 Accounts. Borrower shall not maintain any
bank accounts other than the accounts described on Schedule 8.12.
Except as set forth in the last sentence of Section 11.2.3(b), neither
Borrower nor Servicer shall make, nor will either of them permit any
Originator to make, any change in its instructions to Obligors
regarding payments to be made to a LockBox. Neither Borrower nor
Servicer will, nor will either of them permit any Originator to add
any LockBox Account Bank or Lock Box Account to those listed on
Schedule 8.12 unless Administrator shall have consented thereto and
received a copy of any new duly executed LockBox Account Agreement.
Neither Borrower nor Servicer will, nor will either of them permit any
Originator to, change any LockBox Account Bank or close any LockBox or
LockBox Account (other than the Excluded Deposit Accounts) unless
Administrator shall have received at least thirty (30) days' prior
notice of such termination and (i) in the case of a closed LockBox,
all applicable Obligors have been notified to make payments to another
LockBox that clears through a LockBox Account which is subject to a
LockBox Account Agreement, or (ii) in the case of termination of a
LockBox Bank or closing of a LockBox Account, a new LockBox Account
Agreement is entered into with respect to any new or replacement
LockBox Account or LockBox Account Bank.
Section 9.2 Negative Covenants. From the date hereof
until the first day, following the Commitment Termination Date, on which all
Obligations shall have been finally and fully paid and performed (other than
contingent indemnity obligations that are not yet due and payable), each of
Borrower and Servicer hereby covenants and agrees as to itself as follows:
9.2.1 Sales, Liens, Etc. Except pursuant to, or
as contemplated by, the Transaction Documents, Borrower shall not sell
(and shall not permit Servicer, acting on Borrower's behalf to),
assign (by operation of law or otherwise) or otherwise dispose of, or
create or suffer to exist voluntarily or involuntarily any Adverse
Claims (other than Permitted Encumbrances) upon or with respect to any
of its assets, including, without limitation, the Collateral, any
interest therein or any right to receive any amount from or in respect
thereof.
9.2.2 Mergers, Acquisitions, Sales, Subsidiaries,
etc. Borrower shall not:
(a) be a party to any merger or consolidation, or
directly or indirectly purchase or otherwise acquire all or
substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, except for
Permitted Investments, or sell, transfer, assign, convey or lease any
of its property and assets (or any interest therein) other than
pursuant to, or as contemplated by, this Agreement or the other
Transaction Documents;
(b) make, incur or suffer to exist an investment in,
equity contribution to, loan or advance to, or payment obligation in
respect of the deferred purchase price of property from, any other
Person, except for Permitted Investments or pursuant to the
Transaction Documents;
-47-
(c) create any direct or indirect Subsidiary or
otherwise acquire direct or indirect ownership of any equity interests
in any other Person other than pursuant to the Transaction Documents;
or
(d) enter into any transaction with any Affiliate except
for the transactions contemplated by the Transaction Documents and
other transactions upon fair and reasonable terms materially no less
favorable to Borrower than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate.
9.2.3 Change in Business; Change in Credit and
Collection Policy. Borrower will not make any material change in the
character of its business. Neither Borrower nor Servicer will make any
material change in the Credit and Collection Policy that could
adversely affect the collectibility of any Receivable. Neither
Borrower nor Servicer will change its name unless it shall have: (i)
given Administrator at least thirty (30) days' prior written notice
thereof and (ii) delivered to Administrator all financing statements,
instruments and other documents reasonably requested by Administrator
in connection with such change.
9.2.4 Other Debt. Borrower will not incur any
Debt to any Person other than (a) pursuant to this Agreement, the
Receivables Sale Agreement or otherwise in connection with a
transaction involving Lender, Bank, any Credit Bank, any Liquidity
Bank or any other Persons providing liquidity or credit support to
Lender, and (b) the Subordinated Loans from time to time made pursuant
to Section 1.2(a) of the Receivables Sale Agreement.
9.2.5 Organizational Documents. Borrower shall
not amend its Organizational Documents in any manner that violates any
of the covenants contained in this Agreement or otherwise might result
in Borrower being substantively consolidated with Interface or any
Affiliate of Interface.
9.2.6 Jurisdiction of Organization; Location of
Records. Borrower shall not change its jurisdiction of organization or
permit the documents and records evidencing the Receivables to be
moved unless (i) Borrower or Servicer, as the case may be, shall have
given to Administrator prior written notice thereof, clearly
describing the new location, and (ii) Borrower shall have taken such
action, satisfactory to Administrator, to maintain the title or
ownership of Borrower and any security interest of Administrator in
the Collateral at all times fully perfected and in full force and
effect. Servicer shall not, in any event, move the location where it
conducts the servicing and collection of the Receivables from the
address referred to on Schedule 15.3 to this Agreement unless (i) such
address is located within the continental United States, (ii) Servicer
has given Administrator at least thirty (30) days' prior written
notice of such change and (iii) Servicer shall have delivered to
Administrator all financing statements, instruments and other
documents reasonably requested by Administrator in connection with
such change or relocation.
-48-
9.2.7 Financing Statements. Borrower shall not
execute any effective financing statement (or similar statement or
instrument of registration under the laws of any jurisdiction) or
statements relating to any Receivables other than the financing
statements described in Section 7.1.5.
9.2.8 Business Restrictions. Borrower shall not
(i) engage in any business other than the acquisition, financing and
collection of Receivables and other Collateral, (ii) engage in any
transactions or be a party to any documents, agreements or
instruments, other than the Transaction Documents and those incidental
to the purposes thereof, or (iii) incur any trade payables (other than
for professional fees incurred in the ordinary course of business) or
other liabilities not constituting Debt permitted under Section 9.2.4
if such the aggregate outstanding balance of such trade payables and
other liabilities would at any time exceed $10,700.
9.2.9 Other Agreements. Borrower will not amend,
restate, supplement, cancel, terminate or otherwise modify the
Receivables Transfer Agreement or the Receivables Sale Agreement, or
give any consent, waiver, directive or approval thereunder or waive
any default, action, omission or breach under any of the foregoing or
otherwise grant any indulgence thereunder, without (in each case) the
prior written consent of Administrator.
ARTICLE X.
SIGNIFICANT EVENTS AND THEIR EFFECT
Section 10.1 Events of Default. Each of the following
shall constitute an "EVENT OF DEFAULT" under this Agreement:
10.1.1 Non-Payment of Loans, Etc. Borrower shall
fail to make any payment when due of any principal of or interest on any Loan,
or payment of any other Obligation payable by Borrower hereunder or under the
other Transaction Documents, including, without limitation, any Fees and
Indemnified Amounts, or shall fail to make any deposit required to be made
hereunder when due and, in each of the foregoing cases, such failure shall
continue for one (1) Business Day.
10.1.2 Collateral Reporting. Borrower and Servicer
shall fail to deliver any Borrowing Base Certificate or Monthly Report within 1
Business Day after the same is due.
10.1.3 Non-Compliance with Other Provisions.
Borrower shall:
(a) fail to perform or observe any covenant contained in
Section 9.2 of this Agreement and such failure shall remain unremedied
for three (3) Business Days after the earlier to occur of (i)
Borrower's having knowledge thereof and (ii) Borrower's having
received written notice thereof from the Lender or Administrator, or
(b) fail to perform or observe any other term, covenant
or agreement contained in this Agreement or any other Transaction
Document on its part to be
-49-
performed or observed and any such failure shall remain unremedied for
thirty (30) days after the earlier to occur of (i) Borrower's having
knowledge thereof and (ii) Borrower's having received written notice
thereof from the Lender or Administrator.
10.1.4 Breach of Representations and Warranties.
Any representation, warranty, certification or statement made by
Borrower in this Agreement, any other Transaction Document to which
Borrower is a party or in any other document delivered pursuant hereto
or thereto shall prove to have been incorrect in any material respect
when made or deemed made; PROVIDED THAT the materiality threshold in
the preceding clause shall not be applicable with respect to any
representation or warranty which itself contains a materiality
threshold.
10.1.5 Bankruptcy. An Event of Bankruptcy shall
have occurred and remained continuing with respect to Borrower or
Servicer.
10.1.6 Tax and ERISA Liens. The Internal Revenue
Service shall file notice of a lien pursuant to ss. 6323 of the
Internal Revenue Code with regard to any of the assets of Borrower or
the Pension Benefit Guaranty Corporation shall file a notice of lien
pursuant to ss. 4068 of ERISA, with regard to any assets of Borrower,
and in either of the foregoing cases, such lien shall not have been
released within fifteen (15) Business Days.
Section 10.2 Amortization Events. Each of the following
shall constitute an "AMORTIZATION EVENT" under this Agreement:
10.2.1 Servicer Event of Default. A Servicer Event
of Default shall have occurred and remained continuing.
10.2.2 Borrowing Base Deficit. A Borrowing Base
Deficit shall exist and such condition shall continue unremedied for
one (1) Business Day.
10.2.3 Default Ratio. The Default Ratio shall
equal or exceed 2.86% on a rolling three-month average basis.
10.2.4 Dilution Ratio. The Dilution Ratio shall
equal or exceed 5.10% on a rolling three-month average basis.
10.2.5 Delinquency Ratio. The Delinquency Ratio
shall equal or exceed 3.90% on a rolling three-month average basis.
10.2.6 Accounts Receivable Turnover Ratio. The
Accounts Receivable Turnover Ratio shall be less than 7 to 1 for any
Calculation Period.
10.2.7 Event of Default. An Event of Default shall
have occurred and be continuing.
-50-
10.2.8 Validity of Transaction Documents. (a) Any
Transaction Document, or any lien or security interest granted
thereunder, shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally
valid, binding and enforceable obligation of Borrower, Servicer or any
Originator party to such Transaction Document, (b) Borrower, any
Originator or Servicer shall, directly or indirectly, contest in any
manner such effectiveness, validity, binding nature or enforceability
or (c) any security interest securing any Obligation shall, in whole
or in part, cease to be a perfected first priority (subject to
Permitted Encumbrances) security interest.
10.2.9 Termination Date. The "Termination Date"
under and as defined in the Receivables Sale Agreement or the
Receivables Transfer Agreement shall occur.
10.2.10 Change of Control. Interface shall cease to
own, directly or indirectly, 100% of the outstanding voting stock of
Borrower.
Section 10.3 Effect of Significant Event.
(a) Optional Termination. Upon the occurrence and during
the continuance of a Significant Event (other than an Event of Default
described in Section 10.1.5), Administrator may, and at the request of Lender
shall, by notice to Borrower (a copy of which shall be promptly forwarded by
Administrator to each Rating Agency), declare all or any portion of the
outstanding principal amount of the Loans and other Obligations to be due and
payable and/or the Lender's Commitment (if not theretofore terminated) to be
terminated by declaring the Commitment Termination Date to have occurred,
whereupon the full unpaid amount of such Loans and other Obligations which
shall be so declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment, and/or, as the case may
be, the Lender's Commitment shall terminate.
(b) Automatic Termination. Upon the occurrence of an
Event of Default described in Section 10.1.5), the Commitment Termination Date
shall be deemed to have occurred automatically, and all outstanding Loans and
all other Obligations shall become immediately and automatically due and
payable, all without presentment, demand, protest, or notice of any kind.
(c) Notice to Rating Agencies. Administrator shall
notify each Rating Agency of the occurrence of any continuing Significant
Event, promptly following its actual knowledge thereof.
ARTICLE XI.
THE SERVICER
Section 11.1 Interface as Initial Servicer. The
servicing, administering and collection of the Receivables shall be conducted
by the Person designated from time to time as Servicer under this Agreement.
Until such time following the occurrence of a Servicer Event of Default or an
Amortization Event as Administrator shall notify Interface and Borrower in
writing
-51-
of the revocation of such power and authority, Borrower, Lender and
Administrator hereby appoint Interface to act as Servicer under the Transaction
Documents.
Section 11.2 Certain Duties of the Servicer.
11.2.1 Authorization to Act as Borrower's Agent.
Borrower hereby appoints Servicer as its agent for the following
purposes: (i) selecting the amount of each requested Loan and
executing Borrowing Requests on behalf of Borrower, (ii) making
transfers among, deposits to and withdrawals from all deposit accounts
of Borrower for the purposes described in the Transaction Documents,
(iii) arranging payment by Borrower of all Fees, expenses, other
Obligations and other amounts payable under the Transaction Documents,
(iv) causing the repayment and prepayment of the Loans as required and
permitted pursuant to Section 4.1 and (v) executing and preparing the
Monthly Reports and Borrowing Base Certificates; PROVIDED, HOWEVER,
that Servicer shall act in such capacity only as an agent of Borrower
and shall incur thereby no additional obligations with respect to any
Loan, and nothing herein shall be deemed to authorize Servicer to take
any action as Borrower's agent which Borrower is precluded from taking
itself. Borrower irrevocably agrees that (A) it shall be bound by all
proper actions taken by Servicer pursuant to the preceding sentence,
and (B) Lender, Administrator and the banks holding all deposit
accounts of Borrower are entitled to accept submissions,
determinations, selections, specifications, transfers, deposits and
withdrawal requests, and payments from Servicer on behalf of Borrower.
11.2.2 Servicer to Act as Servicer.
(a) Servicer shall service and administer the
Receivables on behalf of Borrower and Administrator (for the benefit
of the Secured Parties) and shall have full power and authority,
acting alone and/or through subservicers as provided in Section
11.2.2(c), to do any and all things which it may deem reasonably
necessary or desirable in connection with such servicing and
administration and which are consistent with this Agreement.
Consistent with the terms of this Agreement, Servicer may waive,
modify or vary any term of any Receivable or consent to the
postponement of strict compliance with any such term or in any manner,
grant indulgence to any Obligor if, in Servicer's reasonable
determination, such waiver, modification, postponement or indulgence
is not materially adverse to the interests of Borrower or
Administrator (for the benefit of the Secured Parties); PROVIDED,
HOWEVER, that Servicer may not permit any modification with respect to
any Receivable that would reduce the Unpaid Balance (except for actual
payments thereof), or extend the due date thereof, except that
Servicer may take such actions with respect to Defaulted Receivables
if such actions will, in Servicer's reasonable business judgment,
maximize the Collections thereof. Without limiting the generality of
the foregoing, Servicer in its own name or in the name of Borrower is
hereby authorized and empowered by Borrower when Servicer believes it
appropriate in its best judgment to execute and deliver, on behalf of
Borrower, any and all instruments of satisfaction or
-52-
cancellation, or of partial or full release or discharge and all other
comparable instruments, with respect to the Receivables.
(b) Servicer shall service and administer the
Receivables by employing such procedures (including collection
procedures) and degree of care, in each case consistent with
applicable law, with the Credit and Collection Policy and with prudent
industry standards, as are customarily employed by Servicer in
servicing and administering receivables owned or serviced by Servicer
comparable to the Receivables. Servicer shall not take any action to
impair Administrator's (for the benefit of the Secured Parties)
security interest in any Receivable, except to the extent allowed
pursuant to this Agreement or required by law.
(c) Servicer may perform any of its duties pursuant to
this Agreement, including those delegated to it pursuant to this
Agreement, through subservicers appointed by Servicer, PROVIDED that
such subservicing arrangements may be terminated, at Administrator's
discretion, upon the replacement of Interface as Servicer. Such
subservicers may include Affiliates of Servicer. Notwithstanding any
such delegation of a duty, Servicer shall remain obligated and liable
for the performance of such duty as if Servicer were performing such
duty.
(d) Servicer may take such actions as are necessary to
discharge its duties as Servicer in accordance with this Agreement,
including the power to execute and deliver on behalf of Borrower such
instruments and documents as may be customary, necessary or desirable
in connection with the performance of Servicer's duties under this
Agreement (including consents, waivers and discharges relating to the
Receivables).
(e) Servicer shall keep separate records covering the
transactions contemplated by this Agreement, including the identity
and collection status of each Receivable purchased by Borrower from
any Originator and the Purchase Price Credits.
11.2.3 Collections.
(a) On or prior to the Closing Date, Borrower and
Servicer shall have established and shall maintain thereafter the
following system of collecting and processing Collections of
Receivables: The Obligors shall be instructed to make payments of
Receivables only (i) by check, draft or money order mailed to a
LockBox listed on Schedule 8.12 (such payments, upon receipt in such a
LockBox, being referred to herein as "MAIL PAYMENTS"), (ii) by wire
transfer or ACH to a LockBox Account which is subject to a LockBox
Agreement, or (iii) by cash, check, draft or money order delivered to
an Originator and deposited to a LockBox or LockBox Account which is
subject to a LockBox Account Agreement ) (A) within two (2) Business
Days following receipt thereof, if no Termination Event or Significant
Event has occurred and is continuing, and (B) immediately following
receipt thereof, if any Termination Event or Significant Event has
occurred and is continuing.
-53-
(b) On or prior to the Closing Date, Administrator shall
have received a LockBox Agreement with respect to each LockBox Account
(other than Excluded Deposit Accounts). The Administrator is
authorized at any time after the occurrence and during the continuance
of a Significant Event to deliver to the Collection Banks the
Activation Notices. Borrower hereby transfers to the Agent for the
benefit of the Lender, effective when the Agent delivers such notice,
the exclusive ownership and control of each Lock-Box and the
Collection Accounts. (other than the Excluded Deposit Accounts). In
addition, after the occurrence and during the continuance of any
Significant Event, Servicer agrees that it shall, upon the written
request of the Administrator, notify all Obligors under Receivables to
make payment thereof to (i) one or more bank accounts and/or
post-office boxes designated by the Administrator and specified in
such notice or (ii) any successor Servicer appointed hereunder.
(c) Servicer shall remove all Mail Payments, or cause
all Mail Payments to be removed, from each LockBox by the close of
business on each Business Day and deposited into a LockBox Account
which is subject to a LockBox Agreement; PROVIDED, HOWEVER, that
Servicer shall cause all Mail Payments from a LockBox constituting an
Excluded Deposit Account to be deposited into a LockBox Account which
is subject to a LockBox Agreement (i) on each Business Day, to the
extent that the aggregate amount of Mail Payments from such LockBox
exceeds $250,000 at such time, and (ii) on or before the last Business
Day of each week, to the extent that the aggregate amount of Mail
Payments from such LockBox does not exceed $250,000. Servicer shall
process all such Mail Payments, and all other payments received in any
form on the date received by recording the amount of the payment
received from the Obligor and the applicable account or invoice
number.
(d) All Collections received by any Originator or
Servicer in respect of Receivables will, pending remittance to
Administrator, be held by any Originator or Servicer in trust for the
exclusive benefit of Administrator, and shall not be commingled with
any other funds or property of any Originator or Servicer.
(e) Borrower and Servicer hereby irrevocably waive any
right to set-off or otherwise deduct any amount owing by or to them
from any Collections received by them prior to remittance thereof in
accordance with this Agreement.
(f) In performing its duties and obligations hereunder,
Servicer (i) shall not impair the rights of Borrower or Administrator
in any Receivable, (ii) shall not amend the terms of any Receivable
other than in accordance with the Credit and Collection Policy and
this Agreement, (iii) shall not release any goods securing a
Receivable from the lien created by such Receivable except as
specifically provided for herein, and (iv) shall be entitled to
commence or settle any legal action to enforce collection of any
Receivable or to foreclose upon or repossess any goods securing such
Receivable. In the event that Servicer shall breach any of its
covenants set forth in clause (i), (ii) or (iii) of this Section
11.2.3(f), Servicer shall pay the Unpaid Balance of each Receivable
affected thereby on the
-54-
Distribution Date following the Calculation Period in which such event
occurs. For the purposes of Section 11.7 hereof, Servicer shall not be
deemed to have breached its obligations under this Section 11.2.3(f)
unless it shall fail to make such payment with respect to any
Receivable affected by Servicer's noncompliance with clause (i), (ii)
or (iii) of this Section 11.2.3(f).
(g) All payments or other amounts collected or received
by Servicer in respect of a Receivable shall be applied to the Unpaid
Balance of such Receivable.
Section 11.3 Servicing Compensation. Servicer, as
compensation for its activities hereunder, shall be entitled to receive the
Servicing Fee, which shall be payable by Borrower on each Distribution Date
from Collections in accordance with Section 4.2. Servicer shall be required to
pay all expenses incurred by it in connection with its servicing activities
hereunder (including payment of the fees and expenses of any subservicer) and
shall not be entitled to reimbursement therefor except as specifically provided
herein.
Section 11.4 Agreement Not to Resign. Interface
acknowledges that Lender and Administrator have relied on Interface's agreement
to act as Servicer hereunder in their respective decisions to execute and
deliver the respective Transaction Documents to which they are parties. In
recognition of the foregoing, Interface agrees not to resign as Servicer
voluntarily, except as required by law (as evidenced by the delivery of an
outside opinion of counsel to Administrator, in form and substance satisfactory
to Administrator), without the prior written consent of Administrator.
Section 11.5 Designation of Servicer. Borrower agrees
not to designate any Person other than Interface as Servicer without the prior
written consent of Administrator.
Section 11.6 Termination. The authorization of Servicer
to act on behalf of Borrower under this Agreement and the other Transaction
Documents shall terminate at the sole discretion of Administrator upon the
replacement of Servicer by a successor Servicer selected by Administrator.
Section 11.7 Servicer Events of Default. Each of the
following shall constitute a "SERVICER EVENT OF DEFAULT" under this Agreement:
11.7.1 Failure to Make Payments and Deposits.
Servicer shall fail to make any payment or deposit required to be made
by it hereunder on the date when due and, in each of the foregoing
cases, such failure shall continue for one (1) Business Day.
11.7.2 Non-Compliance with Other Provisions.
Servicer shall fail to perform or observe any other term, covenant or
agreement contained in this Agreement or any other Transaction
Document on its part to be performed or observed and any such failure
shall remain unremedied for ten (10) days.
11.7.3 Delegation. Servicer shall delegate any of
its duties hereunder, except as expressly permitted in accordance with
the terms hereof.
-55-
11.7.4 Breach of Representations and Warranties.
Any representation, warranty, certification or statement made by
Servicer in this Agreement, any other Transaction Document to which
Servicer is a party or in any Borrowing Base Certificate, Monthly
Report or other document delivered pursuant hereto or thereto shall
prove to have been incorrect in any material respect when made or
deemed made; PROVIDED THAT the materiality threshold in the preceding
clause shall not be applicable with respect to any representation or
warranty which itself contains a materiality threshold.
11.7.5 Bankruptcy. An Event of Bankruptcy shall
have occurred and remained continuing with respect to Servicer.
11.7.6 Judgments. A final judgment or judgments
for the payment of money in excess of $11,600 in the aggregate shall
have been rendered against Borrower, or in excess of $10,000,000 in
the aggregate shall have been rendered against Servicer, and the same
shall have remained unsatisfied and in effect, without stay of
execution, for a period of thirty (30) consecutive days after the
period for appellate review shall have elapsed.
11.7.7 Cross-Default to Material Debt. Failure of
Servicer to pay any Debt in excess of $10,000,000 in aggregate
principal amount ("MATERIAL DEBT") when due; or the default by
Servicer in the performance of any term, provision or condition
contained in any agreement under which any Material Debt was created
or is governed, the effect of which is to cause, or to permit the
holder or holders of such Material Debt to cause, such Debt to become
due prior to its stated maturity; or any Material Debt of Servicer
shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled payment) prior to the date of
maturity thereof.
11.7.8 Collateral Reporting. Servicer shall fail
to deliver any Borrowing Base Certificate or Monthly Report within 1
Business Day after the same is due.
At any time during the continuance of any Servicer Event of Default,
Administrator may, in its sole discretion, notify Servicer in writing of the
revocation of its appointment as Servicer hereunder. Upon revocation of
Servicer's appointment hereunder, Administrator shall appoint a successor
Servicer. Servicer agrees that upon receipt of written notification from
Administrator of the revocation of Servicer's appointment as Servicer
hereunder, Servicer shall upon the written request of Administrator (which
request may be contained in the notification of revocation) (i) notify all
Obligors under the Receivables to make payment thereof to a bank account(s) or
post office box designated by Administrator and specified in such notice, and
(ii) pay to Administrator (or its designee) immediately all Collections then
held or thereafter received by Servicer or the applicable Originator of
Receivables, together with all other payment obligations of the Servicer
hereunder owing to Lender or Administrator. Servicer shall, at its sole cost
and expense, cooperate with and assist the successor Servicer (including,
without limitation, providing access to, and transferring, all Receivable Files
and all records (including data-processing records) relating thereto (which
shall be held in trust for the benefit of the parties hereto in accordance with
their respective interests)) and allowing the successor Servicer to use
-56-
all licenses, hardware or software necessary or desirable to collect the
Receivables). Interface irrevocably agrees to act (if requested to do so) as
the data-processing agent for the successor Servicer (in substantially the same
manner as Interface conducted such data-processing functions while it acted as
Servicer).
ARTICLE XII.
ADMINISTRATOR
Section 12.1 Authorization and Action. Lender hereby
appoints SunTrust Capital Markets, Inc. as its Administrator for purposes of
the Transaction Documents and authorizes SunTrust Capital Markets, Inc. in such
capacity to take such action on its behalf under each Transaction Document and
to exercise such powers hereunder and thereunder as are delegated to SunTrust
Capital Markets, Inc., as Administrator, by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto.
Section 12.2 Administrator and Affiliates. Bank and any
of its Affiliates may generally engage in any kind of business with Borrower,
Bank, Servicer, any Obligor, any of their respective Affiliates and any Person
who may do business with or own securities of Borrower, Bank, Servicer, any
Obligor or any of their respective Affiliates, all as if SunTrust Capital
Markets, Inc. were not Administrator and without any duty to account therefor
to Lender.
ARTICLE XIII.
ASSIGNMENTS
Section 13.1 Restrictions on Assignments. Neither
Borrower nor Servicer may assign its rights hereunder or any interest herein
without the prior written consent of Administrator and Lender. Lender may not
assign all or any portion of Lender's Commitment to any Person other than the
Liquidity Bank(s) without the prior written consent of Borrower and
Administrator. Nothing herein shall be deemed to preclude Lender from pledging
or assigning all or any portion of any Loan or the Lender Note:
(a) to Credit Bank, any Liquidity Bank (or any successor
of any thereof by merger, consolidation or otherwise), any Affiliate
of Credit Bank or any Liquidity Bank in connection with a draw under
the Liquidity Agreement or a Credit Advance (which may then assign all
or any portion thereof so assigned or any interest therein to such
party or parties as it may choose); or
(b) to any other Person proposed by Lender and consented
to by Administrator and Borrower (which consent of Borrower shall not
be unreasonably withheld or delayed).
Administrator shall promptly provide notice of any assignment to each Rating
Agency. Subject to Section 13.2, all of the aforementioned assignments shall be
upon such terms and conditions as Lender and the assignee may mutually agree.
Section 13.2 Documentation. Lender shall deliver to each
assignee an assignment, in such form as Lender and the related assignee may
agree, duly executed by Lender, assigning any such Loan to the assignee, and
Lender shall promptly execute and deliver
-57-
all further instruments and documents, and take all further action, that the
assignee may reasonably request, in order to perfect, protect or more fully
evidence the assignee's right, title and interest in and to such Loan, and to
enable the assignee to exercise or enforce any rights hereunder or under the
Lender Note evidencing such Loan.
Section 13.3 Rights of Assignee. Upon the foreclosure of
any assignment of any Loans made for security purposes, or upon any other
assignment of any Loan from Lender pursuant to this Article XIII, the
respective assignee receiving such assignment shall have all of the rights of
Lender hereunder to the extent of such assignment with respect to such Loans
and all references to Lender in Section 6.1 shall be deemed to apply to such
assignee to the extent of such assignment.
Section 13.4 Notice of Assignment. Lender shall provide
notice to Borrower of any assignment hereunder by Lender to any assignee.
Lender authorizes Administrator to, and Administrator agrees that it shall,
endorse the Lender Note to reflect any assignments made pursuant to this
Article XIII or otherwise.
ARTICLE XIV.
INDEMNIFICATION
Section 14.1 General Indemnity of Borrower. Without
limiting any other rights which any such Person may have hereunder or under
applicable law, Borrower hereby agrees to indemnify Administrator, Lender,
Servicer, each Liquidity Bank, each Credit Bank, Bank, each of Bank's
Affiliates and each of their respective successors, transferees, participants
and assigns and all officers, directors, shareholders, controlling persons,
employees and agents of any of the foregoing (each of the foregoing Persons
being individually called an "INDEMNIFIED PARTY"), forthwith on demand from and
against any and all damages, losses, claims, liabilities and related reasonable
costs and expenses, including reasonable and actual attorneys' fees and
disbursements (all of the foregoing being collectively called "INDEMNIFIED
AMOUNTS") awarded against or incurred by any of them arising out of or relating
to any Transaction Document or the transactions contemplated thereby, any
commingling of funds (whether or not permitted hereunder), or the use of
proceeds therefrom by Borrower, including (without limitation) in respect of
the funding of any Loan or in respect of any Receivable; EXCLUDING, HOWEVER,
(a) Indemnified Amounts to the extent a final judgment of a court of competent
jurisdiction holds that such Indemnified Amounts resulted from gross negligence
or willful misconduct on the part of the Indemnified Party seeking
indemnification, and (b) Excluded Taxes. Anything contained in this Section
14.1 to the contrary notwithstanding: (1) the foregoing indemnification is not
intended to, and shall not, constitute a guarantee of the collectibility or
payment of the Receivables, and (2) nothing in this Section 14.1 shall require
the Servicer to indemnify any Indemnified Party for Receivables which are not
collected, not paid or are otherwise uncollected on account of the insolvency,
bankruptcy, lack of creditworthiness or financial inability to pay of the
applicable Obligor.
Section 14.2 Indemnity of Servicer. Without limiting any
other rights which any such Person may have hereunder or under applicable law,
Interface as Servicer, hereby agrees to indemnify each Indemnified Party
forthwith on demand from and against any and all Indemnified Amounts awarded
against or incurred by any of them arising from, or related to, the
-58-
negligence or willful misconduct of Interface, the inaccuracy of any
representation or warranty of Interface, or the failure of Interface to perform
its obligations under any Transaction Document; EXCLUDING, HOWEVER, (a)
Indemnified Amounts to the extent determined by a court of competent
jurisdiction to have resulted from gross negligence or willful misconduct on
the part of such Indemnified Party, (b) Indemnified Amounts to the extent
solely due to non-payment by any Obligor of an amount due and payable with
respect to a Receivable for credit reasons, and (c) any tax upon or measured by
net income on any Indemnified Party. Anything contained in this Section 14.2 to
the contrary notwithstanding: (1) the foregoing indemnification is not intended
to, and shall not, constitute a guarantee of the collectibility or payment of
the Receivables, and (2) nothing in this Section 14.2 shall require the
Servicer to indemnify any Indemnified Party for Receivables which are not
collected, not paid or are otherwise uncollected on account of the insolvency,
bankruptcy, lack of creditworthiness or financial inability to pay of the
applicable Obligor.
ARTICLE XV.
MISCELLANEOUS
Section 15.1 No Waiver; Remedies. No failure on the part
of Lender, Administrator, any Indemnified Party or any Affected Party to
exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise by
any of them of any right, power or remedy hereunder preclude any other or
further exercise thereof, or the exercise of any other right, power or remedy.
The remedies herein provided are cumulative and not exclusive of any remedies
provided by law. Without limiting the foregoing, each of Bank, each Credit Bank
and each Liquidity Bank is hereby authorized by Borrower at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by Bank, such Credit
Bank or such Liquidity Bank to or for the credit or the account of Borrower,
now or hereafter existing under this Agreement, to Administrator, any Affected
Party, any Indemnified Party, or Lender or their respective successors and
assigns.
Section 15.2 Amendments, Etc. No amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement and
any Schedules hereto, or the Lender Note shall in any event be effective unless
the same shall be in writing and signed and delivered by (i) Borrower,
Servicer, Administrator and Lender (with respect to an amendment), or (ii)
Administrator and Lender (with respect to a waiver or consent by them) or
Servicer or Borrower (with respect to a waiver or consent by them), as the case
may be, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; PROVIDED,
HOWEVER, that no material amendment of this Agreement (other than an amendment
to extend the Scheduled Commitment Termination Date) shall be effective unless
the Lender (or Administrator on its behalf) shall have received written
confirmation by the Rating Agencies that such amendment shall not cause the
rating on the then outstanding Commercial Paper Notes to be downgraded or
withdrawn. Administrator shall provide each Rating Agency with a copy of each
amendment to or consent or waiver under this Agreement promptly following the
effective date thereof.
-59-
Section 15.3 Notices, Etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including facsimile communication) and shall be personally
delivered or sent by certified first class mail, postage prepaid, or by
facsimile, overnight courier to the intended party at the address or facsimile
number of such party set forth opposite its name on Schedule 15.3 hereto or at
such other address or facsimile number as shall be designated by such party in
a written notice to the other parties hereto. All such notices and
communications shall be effective, (a) if personally delivered, when received,
(b) if sent by certified mail, three Business Days after having been deposited
in the mail, postage prepaid, (c) if sent by overnight courier, one Business
Day after having been given to such courier, and (d) if transmitted by
facsimile, when sent, receipt confirmed by telephone or electronic means,
except that notices and communications pursuant to Section 2.2 shall not be
effective until received.
Section 15.4 Costs, Expenses and Taxes. In addition to
its obligations under Section 14.1, Borrower agrees to pay on demand:
(a) all reasonable costs and expenses incurred by
Administrator, Lender, each Liquidity Bank, each Credit Bank and
Servicer in connection with (i) the preparation, execution, delivery,
administration and enforcement of, or any breach of, this Agreement,
the Lender Note, the other Transaction Documents, the Liquidity
Agreement and, to the extent directly related to this Agreement, the
Program Documents (including any amendments or modifications of or
supplements to the Program Documents directly related to this
Agreement), including, without limitation, the reasonable and actual
fees and expenses of counsel to any of such Persons incurred in
connection therewith, (ii) the perfection of Administrator's security
interest in the Collateral, (iii) the maintenance of the LockBoxes and
the LockBox Accounts, (iv) the audit of the books, records and
procedures of Originators, Servicer and Borrower by Administrator's
auditors (which may be employees of Administrator), and (v) Rating
Agency fees related to the transactions contemplated by this
Agreement; and
(b) all stamp and other transactional or filing taxes
and fees payable or determined to be payable in connection with the
execution, delivery, filing and recording of this Agreement, the
Lender Note, the other Transaction Documents, or (to the extent
directly related to this Agreement) the Program Documents, and agrees
to indemnify each Indemnified Party against any liabilities with
respect to or resulting from any delay in paying or omission to pay
such taxes and fees.
Section 15.5 Binding Effect; Survival. This Agreement
shall be binding upon and inure to the benefit of Borrower, Bank, Lender,
Administrator, and their respective successors and assigns, and the provisions
of Article VI and Article XIV shall inure to the benefit of the Affected
Parties and the Indemnified Parties, respectively, and their respective
successors and assigns; PROVIDED, HOWEVER, nothing in the foregoing shall be
deemed to authorize any assignment not permitted by Article XIII. This
Agreement shall create and constitute the continuing obligations of the parties
hereto in accordance with its terms, and shall remain in full force and effect
until such time, after the Commitment Termination Date, when all Obligations
-60-
have been finally and fully paid and performed. The rights and remedies with
respect to any breach of any representation and warranty made by Borrower or
Servicer pursuant to Article VIII and the indemnification and payment
provisions of Article XIV and Article VI, Sections 15.4, 15.11 and 15.12 shall
be continuing and shall survive any termination of this Agreement and any
termination of Interface's rights to act as Servicer hereunder or under any
other Transaction Document.
Section 15.6 Captions and Cross References. The various
captions (including, without limitation, the table of contents) in this
Agreement are provided solely for convenience of reference and shall not affect
the meaning or interpretation of any provision of this Agreement. Unless
otherwise indicated, references in this Agreement to any Section, Appendix,
Schedule or Exhibit are to such Section of or Appendix, Schedule or Exhibit to
this Agreement, as the case may be, and references in any Section, subsection,
or clause to any subsection, clause or subclause are to such subsection, clause
or subclause of such Section, subsection or clause.
Section 15.7 Severability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any
other jurisdiction.
Section 15.8 Governing Law. THIS AGREEMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF (OTHER THAN SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) EXCEPT TO THE EXTENT THAT THE
LAWS OF ANOTHER JURISDICTION GOVERN THE PERFECTION, OR THE EFFECT OF PERFECTION
OR NONPERFECTION, OF THE SECURITY INTERESTS OF THE ADMINISTRATOR, FOR THE
BENEFIT OF THE SECURED PARTIES.
Section 15.9 Counterparts. This Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original but all of which shall constitute together but one and
the same agreement.
-61-
Section 15.10 Submission to Jurisdiction; Waiver of Trial
by Jury.
(a) Each of Borrower and Servicer hereby submits to the
nonexclusive jurisdiction of any United States District Court for the
Southern District of New York and of any New York state court sitting
in New York, New York for purposes of all legal proceedings arising
out of, or relating to, the Transaction Documents or the transactions
contemplated thereby. Each of Borrower and Servicer hereby irrevocably
waives, to the fullest extent possible, any objection it may now or
hereafter have to the venue of any such proceeding and any claim that
any such proceeding has been brought in an inconvenient forum. Nothing
in this Section 15.10 shall affect the right of Administrator or
Lender to bring any action or proceeding against Borrower or Servicer
or their respective properties in the courts of other jurisdictions.
(b) TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HERETO IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF, OR IN CONNECTION
WITH, ANY TRANSACTION DOCUMENT OR ANY MATTER ARISING THEREUNDER.
Section 15.11 No Recourse Against Lender. The obligations
of the Lender under this Agreement are solely the corporate obligations of
Lender. No recourse shall be had for any obligation, covenant or agreement
(including, without limitation, the payment of any amount owing in respect to
this Agreement or the payment of any Fee hereunder or for any other obligation
or claim) arising out of or based upon this Agreement or any other agreement,
instrument or Transaction Document entered into pursuant hereto or in
connection herewith against any stockholder, employee, officer, director,
manager, administrator, partner or incorporator of Lender, as such, by the
enforcement of any assessment or by any legal or equitable proceeding, by
virtue of any statute or otherwise.
Section 15.12 No Proceedings. Each of the parties hereto
hereby agree that it will not institute against Lender, or join any other
Person in instituting against Lender, any insolvency proceeding (namely, any
proceeding of the type referred to in the definition of Event of Bankruptcy) so
long as any Commercial Paper Notes issued by Lender shall be outstanding and
there shall not have elapsed one year plus one day since the last day on which
any such Commercial Paper Notes shall be outstanding. The provisions of this
Section 15.12 shall survive the termination hereof.
-62-
Section 15.13 Confidentiality.
(a) Unless otherwise consented to by Administrator or
required by any applicable law, rule, regulation, direction, request or order
of any judicial, administrative or regulatory authority or proceedings, each of
Borrower and Servicer hereby agrees that it shall maintain and shall cause each
of its employees and officers to maintain the confidentiality of the Fee Letter
and the other confidential or proprietary information with respect to
Administrator and Lender and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that each of Borrower, Servicer and
their respective officers and employees may disclose such information to their
external accountants, attorneys and other advisors and as required by any
applicable law, rule (including, without limitation, any disclosure as a result
of the filing required filing by Interface with the Securities and Exchange
Commission of this Agreement, the Receivables Sale Agreement and the
Receivables Transfer Agreement), direction, request or order of any judicial,
administrative or regulatory authority or proceeding (whether or not having the
force or effect of law). The restrictions in this Section 15.13(a) shall not
apply to any information which is or becomes generally available to the public
other than as a result of disclosure by Borrower, Servicer or one of their
respective Affiliates.
(b) Unless otherwise agreed to in writing by the
Interface, each Lender and the Administrator hereby agrees to keep all
nonpublic information with respect to Interface and its Subsidiaries
(including, without limitation Borrower and the Original Sellers) confidential
and not to disclose or reveal any such information to any Person other than its
(or its Affiliates) directors, officers, employees, agents or representatives
who reasonably require such information in connection with their activities
concerning this Agreement or the transactions contemplated hereby and to any
the Liquidity Banks; provided, however, that the Agent or any Lender may
disclose nonpublic information: (i) to Administrator, the Liquidity Banks or
Lender by each other, (ii) as required by or pursuant to any applicable law,
rule, regulation, direction, request or order of any judicial, administrative
or regulatory authority or proceedings (whether or not having the force or
effect of law), (iii) to any prospective or actual assignee or participant of
any of the Persons described in clause (i) (but only on a confidential basis),
and (iv) to any Rating Agency, Commercial Paper Note dealer, Credit Bank or
Support Provider to Lender or any entity organized for the purpose of
purchasing, or making loans secured by, financial assets for which
Administrator acts as the administrative agent or administrator and to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, PROVIDED each Person described in the foregoing clauses (iii) and
(iv) is informed of the confidential nature of such information and, except for
any Rating Agency, has agreed in writing to be bound by the provisions of this
Section 15.13.
Section 15.14 Entire Agreement. This Agreement and the
other Transaction Documents executed and delivered herewith represent the final
agreement among the parties hereto and thereto and may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements among the parties.
[SIGNATURE PAGES BEGIN ON NEXT PAGE]
-63-
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
INTERFACE SECURITIZATION CORPORATION, AS BORROWER
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
INTERFACE, INC., AS INITIAL SERVICER
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
-64-
THREE PILLARS FUNDING CORPORATION, AS LENDER
By: /s/ Xxxxxx Xxxxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Vice President
-65-
SUNTRUST CAPITAL MARKETS, INC., AS ADMINISTRATOR
By: /s/ Xxxx Xxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
-66-
