Exhibit 10.30
RECEIVABLES PURCHASE AGREEMENT
dated as of December 19, 2000
Among
INTERFACE SECURITIZATION CORPORATION, as Seller,
INTERFACE, INC., as Servicer,
CERTAIN FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTY HERETO,
JUPITER SECURITIZATION CORPORATION
and
BANK ONE, NA (MAIN OFFICE CHICAGO)
as Agent
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE ARRANGEMENTS...........................................................Page 1
Section 1.1 Purchase Facility..................................Page 1
Section 1.2 Increases..........................................Page 1
Section 1.3 Decreases..........................................Page 2
Section 1.4 Payment Requirements...............................Page 2
ARTICLE II
PAYMENTS AND COLLECTIONS.......................................................Page 2
Section 2.1 Payments...........................................Page 2
Section 2.2 Collections Prior to Amortization..................Page 3
Section 2.3 Collections Following Amortization.................Page 3
Section 2.4 Application of Collections.........................Page 4
Section 2.5 Payment Rescission.................................Page 4
Section 2.6 Maximum Purchaser Interests........................Page 4
ARTICLE III
COMPANY FUNDING.................................................................Page 5
Section 3.1 CP Costs...........................................Page 5
Section 3.2 CP Costs Payments..................................Page 5
Section 3.3 Calculation of CP Costs............................Page 5
ARTICLE IV
FINANCIAL INSTITUTION FUNDING...................................................Page 5
Section 4.1 Financial Institution Funding......................Page 5
Section 4.2 Yield Payments.....................................Page 5
Section 4.3 Selection and Continuation of Tranche Periods......Page 5
Section 4.4 Financial Institution Discount Rates...............Page 6
Section 4.5 Suspension of the LIBO Rate........................Page 6
ARTICLE V
REPRESENTATIONS AND WARRANTIES..................................................Page 6
Section 5.1 Representations and Warranties
of the Seller Parties..............................Page 6
Section 5.2 Financial Institution Representations
and Warranties.....................................Page 9
ARTICLE VI
CONDITIONS OF PURCHASES.........................................................Page 10
Section 6.1 Conditions Precedent to Initial
Incremental Purchase...............................Page 10
Section 6.2 Conditions Precedent to All Purchases and
Reinvestments......................................Page 10
ARTICLE VII
COVENANTS........................................................................Page 11
Section 7.1 Affirmative Covenants of The Seller Parties........Page 11
Section 7.2 Negative Covenants of the Seller Parties...........Page 18
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ARTICLE VIII
ADMINISTRATION AND COLLECTION....................................................Page 19
Section 8.1 Designation of Servicer............................Page 19
Section 8.2 Duties of Servicer.................................Page 19
Section 8.3 Collection Notices.................................Page 21
Section 8.4 Responsibilities of Seller.........................Page 21
Section 8.5 Reports............................................Page 21
Section 8.6 Servicing Fees.....................................Page 21
ARTICLE IX
AMORTIZATION EVENTS..............................................................Page 21
Section 9.1 Amortization Events................................Page 21
Section 9.2 Remedies...........................................Page 23
ARTICLE X
INDEMNIFICATION..................................................................Page 24
Section 10.1 Indemnities by The Seller Parties..................Page 24
Section 10.2 Increased Cost and Reduced Return..................Page 26
Section 10.3 Other Costs and Expenses...........................Page 27
ARTICLE XI
THE AGENT........................................................................Page 27
Section 11.1 Authorization and Action...........................Page 27
Section 11.2 Delegation of Duties...............................Page 27
Section 11.3 Exculpatory Provisions.............................Page 27
Section 11.4 Reliance by Agent..................................Page 28
Section 11.5 Non-Reliance on Agent and Other Purchasers.........Page 28
Section 11.6 Reimbursement and Indemnification..................Page 28
Section 11.7 Agent in its Individual Capacity...................Page 28
Section 11.8 Successor Agent....................................Page 29
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS......................................................Page 29
Section 12.1 Assignments....................................... Page 29
Section 12.2 Participations.................................... Page 30
ARTICLE XIII
LIQUIDITY FACILITY...............................................................Page 30
Section 13.1 Transfer to Financial Institutions................ Page 30
Section 13.2 Transfer Price Reduction Yield.................... Page 30
Section 13.3 Payments to Company............................... Page 31
Section 13.4 Limitation on Commitment
to Purchase from Company.......................... Page 31
Section 13.5 Defaulting Financial Institutions................. Page 31
ARTICLE XIV
MISCELLANEOUS....................................................................Page 32
Section 14.1 Waivers and Amendments............................ Page 32
Section 14.2 Notices........................................... Page 33
Section 14.3 Ratable Payments.................................. Page 33
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Section 14.4 Protection of Ownership Interests
of the Purchasers................................. Page 34
Section 14.5 Confidentiality................................... Page 34
Section 14.6 Bankruptcy Petition............................... Page 35
Section 14.7 Limitation of Liability........................... Page 35
Section 14.8 CHOICE OF LAW..................................... Page 35
Section 14.9 CONSENT TO JURISDICTION........................... Page 35
Section 14.10 WAIVER OF JURY TRIAL.............................. Page 35
Section 14.11 Integration; Binding Effect; Survival of Terms.... Page 35
Section 14.12 Counterparts; Severability; Section References.... Page 36
Section 14.13 Bank One Roles.................................... Page 36
Section 14.14 Characterization.................................. Page 36
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Exhibits and Schedules
----------------------
Exhibit I Definitions
Exhibit II Form of Purchase Notice
Exhibit III Places of Business of the Seller Parties;
Locations of Records; Federal Employer
Identification Number(s)
Exhibit IV Names of Collection Banks; Collection Accounts
Exhibit V Form of Compliance Certificate
Exhibit VI Form of Collection Account Agreement
Exhibit VII Form of Assignment Agreement
Exhibit VIII Credit and Collection Policy
Exhibit IX [Intentionally Omitted]
Exhibit X Form of Monthly Report
Exhibit XI Form of Weekly Report
Schedule A Commitments
Schedule B Closing Documents
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POOL PURCHASE
INTERFACE SECURITIZATION CORPORATION
RECEIVABLES PURCHASE AGREEMENT
This Receivables Purchase Agreement dated as of December 19, 2000, is
among Interface Securitization Corporation, a Delaware corporation ("Seller"),
Interface, Inc., a Georgia corporation ("Interface"), as initial Servicer (the
Servicer together with Seller, the "Seller Parties" and each a "Seller Party"),
the entities listed on Schedule A to this Agreement (together with any of their
respective successors and assigns hereunder, the "Financial Institutions"),
Jupiter Securitization Corporation ("Company") and Bank One, NA (Main Office
Chicago), as agent for the Purchasers hereunder and any successor agent
hereunder (together with its successors and assigns hereunder, the "Agent").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I.
PRELIMINARY STATEMENTS
Seller desires to transfer and assign Purchaser Interests to the
Purchasers from time to time.
Company may, in its absolute and sole discretion, purchase Purchaser
Interests from Seller from time to time.
In the event that Company declines to make any purchase, the Financial
Institutions shall, at the request of Seller, purchase Purchaser Interests from
time to time. In addition, the Financial Institutions have agreed to provide a
liquidity facility to Company in accordance with the terms hereof.
Bank One, NA (Main Office Chicago) has been requested and is willing to
act as Agent on behalf of Company and the Financial Institutions in accordance
with the terms hereof.
ARTICLE I
PURCHASE ARRANGEMENTS
Section 1.1 Purchase Facility.
(a) Upon the terms and subject to the conditions hereof,
Seller may, at its option, sell and assign Purchaser Interests to the
Agent for the benefit of one or more of the Purchasers. In accordance
with the terms and conditions set forth herein, Company may, at its
option, instruct the Agent to purchase on behalf of Company, or if
Company shall decline to purchase, the Agent shall purchase, on behalf
of the Financial Institutions, Purchaser Interests from time to time in
an aggregate amount not to exceed at such time the lesser of (i) the
Purchase Limit and (ii) the aggregate amount of the Commitments during
the period from the date hereof to but not including the Facility
Termination Date.
(b) Seller may, upon at least 10 Business Days' notice to the
Agent, terminate in whole or reduce in part, ratably among the
Financial Institutions, the unused portion of the Purchase Limit;
provided that each partial reduction of the Purchase Limit shall be in
an amount equal to $5,000,000 or an integral multiple thereof.
Section 1.2 Increases.
Seller shall provide the Agent with at least two Business Days' prior
notice in a form set forth as Exhibit II hereto of each Incremental Purchase (a
"Purchase Notice"). Each Purchase Notice shall be subject to Section 6.2 hereof
and, except as set forth below, shall be irrevocable and shall specify the
requested Purchase Price (which shall not be less than $10,000,000 (or an
integral multiple thereof) in the case of the initial Incremental Purchase and
shall not be less than $500,000 (or an integral multiple thereof) in the case of
any subsequent Incremental Purchase) and date of purchase (which shall occur no
more frequently than once per calendar week) and, in the case of an Incremental
Purchase to be funded by the Financial Institutions, the requested Discount Rate
and Tranche Period. Following receipt of a Purchase Notice, the Agent will
determine whether Company agrees to make the purchase. If Company declines to
make a proposed purchase, Seller may cancel the Purchase Notice or, in the
absence of such a cancellation, the Incremental Purchase of the Purchaser
Interest will be made by the Financial Institutions. On the date of each
Incremental Purchase, upon satisfaction of the applicable conditions precedent
set forth in Article VI, Company or the Financial Institutions, as applicable,
shall deposit to the Facility Account, in immediately available funds, no later
than 12:00 noon (Chicago time), an amount equal to (i) in the case of Company,
the aggregate Purchase Price of the Purchaser Interests Company is then
purchasing or (ii) in the case of a Financial Institution, such Financial
Institution's Pro Rata Share of the aggregate Purchase Price of the Purchaser
Interests the Financial Institutions are purchasing.
Section 1.3 Decreases. Seller shall provide the Agent with at least two
(2) Business Days' prior written notice (a "Reduction Notice") of any proposed
reduction of Aggregate Capital from Collections. Such Reduction Notice shall
designate (i) the date (the "Proposed Reduction Date") upon which any such
reduction of Aggregate Capital shall occur, and (ii) the amount of Aggregate
Capital to be reduced, which reduction shall be applied (A) ratably to the
Purchaser Interests of Company and the Financial Institutions in accordance with
the amount of Capital (if any) owing to Company, on the one hand, and the amount
of Capital (if any) owing to the Financial Institutions (ratably, based on their
respective Pro Rata Shares), on the other hand or (B) as requested by Seller
with the Agent's consent, which consent may be given or withheld in Agent's sole
discretion (the "Aggregate Reduction"). Only one (1) Reduction Notice shall be
outstanding at any time. No Aggregate Reduction will be made following the
occurrence of the Amortization Date without the consent of the Agent.
Section 1.4 Payment Requirements. All amounts to be paid or deposited
by any Seller Party pursuant to any provision of this Agreement shall be paid or
deposited in accordance with the terms hereof no later than 11:00 a.m. (Chicago
time) on the day when due in immediately available funds, and if not received
before 11:00 a.m. (Chicago time) shall be deemed to be received on the next
succeeding Business Day. If such amounts are payable to a Purchaser they shall
be paid to the Agent, for the account of such Purchaser, at 1 Bank ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ until otherwise notified by the Agent. Upon notice to
Seller, the Agent may debit the Facility Account for all amounts due and payable
hereunder. All computations of Yield, per annum fees calculated as part of any
CP Costs, per annum fees hereunder and per annum fees under the Fee Letter shall
be made on the basis of a year of 360 days for the actual number of days
elapsed. If any amount hereunder shall be payable on a day that is not a
Business Day, such amount shall be payable on the next succeeding Business Day.
ARTICLE II
PAYMENTS AND COLLECTIONS
Section 2.1 Payments. Notwithstanding any limitation on recourse
contained in this Agreement, Seller shall immediately pay to the Agent when due,
for the account of the relevant Purchaser or Purchasers on a full recourse
basis, (i) such fees as set forth in the Fee Letter (which fees
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shall be sufficient to pay all fees owing to the Financial Institutions), (ii)
all CP Costs, (iii) all amounts payable as Yield, (iv) all amounts payable as
Deemed Collections (which shall be immedi ately due and payable by Seller and
applied to reduce outstanding Aggregate Capital hereunder in accordance with
Sections 2.2 and 2.3 hereof), (v) all amounts required pursuant to Section 2.6,
(vi) all amounts payable pursuant to Article X, if any, (vii) all Servicer costs
and expenses, including the Servicing Fee, in connection with servicing,
administering and collecting the Receivables, (viii) all Broken Funding Costs
and (ix) all Default Fees (collectively, the "Obligations"). If any Person fails
to pay any of the Obligations (other than the Default Fee) when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid.
Notwithstanding the foregoing, no provision of this Agreement or the Fee Letter
shall require the payment or permit the collection of any amounts hereunder in
excess of the maximum permitted by applicable law. If at any ▇▇▇▇ ▇▇▇▇▇▇
receives any Collections or is deemed to receive any Collections, Seller shall
immediately pay such Collections or Deemed Collections to the Servicer for
application in accordance with the terms and conditions hereof and, at all times
prior to such payment, such Collections or Deemed Collections shall be held in
trust by Seller for the exclusive benefit of the Purchasers and the Agent.
Section 2.2 Collections Prior to Amortization. Prior to the
Amortization Date, any Collections and/or Deemed Collections received by the
Servicer shall be set aside and held in trust by the Servicer for the payment of
any accrued and unpaid Aggregate Unpaids or for a Reinvestment as provided in
this Section 2.2. If at any time any Collections are received by the Servicer
prior to the Amortization Date, (i) the Servicer shall set aside the Termination
Percentage (hereinafter defined) of Collections evidenced by the Purchaser
Interests of each Terminating Financial Institution and (ii) Seller hereby
requests and the Purchasers (other than any Terminating Financial Institutions)
hereby agree to make, simultaneously with such receipt, a reinvestment (each a
"Reinvestment") with that portion of the balance of each and every Collection
received by the Servicer that is part of any Purchaser Interest (other than any
Purchaser Interests of Terminating Financial Institutions), such that after
giving effect to such Reinvestment, the amount of Capital of such Purchaser
Interest immediately after such receipt and corresponding Reinvestment shall be
equal to the amount of Capital immediately prior to such receipt. On each
Settlement Date prior to the occurrence of the Amortization Date, the Servicer
shall remit to the Agent's account the amounts set aside during the preceding
Settlement Period that have not been subject to a Reinvestment and apply such
amounts (if not previously paid in accordance with Section 2.1) first, to reduce
unpaid CP Costs, Yield and other Obligations and second, to reduce the Capital
of all Purchaser Interests of Terminat ing Financial Institutions, applied
ratably to each Terminating Financial Institution according to its respective
Termination Percentage. If such Capital and such CP Costs, Yield and other
Obligations shall be reduced to zero, any additional Collections received by the
Servicer (i) if applicable, shall be remitted to the Agent's account no later
than 11:00 a.m. (Chicago time) to the extent required to fund any Aggregate
Reduction on such Settlement Date and (ii) any balance remaining thereafter
shall be remitted from the Servicer to Seller on such Settlement Date. Each
Terminating Financial Institution shall be allocated a ratable portion of
Collections from the date of any assignment by Company pursuant to Section 13.6
(the "Termination Date") until such Terminating Financing Institution's Capital
shall be paid in full. This ratable portion shall be calculated on the
Termination Date of each Terminating Financial Institution as a percentage equal
to (i) Capital of such Terminating Financial Institution outstanding on its
Termination Date, divided by (ii) the Aggregate Capital outstanding on such
Termination Date (the "Termination Percentage"). Each Terminating Financial
Institution's Termination Percentage shall remain constant prior to the
Amortization Date. On and after the Amortization Date, each Termination
Percentage shall be disregarded, and each Terminating Financial Institution's
Capital shall be reduced ratably with all Financial Institutions in accordance
with Section 2.3.
Section 2.3 Collections Following Amortization. On the Amortization
Date and on each day thereafter, the Servicer shall set aside and hold in trust,
for the holder of each
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Purchaser Interest, all Collections received on such day and an additional
amount for the payment of any accrued and unpaid Obligations owed by Seller and
not previously paid by Seller in accordance with Section 2.1. On and after the
Amortization Date, the Servicer shall, at any time upon the request from time to
time by (or pursuant to standing instructions from) the Agent (i) remit to the
Agent's account the amounts set aside pursuant to the preceding sentence, and
(ii) apply such amounts to reduce the Capital associated with each such
Purchaser Interest and any other Aggregate Unpaids.
Section 2.4 Application of Collections. If there shall be insufficient
funds on deposit for the Servicer to distribute funds in payment in full of the
aforementioned amounts pursuant to Section 2.2 or 2.3 (as applicable), the
Servicer shall distribute funds:
first, to the payment of the Servicer's reasonable
out-of-pocket costs and expenses in connection with servicing,
administering and collecting the Receivables , including the Servicing
Fee, if Seller or one of its Affiliates is not then acting as the
Servicer,
second, to the reimbursement of the Agent's costs of
collection and enforcement of this Agreement,
third, ratably to the payment of all accrued and unpaid fees
under the Fee Letter, CP Costs and Yield,
fourth, (to the extent applicable) to the ratable reduction of
the Aggregate Capital (without regard to any Termination Percentage),
fifth, for the ratable payment of all other unpaid
Obligations, provided that to the extent such Obligations relate to the
payment of Servicer costs and expenses, including the Servicing Fee,
when Seller or one of its Affiliates is acting as the Servicer, such
costs and expenses will not be paid until after the payment in full of
all other Obligations, and
sixth, after the Aggregate Unpaids have been indefeasibly
reduced to zero, to Seller.
Collections applied to the payment of Aggregate Unpaids shall be
distributed in accordance with the aforementioned provisions, and, giving effect
to each of the priorities set forth in Section 2.4 above, shall be shared
ratably (within each priority) among the Agent and the Purchasers in accordance
with the amount of such Aggregate Unpaids owing to each of them in respect of
each such priority.
Section 2.5 Payment Rescission. No payment of any of the Aggregate
Unpaids shall be considered paid or applied hereunder to the extent that, at any
time, all or any portion of such payment or application is rescinded by
application of law or judicial authority, or must otherwise be returned or
refunded for any reason. Seller shall remain obligated for the amount of any
payment or application so rescinded, returned or refunded, and shall promptly
pay to the Agent (for application to the Person or Persons who suffered such
rescission, return or refund) the full amount thereof, plus the Default Fee from
the date of any such rescission, return or refunding.
Section 2.6 Maximum Purchaser Interests.
(a) Seller shall ensure that the Purchaser Interests of the
Purchasers shall at no time exceed in the aggregate 100%.
(b) If the aggregate of the Purchaser Interests of the
Purchasers exceeds 100%, Seller shall pay to the Agent within two (2)
Business Days an amount to be applied to
Page 4
reduce the Aggregate Capital (as allocated by the Agent), such that
after giving effect to such payment the aggregate of the Purchaser
Interests equals or is less than 100%.
ARTICLE III
COMPANY FUNDING
Section 3.1 CP Costs. Seller shall pay CP Costs with respect to the
Capital associated with each Purchaser Interest of Company for each day that any
Capital in respect of such Purchaser Interest is outstanding. Each Purchaser
Interest funded substantially with Pooled Commer cial Paper will accrue CP Costs
each day on a pro rata basis, based upon the percentage share the Capital in
respect of such Purchaser Interest represents in relation to all assets held by
Company and funded substantially with Pooled Commercial Paper.
Section 3.2 CP Costs Payments. On each Monthly Settlement Date, Seller
shall pay to the Agent (for the benefit of Company) an aggregate amount equal to
all accrued and unpaid CP Costs in respect of the Capital associated with all
Purchaser Interests of Company for the immediately preceding Accrual Period in
accordance with Article II.
Section 3.3 Calculation of CP Costs. On the third Business Day
immediately preceding each Monthly Settlement Date, Company shall calculate the
aggregate amount of CP Costs for the applicable Accrual Period and shall notify
Seller of such aggregate amount.
ARTICLE IV
FINANCIAL INSTITUTION FUNDING
Section 4.1 Financial Institution Funding. Each Purchaser Interest of
the Financial Institutions shall accrue Yield for each day during its Tranche
Period at either the LIBO Rate or the Prime Rate in accordance with the terms
and conditions hereof. Until Seller gives notice to the Agent of another
Discount Rate in accordance with Section 4.4, the initial Discount Rate for any
Purchaser Interest transferred to the Financial Institutions pursuant to the
terms and conditions hereof shall be the Prime Rate. If the Financial
Institutions acquire by assignment from Company any Purchaser Interest pursuant
to Article XIII, each Purchaser Interest so assigned shall each be deemed to
have a new Tranche Period commencing on the date of any such assignment.
Section 4.2 Yield Payments. On the Monthly Settlement Date for each
Purchaser Interest of the Financial Institutions, Seller shall pay to the Agent
(for the benefit of the Financial Institutions) an aggregate amount equal to the
accrued and unpaid Yield for the entire Tranche Period of each such Purchaser
Interest in accordance with Article II.
Section 4.3 Selection and Continuation of Tranche Periods.
(a) With consultation from (and approval by) the Agent, Seller
shall from time to time request Tranche Periods for the Purchaser
Interests of the Financial Institutions, provided that, if at any time
the Financial Institutions shall have a Purchaser Interest, Seller
shall always request Tranche Periods such that at least one Tranche
Period shall end on the date specified in clause (A) of the definition
of Monthly Settlement Date.
(b) Seller or the Agent, upon notice to and consent by the
other received at least three (3) Business Days prior to the end of a
Tranche Period (the "Terminating Tranche") for any Purchaser Interest,
may, effective on the last day of the Terminating Tranche: (i)
Page 5
divide any such Purchaser Interest into multiple Purchaser Interests,
(ii) combine any such Purchaser Interest with one or more other
Purchaser Interests that have a Terminating Tranche ending on the same
day as such Terminating Tranche or (iii) combine any such Purchaser
Interest with a new Purchaser Interests to be purchased on the day such
Terminating Tranche ends, provided, that in no event may a Purchaser
Interest of Company be combined with a Purchaser Interest of the
Financial Institutions.
Section 4.4 Financial Institution Discount Rates. Seller may
select the LIBO Rate or the Prime Rate for each Purchaser Interest of
the Financial Institutions. Seller shall by 11:00 a.m. (Chicago time):
(i) at least three (3) Business Days prior to the expiration of any
Terminating Tranche with respect to which the LIBO Rate is being
requested as a new Discount Rate and (ii) at least one (1) Business Day
prior to the expiration of any Terminating Tranche with respect to
which the Prime Rate is being requested as a new Discount Rate, give
the Agent irrevocable notice of the new Discount Rate for the Purchaser
Interest associated with such Terminating Tranche. Until Seller gives
notice to the Agent of another Discount Rate, the initial Discount Rate
for any Purchaser Interest transferred to the Financial Institutions
pursuant to the terms and conditions hereof shall be the Prime Rate.
Section 4.5 Suspension of the LIBO Rate. If any Financial
Institution notifies the Agent that it has determined that funding its
Pro Rata Share of the Purchaser Interests of the Financial Institutions
at a LIBO Rate would violate any applicable law, rule, regulation, or
directive of any governmental or regulatory authority, whether or not
having the force of law, or that (i) deposits of a type and maturity
appropriate to match fund its Purchaser Interests at such LIBO Rate are
not available or (ii) such LIBO Rate does not accurately reflect the
cost of acquiring or maintain ing a Purchaser Interest at such LIBO
Rate, then the Agent shall suspend the availability of such LIBO Rate
and require Seller to select the Prime Rate for any Purchaser Interest
accruing Yield at such LIBO Rate.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Representations and Warranties of the Seller Parties. Each
Seller Party hereby represents and warrants to the Agent and the Purchasers, as
to itself, as of the date hereof and as of the date of each Incremental Purchase
and the date of each Reinvestment that:
(a) Corporate Existence and Power. Such Seller Party is a
corpora tion duly organized, validly existing and in good standing
under the laws of its state of incorporation. Such Seller Party is duly
qualified to do business and is in good standing as a foreign
corporation, and has and holds all corporate power and all governmental
licenses, authorizations, consents and approvals required to carry on
its business in each jurisdiction in 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.
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Seller Party of this
Agreement and each other Transaction Document to which it is a party,
and the performance of its obligations hereunder and thereunder and, in
the case of Seller, Seller's use of the proceeds of purchases made
hereunder, are within its corporate 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 such Seller
Party is a party has been duly executed and delivered by such Seller
Party.
(c) No Conflict. The execution and delivery by such Seller
Party 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 certificate or articles
of incorporation or by-laws, (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
Page 6
it or its property, and do not result in the creation or imposition of
any Adverse Claim on assets of such Seller Party or its Subsidiaries
(except as created hereunder) 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.
(d) 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 such Seller Party of this Agreement and each other
Transaction Document to which it is a party and the performance of its
obligations hereunder and thereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Seller Party's knowledge, threatened,
against or affecting such Seller Party, or any of its properties, in or
before any court, arbitrator or other body, that could reasonably be
expected to have a Material Adverse Effect. Such Seller Party is not in
default with respect to any order of any court, arbitrator or
governmental body that could reasonably be expected to have a Material
Adverse Effect.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Seller Party is a party constitute the legal,
valid and binding obligations of such Seller Party enforceable against
such Seller Party 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).
(g) Accuracy of Information. All information heretofore
furnished by such Seller Party or any of its Affiliates to the Agent or
the Purchasers for purposes of or in connection with this Agreement,
any of the other Transaction Documents or any transaction contemplated
hereby or thereby is true and accurate in every material respect on the
date such information is stated or certified and does not contain any
material misstatement of fact or omit to state a material fact or any
fact necessary to make the statements contained therein not misleading
as of the date such information is stated or certified.
(h) Use of Proceeds. No proceeds of any purchase hereunder
will be used (i) for a purpose that violates, or would be inconsistent
with, Regulation T, U or X promulgated by the Board of Governors of the
Federal Reserve System from time to time or (ii) to acquire any
security in any transaction that is subject to Section 12, 13 or 14 of
the Securities Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to each purchase hereunder,
Seller shall be the legal and beneficial owner of the Receivables and
Related Security with respect thereto, free and clear of any Adverse
Claim, except as created by the Transaction Documents. 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 Seller's ownership interest in
each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of
the financing statements contemplated hereby, is effective to, and
shall, upon each purchase hereunder, transfer to the Agent for the
benefit of the relevant Purchaser or Purchasers (and the Agent for the
benefit of such Purchaser or Purchasers shall acquire from Seller) a
valid and perfected first priority undivided percentage ownership or
security interest in each Receivable existing or hereafter arising and
in the Related Security and Collections with respect thereto, free and
clear of any Adverse Claim, except as created by the Transactions
Page 7
Documents. 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 the Agent's
(on behalf of the Purchasers) ownership or security interest in the
Receivables, the Related Security and the Collections.
(k) Places of Business and Locations of Records. The principal
places of business and chief executive office of such Seller Party and
the offices where it keeps all of its Records are located at the
address(es) listed on Exhibit III or such other locations of which the
Agent has been notified in accordance with Section 7.2(a) in
jurisdictions where all action required by Section 14.4(a) has been
taken and completed. Seller's Federal Employer Identification Number is
correctly set forth on Exhibit III.
(l) Collections. The conditions and requirements set forth in
Section 7.1(j) and Section 8.2 have at all times been satisfied and
duly performed. The names and addresses of all Collection Banks,
together with the account numbers of the Collection Accounts of Seller
at each Collection Bank and the post office box number of each
Lock-Box, are listed on Exhibit IV. Seller has not granted any Person,
other than the Agent as contemplated by this Agreement, dominion and
control of any Lock-Box or Collection Account, or the right to take
dominion and control of any such Lock-Box or Collection Account at a
future time or upon the occurrence of a future event.
(m) Material Adverse Effect. (i) The initial Servicer
represents and warrants that since December 31, 1999, no event has
occurred that would have a material adverse effect on the financial
condition or operations of the initial Servicer and its Subsidiaries or
the ability of the initial Servicer to perform its obligations under
this Agreement, and (ii) Seller represents and warrants that since
December 31, 1999, no event has occurred that would have a material
adverse effect on (A) the financial condition or operations of Seller,
(B) the ability of Seller to perform its obligations under the
Transaction Documents, or (C) the collectibility of the Receivables
generally or of any material portion of the Receivables.
(n) Names. In the past five (5) years, Seller has not used any
corporate names, trade names or assumed names other than the name in
which it has executed this Agreement.
(o) Ownership of Seller. Interface owns, directly or
indirectly, 100% of the issued and outstanding capital stock of Seller,
free and clear of any Adverse Claim. Such capital stock is validly
issued, fully paid and nonassessable, and there are no options,
warrants or other rights to acquire securities of Seller.
(p) Not a Holding Company or an Investment Company. Such
Seller Party is not 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. Such Seller Party is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, or any
successor statute.
(q) Compliance with Law. Such Seller Party has complied in all
respects with all applicable laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject,
except, in the case of the Servicer, where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (in
cluding, without limitation, laws, rules and regulations relating to
truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy), and no
part of such Contract is in violation of any such law, rule or
regulation , except where such contravention or violation could not
reasonably be expected to have a Material Adverse Effect.
Page 8
(r) Compliance with Credit and Collection Policy. Such Seller
Party has complied in all material respects with the 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, except such material change as to which the Agent has been
notified in accordance with Section 7.1(a)(vii).
(s) Payments to Originator and Original Sellers. Each of
Originator and Seller has given reasonably equivalent value to the
Original Seller of such Receivable or Originator, as applicable, in
consideration therefor and such transfer was not made for or on account
of an antecedent debt. No transfer by any Original Seller or Originator
of any Receivable under any Existing Agreement, the Transfer Agreement
or the Receivables Sale Agreement is or may be voidable under any
section of the Bankruptcy Reform Act of 1978 (11 U.S.C. ▇▇.▇▇. 101 et
seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable is effective to create, and has created, a legal, valid
and binding obligation of the related Obligor to pay the Outstanding
Balance of the Receivable created thereunder and any accrued interest
thereon, enforceable against the Obligor in accordance with its 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).
(u) Eligible Receivables. Each Receivable included in the Net
Receivables Balance as an Eligible Receivable was an Eligible
Receivable (i) in the case of the Existing Receivables, on the date of
the initial Incremental Purchase hereunder and (ii) in the case of all
other Receivables, on the date of its purchase under the Receivables
Sale Agreement.
(v) Net Receivables Balance. Seller has determined that,
immedi ately after giving effect to each purchase hereunder, the Net
Receivables Balance is at least equal to the sum of (i) the Aggregate
Capital, plus (ii) the Aggregate Reserves.
(w) Accounting. The manner in which such Seller Party accounts
for the transactions contemplated by this Agreement, the Transfer
Agreement and the Receivables Sale Agreement does not jeopardize the
true sale analysis.
Section 5.2 Financial Institution Representations and Warranties. Each
Financial Institution hereby represents and warrants to the Agent and Company
that:
(a) Existence and Power. Such Financial Institution is a
corporation or a banking association duly organized, validly existing
and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate power to perform
its obligations hereunder.
(b) No Conflict. The execution and delivery by such Financial
Institution of this Agreement and the performance of its obligations
hereunder are within its corporate powers, have been duly authorized by
all necessary corporate action, do not contravene or violate (i) its
certificate or articles of incorporation or association or by-laws,
(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 any of its property is bound, or (iv) any order, writ,
judgment, award, injunction or
Page 9
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
where such contravention or violation could not reasonably be expected
to have a Material Adverse Effect. This Agreement has been duly
authorized, executed and delivered by such Financial Institution.
(c) Governmental Authorization. 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 such Financial Institution of this Agreement and the
performance of its obligations hereunder.
(d) Binding Effect. This Agreement constitutes the legal,
valid and binding obligation of such Financial Institution enforceable
against such Financial Institution in accordance with its 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 such enforcement is sought in a
proceeding in equity or at law).
ARTICLE VI
CONDITIONS OF PURCHASES
Section 6.1 Conditions Precedent to Initial Incremental Purchase. The
initial Incremental Purchase of a Purchaser Interest under this Agreement is
subject to the conditions precedent that (a) the Agent shall have received on or
before the date of such purchase those documents listed on Schedule B and (b)
the Agent shall have received all fees and expenses required to be paid on such
date pursuant to the terms of this Agreement and the Fee Letter.
Section 6.2 Conditions Precedent to All Purchases and Reinvestments.
Each purchase of a Purchaser Interest (other than pursuant to Section 13.1) and
each Reinvestment shall be subject to the further conditions precedent that (a)
in the case of each such purchase or Reinvestment, the Servicer shall have
delivered to the Agent on or prior to the date of such purchase, in form and
substance satisfactory to the Agent, all Weekly Reports and all Monthly Reports
as and when due under Section 8.5; (b) the Facility Termination Date shall not
have occurred; (c) the Agent shall have received such other approvals, opinions
or documents as it may reasonably request and (d) on the date of each such
Incremental Purchase or Reinvestment, the following statements shall be true
(and acceptance of the proceeds of such Incremental Purchase or Reinvestment
shall be deemed a representation and warranty by Seller that such statements are
then true):
(i) the representations and warranties set forth in
Section 5.1 are true and correct on and as of the date of such
Incremental Purchase or Reinvestment as though made on and as
of such date;
(ii) no event has occurred and is continuing, or
would result from such Incremental Purchase or Reinvestment,
that will constitute an Amortization Event, and no event has
occurred and is continuing, or would result from such
Incremental Purchase or Reinvestment, that would constitute a
Potential Amortization Event; and
(iii) the Aggregate Capital does not exceed the
Purchase Limit and the aggregate Purchaser Interests do not
exceed 100%.
It is expressly understood that each Reinvestment shall, unless otherwise
directed by the Agent or any Purchaser, occur automatically on each day that the
Servicer shall receive any Collections without the requirement that any further
action be taken on the part of any Person and notwithstanding the failure of
Seller to satisfy any of the foregoing conditions precedent in respect of such
Reinvestment. The failure of Seller to satisfy any of the foregoing conditions
precedent in respect of any Reinvestment shall give rise to a right of the
Agent, which right may be exercised at any time on demand of the Agent, to
rescind the related purchase and direct Seller to pay to the Agent for the
benefit of the Purchasers an amount equal to the Collections prior to the
Page 10
Amortization Date that shall have been applied to the affected Reinvestment.
ARTICLE VII
COVENANTS
Section 7.1 Affirmative Covenants of The Seller Parties. Until the date
on which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, as set forth below:
(a) Reporting. Such Seller Party will maintain for itself and
each of its Subsidiaries, a system of accounting established and
administered in accordance with GAAP, and furnish or cause to be
furnished to the Agent:
(i) Annual Reporting. Within 120 days after the close
of each of its respective fiscal years, (A) audited (in the
case of Interface) and unqualified, certified in a manner
reasonably acceptable to the Agent by independent public
accountants acceptable to the Agent, and (B) unaudited (in the
case of the Seller) and unqualified financial statements,
certified by the Seller's chief financial officer, for such
fiscal year (which in each case shall include balance sheets,
statements of income and retained earnings and a statement of
cash flows).
(ii) Quarterly Reporting. Within 60 days after the
close of the first three (3) quarterly periods of each of its
respective fiscal years, balance sheets of each Seller Party
as at the close of each such period and statements of income
and retained earnings and a statement of cash flows for each
such Person for the period from the beginning of such fiscal
year to the end of such quarter, all certified by its
respective chief financial officer.
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit V signed by
such Seller Party's Authorized Officer and dated the date of
such annual financial statement or such quarterly financial
statement, as the case may be.
(iv) Shareholders Statements and Reports. Promptly
upon the furnishing thereof to the shareholders of Interface
copies of all financial statements, reports and proxy
statements so furnished.
(v) S.E.C. Filings. Promptly upon the filing thereof,
copies of all registration statements and annual, quarterly,
monthly or other regular reports that Interface or any of the
Original Sellers files with the Securities and Exchange
Commission.
(vi) Copies of Notices. Promptly upon its receipt of
any notice, request for consent, financial statements,
certification, report or other communication under or in
connection with any Transaction Document from any Person other
than the Agent or Company, copies of the same.
Page 11
(vii) Change in Credit and Collection Policy. At
least thirty (30) days prior to the effectiveness of any
material change in or material amendment to the Credit and
Collection Policy, a copy of the Credit and Collection Policy
then in effect and a notice (A) indicating such change or
amend ment, and (B) if such proposed change or amendment could
reasonably be expected to adversely affect the collectibility
of the Receivables or decrease the credit quality of any newly
created Receivables, requesting the Agent's consent thereto.
(viii) Other Information. Promptly, from time to
time, such other information, documents, records or reports
relating to the Receivables or the condition or operations,
financial or otherwise, of such Seller Party as the Agent may
from time to time reasonably request in order to protect the
interests of the Agent and the Purchasers under or as
contemplated by this Agree ment.
(b) Notices. Such Seller Party will notify the Agent in
writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps
being taken with respect thereto:
(i) Amortization Events or Potential Amortization
Events. The occurrence of each Amortization Event and each
Potential Amortization Event, by a statement of an Authorized
Officer of such Seller Party.
(ii) Judgment and Proceedings. (A) The entry of any
judgment or decree against the Servicer, the Seller or any of
the Original Sellers if the entry of such judgment or decree,
either individually or together with all other judgments and
decrees then outstanding against the Servicer, the Seller and
the Original Sellers, could reasonably be expected to have a
Material Adverse Effect, (B) the entry of any judgment or
decree against the Seller or (C) the institution of any
litigation, arbitration proceeding or governmental proceeding
against any Seller Party.
(iii) Material Adverse Effect. The occur rence of any
event or condition that has had, or could reasonably be
expected to have, a Material Adverse Effect.
(iv) Termination Date. The occurrence of the
"Termination Date" under and as defined in the Receivables
Sale Agreement or the Transfer Agreement.
(v) Defaults Under Other Agreements. The occurrence
of a default or an event of default under any other financing
arrangement pursuant to which Seller is a debtor or an obligor
or the occurrence of a default or an event of default under
any material financing arrangement pursuant to which
Originator is a debtor or an obligor.
(vi) Downgrade of Interface. Any down grade in the
rating of any Indebtedness of Interface by Standard & Poor's
Ratings Group or by ▇▇▇▇▇'▇ Investors Service, Inc., setting
forth the Indebtedness affected and the nature of such change.
Page 12
(c) Compliance with Laws and Preservation of Corporate
Existence. Such Seller Party will comply in all respects with all
applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where
the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Such Seller Party will preserve and maintain
its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified in
good standing as a foreign corporation in each jurisdiction where its
business is conducted, except where the failure to so preserve and
maintain or qualify could not reasonably be expected to have a Material
Adverse Effect.
(d) Audits. Such Seller Party will furnish to the Agent from
time to time such information with respect to it and the Receivables as
the Agent may reasonably request. Such Seller Party will, from time to
time during regular business hours as requested by the Agent upon
reasonable notice and at the sole cost of the Seller (subject to the
last sentence of this sub- Section 7.1(d)), permit the Agent, or its
agents or representatives (and shall cause Originator and each Original
Seller to permit the Agent or its agents or representatives), (i) to
examine and make copies of and abstracts from all Records in the
possession or under the control of such Person relating to the
Receivables and the Related Security, including, without limitation,
the related Contracts, and (ii) to visit the offices and properties of
such Person for the purpose of examining such materials described in
clause (i) above, and to discuss matters relating to such Person's
financial condition or the Receivables and the Related Security or any
Person's performance under any of the Transaction Documents or any
Person's performance under the Contracts and, in each case, with any of
the officers or employees of Seller or the Servicer having knowledge of
such matters. All such examina tions and visits shall be at the sole
cost of the Seller; provided, however, that (i) for so long as no
Amortization Event or Potential Amortization Event shall have occurred
and be continuing and (ii) the result of the immediately preceding
examination and/or visit of such Person shall have been reasonably
satisfactory to the Agent, (A) such examinations and/or visits shall be
limited to four times per calendar year per Person and (B) such cost
shall be borne by the Seller not more than once per calendar year per
Person (although in no event shall the foregoing be construed to limit
the Agent or its agents or representatives to one such examination
and/or visit during such calendar year period with respect to each such
Person); provided, further, that the Agent will use reasonable efforts
to coordinate and conduct such examinations and/or visits to the
Seller, Originator and Original Sellers such that examinations and/or
visits of more than one such Person are conducted contemporaneously (to
the extent that it is reasonably possible to do so).
(e) Keeping and Marking of Records and Books.
(i) The Servicer will (and will cause Originator and
each Original Seller to) maintain and implement administrative
and operating procedures (including, without limitation, an
ability to recreate records evidencing Receivables in the
event of the destruction of the originals thereof), and keep
and maintain all documents, books, records and other
information reasonably necessary or advisable for the
collection of all Receivables (including, without limitation,
records adequate to permit the immediate identification of
each new Receivable and all Collections of and adjustments to
each existing Receivable). The Servicer will (and will cause
Originator and each Original Seller to) give the Agent notice
of any material change in the administrative and operating
procedures referred to in the previous sentence.
(ii) Such Seller Party will (and will cause
Originator and each Original Seller to) (A) on or prior to the
date hereof, ▇▇▇▇ its master data processing records and other
books and records relating to the Pur chaser Interests with a
legend, acceptable to the Agent, describing the Purchaser
Interests and (B) upon the request of the Agent (x) ▇▇▇▇ each
Contract with a legend describing the Purchaser Interests and
(y) deliver to the Agent all Contracts (including, without
limitation, all multiple originals of any such Contract)
relating to the Receivables.
Page 13
(f) Compliance with Contracts and Credit and Collection
Policy. Such Seller Party will (and will cause Originator and each
Original Seller to) timely and fully (i) perform and comply with all
provisions, covenants and other promises required to be observed by it
under the Contracts related to the Receivables, and (ii) comply in all
respects with the Credit and Collection Policy in regard to each
Receivable and the related Contract.
(g) Performance and Enforcement of Transfer Agree- ment and
Receivables Sale Agreement. Seller will, and will require Originator
and each Original Seller to, perform each of their respective
obligations and undertakings under and pursuant to the Receivables Sale
Agreement and the Transfer Agreement, will purchase Receivables
thereunder in strict compli ance with the terms thereof and will
vigorously enforce the rights and remedies accorded to Seller under the
Receivables Sale Agreement and Originator under the Transfer Agreement.
Seller will, and will require Originator to, take all actions to
perfect and enforce its rights and interests (and the rights and
interests of the Agent and the Purchasers as assignees of Seller) under
the Receivables Sale Agreement and the Transfer Agreement,
respectively, as the Agent may from time to time reasonably request,
including, without limitation, making claims to which it may be
entitled under any indem nity, reimbursement or similar provision
contained in the Transfer Agreement or the Receivables Sale Agreement.
(h) Ownership. Seller will (or will cause Origina- tor and
each Original Seller to) take all necessary action to (i) vest legal
and equitable title to the Receivables, the Related Security and the
Collections purchased under the Transfer Agreement and the Receivables
Sale Agreement irrevocably in Seller, free and clear of any Adverse
Claims other than Adverse Claims in favor of the Agent and the
Purchasers (including, without limitation, the filing of all financing
statements or other similar instruments or documents necessary under
the UCC (or any comparable law) of all appropriate jurisdictions to
perfect Originator's and Seller's interest in such Receivables, Related
Security and Collections and such other action to perfect, protect or
more fully evidence the interest of Seller therein as the Agent may
reasonably request), and (ii) establish and maintain, in favor of the
Agent, for the benefit of the Purchasers, a valid and perfected first
priority undivided percentage ownership interest (and/or a valid and
perfected first priority security interest) in all Receivables, Related
Security and Collections to the full extent contemplated herein, free
and clear of any Adverse Claims other than Adverse Claims in favor of
the Agent for the benefit of the Purchasers (including, without
limitation, the filing of all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable
law) of all appropriate jurisdictions to perfect the Agent's (for the
benefit of the Purchasers) interest in such Receivables, Related
Security and Collections and such other action to perfect, protect or
more fully evidence the interest of the Agent for the benefit of the
Purchasers as the Agent may reasonably request).
(i) Purchasers' Reliance. Seller acknowledges that the
Purchasers are entering into the transactions contemplated by this
Agreement in reliance upon Seller's identity as a legal entity that is
separate from Originator and any Affiliates thereof. Therefore, from
and after the date of execution and delivery of this Agreement, Seller
shall take all reasonable steps, including, without limitation, all
steps that the Agent or any Purchaser may from time to time reasonably
request, to maintain Seller's identity as a separate legal entity and
to make it manifest to third parties that Seller is an entity with
assets and liabilities distinct from those of Originator and any other
Affiliate thereof and not just a division of Originator or any such
Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Seller will:
Page 14
(A) conduct its own business in its own name
and require that all full-time employees of Seller, if any,
identify themselves s as such and not as employees of
Originator or any other Affiliate thereof (including, without
limitation, by means of providing appropriate employees with
business or identification cards identifying such employees as
Seller's employees);
(B) compensate all employees, consultants
and agents directly, from Seller's own funds, for services
provided to Seller by such employees, consultants and agents
and, to the extent any employee, consultant or agent of Seller
is also an employee, consultant or agent of Originator or any
other Affiliate thereof, allocate the compensation of such
employee, consultant or agent between Seller and Originator or
such Affiliate, as applicable, on a basis that reflects the
services rendered to Seller and Originator or such Affiliate,
as applica ble;
(C) clearly identify its offices (by signage
or otherwise) as its offices and, if such office is located in
the offices of Originator, Seller shall lease such office at a
fair market rent (which rent may be charged as a component of
an administrative fee rather than separately billed);
(D) have a separate telephone listing,
separate stationery, invoices and checks in its own name;
(E) conduct all transactions with Origina
tor or any other Affiliate thereof (including, without
limitation, any delegation by Originator of its obligations
hereunder as Servicer) strictly on an arm's-length basis,
allocate all overhead expenses (including, without limitation,
telephone and other utility charges) for items shared between
Seller and Originator or any other Affiliate thereof on the
basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis
reasonably related to actual use;
(F) at all times have a Board of Directors
consisting of at least three members, at least one member of
which is an Independ ent Director;
(G) observe all corporate formalities as a
distinct entity, and ensure that all corporate actions
relating to (A) the selection, maintenance or replacement of
the Independent Director (to the extent selected, maintained
or replaced by the Board of Directors), (B) the dissolution or
liquidation of Seller or (C) the initiation of, participation
in, acquiescence in or consent to any bankruptcy, insolvency,
reorganization or similar proceeding involving Seller, are
duly authorized by unanimous vote of its Board of Directors
(including the Inde pendent Director);
(H) maintain Seller's books and records
separate from those of Originator and any other Affiliate
thereof and otherwise readily identifiable as its own assets
rather than assets of Originator and any other Affiliate
thereof;
(I) prepare its financial statements
separately from those of Originator and insure that any
consolidated financial statements of Originator or any other
Affiliate thereof that include Seller and that are filed with
the Securities and Exchange Commission or any other
governmental agency have notes clearly stating that Seller is
a separate corporate entity and that its assets will be
available first and foremost to satisfy the claims of the
creditors of Seller;
Page 15
(J) except as herein specifically otherwise
provided, maintain the funds or other assets of Seller
separate from, and not commingled with, those of Originator or
any other Affiliate thereof and only maintain bank accounts or
other depository accounts to which Seller alone is the account
party, into which Seller or the Servicer makes deposits and
from which Seller or the Servicer (or the Agent hereunder) has
the power to make withdrawals;
(K) pay all of Seller's operating expenses
from Seller's own assets (except for certain payments by
Originator or other Persons pursuant to allocation
arrangements that comply with the requirements of this Section
7.1(i));
(L) operate its business and activities such
that: it does not engage in any business or activity of any
kind, or enter into any transaction or indenture, mortgage,
instrument, agreement, contract, lease or other undertaking,
other than the transactions contemplated and authorized by
this Agreement and the Receivables Sale Agreement; and does
not create, incur, guarantee, assume or suffer to exist any
indebtedness or other liabilities, whether direct or
contingent, other than (1) as a result of the endorsement of
negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business, (2) the
incurrence of obligations under this Agreement, (3) the
incurrence of obligations, as expressly contemplated in the
Receivables Sale Agreement, to make payment to Originator for
the purchase of Receivables from Originator under the
Receivables Sale Agreement, and (4) the incurrence of
operating expenses in the ordinary course of business of the
type otherwise contemplated by this Agreement;
(M) maintain its corporate charter in
conformity with this Agreement, such that it does not amend,
restate, supplement or otherwise modify its Certificate of
Incorporation or By-Laws in any respect that would impair its
ability to comply with the terms or provisions of any of the
Transaction Documents, including, without limitation, Section
7.1(i) of this Agreement;
(N) maintain the effectiveness of, and
continue to perform under the Receivables Sale Agreement, such
that it does not amend, restate, supplement, cancel, terminate
or otherwise modify the Receivables Sale Agreement, or give
any consent, waiver, directive or approval thereunder or waive
any default, action, omission or breach under the Receivables
Sale Agree ment or otherwise grant any indulgence thereunder,
without (in each case) the prior written consent of the Agent;
(O) maintain its corporate separateness such
that it does not merge or consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions, and except as
otherwise contemplated herein) all or substantially all of its
assets (whether now owned or hereafter acquired) to, or
acquire all or substantially all of the assets of, any Person,
nor at any time create, have, acquire, maintain or hold any
interest in any Subsidiary.
Page 16
(P) maintain at all times the Required
Capital Amount (as defined in the Receivables Sale Agreement)
and refrain from making any dividend, distribution, redemption
of capital stock or payment of any subordinated indebtedness
that would cause the Required Capital Amount to cease to be so
maintained; and
(Q) take such other actions as are neces
sary on its part to ensure that the facts and assumptions set
forth in the opinion issued by ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, as
counsel for Seller, in connection with the closing or initial
Incremental Purchase 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.
(j) Collections. Such Seller Party will cause (1) all proceeds
from all Lock-Boxes to be directly deposited by a Collection Bank into
a Collection Account and (2) each Lock-Box and Collection Account to be
subject at all times to a Collection Account Agreement that is in full
force and effect. In the event any payments relating to Receivables are
remitted directly to Seller or any Affiliate of Seller, Seller will
remit (or will cause all such payments to be remitted) directly to a
Collection Bank and deposited into a Collection Account (A) if no
Amortization Event has then occurred and is continuing, within two (2)
Business Days following receipt thereof, and at any time an
Amortization Event has occurred and is continuing, immediately upon
receipt thereof. At all times prior to such remittance, Seller will
itself hold or, if applicable, will cause such payments to be held in
trust for the exclusive benefit of the Agent and the Purchasers. Seller
will maintain exclusive ownership, dominion and control (subject to the
terms of this Agreement) of each Lock- Box and Collection Account and
shall not grant the right to take dominion and control of any Lock- Box
or Collection Account at a future time or upon the occurrence of a
future event to any Person, except to the Agent as contemplated by this
Agreement.
(k) Taxes. Such Seller Party will file all tax returns and
reports required by law to be filed by it and will promptly pay all
taxes and governmental charges at any time owing, except any such taxes
which are not yet delinquent or are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books. Seller
will pay when due any taxes payable in connection with the Receivables,
exclusive of taxes on or measured by income or gross receipts of
Company, the Agent or any Financial Institution.
(l) Payments to Originator and Original Sellers. With respect
to each Receivable purchased by Originator from an Original Seller on
or after the date hereof, such sale shall be effected under, and in
strict compliance with, the terms of the Transfer Agreement, including,
without limitation, the terms relating to the amount and timing of
payments to be made to such Original Seller with respect to the
purchase price for such Receivable. With respect to each Receiv able
purchased by Seller from Originator on or after the date hereof, such
sale shall be effected under, and in strict compliance with, the terms
of the Receivables Sale Agreement, including, without limitation, the
terms relating to the amount and timing of payments to be made to
Originator with respect to the purchase price of such Receivable.
(m) Accuracy of Information. All information furnished by such
Seller Party or any of its Affiliates to Agent or Purchasers will be
true and accurate in every material respect on the date such
information is stated or certified and will not contain any material
misstate ment of fact or omit to state a material face or any fact
necessary to make the statements contained therein not misleading as of
the date such information is stated or certified.
Page 17
Section 7.2 Negative Covenants of the Seller Parties. Until the date on
which the Aggregate Unpaids have been indefeasibly paid in full and this
Agreement terminates in accordance with its terms, each Seller Party hereby
covenants, as to itself, that:
(a) Name Change, Offices and Records. Seller will not change
its name, identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate
its chief executive office or any office where Records are kept unless
it shall have: (i) given the Agent at least forty-five (45) days' prior
written notice thereof with respect to the Seller and (ii) delivered to
the Agent all financing statements, instruments and other documents
requested by the Agent in connection with such change or relocation. In
the event that Servicer shall change its name, Servicer shall notify
Agent of such change immediately, and in any event within 10 days of
the occurrence of any such change. In the event that Servicer shall
change its identity or corporate structure (within the meaning of
Section 9-402(7) of any applicable enactment of the UCC) or relocate
its chief executive office or any office where any material portion of
Records are kept, Servicer shall notify Agent of such change as soon as
reasonably practicable, and in any event within 30 days of the
occurrence of any such change.
(b) Change in Payment Instructions to Obligors. Except as may
be required by the Agent pursuant to Section 8.2(b), such Seller Party
will not add or terminate any bank as a Collection Bank, or make any
change in the instructions to Obligors regarding payments to be made to
any Lock-Box or Collection Account, unless the Agent shall have
received, at least ten (10) days before the proposed effective date
therefor, (i) written notice of such addition, termination or change
and (ii) with respect to the addition of a Collection Bank or a
Collection Account or Lock- Box, an executed Collection Account
Agreement acceptable to the Agent with respect to the new Collection
Account or Lock-Box; provided, however, that the Servicer may make
changes in instructions to Obligors regarding payments if such new
instructions require such Obligor to make payments to another existing
Collection Account.
(c) Modifications to Contracts and Credit and Collection
Policy. Such Seller Party will not, and will not permit Originator or
any Original Seller to, make any material change or material amendment
to the Credit and Collection Policy that could reasonably be expected
to adversely affect the collectibility of the Receivables or decrease
the credit quality of any newly created Receivables without the Agent's
prior written consent. Except as provided in Section 8.2(d), the
Servicer will not, and will not permit Originator or any Original
Seller to, extend, amend or otherwise modify the terms of any
Receivable or any Contract related thereto other than in accor dance
with the Credit and Collection Policy.
(d) Sales, Liens. Seller will not sell, assign (by operation
of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon
(including, without limitation, the filing of any financing statement)
or with respect to, any Receivable, Related Security or Collections, or
upon or with respect to any Contract under which any Receivable arises,
or any Lock-Box or Collection Account, or assign any right to receive
income with respect thereto (other than, in each case, the creation of
the interests therein in favor of the Agent and the Purchasers provided
for herein), and Seller will defend the right, title and interest of
the Agent and the Purchasers in, to and under any of the foregoing
property, against all claims of third parties claiming through or under
Seller, Originator or any Original Seller. Seller will not create or
suffer to exist any mortgage, pledge, security interest, encumbrance,
lien, charge or other similar arrangement on any of its inventory.
(e) Net Receivables Balance. At no time prior to the
Amortization Date shall Seller permit the Net Receivables Balance to be
less than an amount equal to the sum of (i) the Aggregate Capital plus
(ii) the Aggregate Reserves for any period in excess of two (2)
Business Days.
Page 18
(f) Termination Date Determination. Seller will not designate
the Termination Date (as defined in the Receivables Sale Agreement), or
send any written notice to Originator with respect thereto, or permit
Originator to designate the Termination Date (as defined in the
Transfer Agreement), or send any written notice to any Original Seller
with respect thereto, without the prior written consent of the Agent,
except with respect to the occurrence of such Termination Date arising
pursuant to Section 5.1(d) of the Transfer Agreement or the Receivables
Sale Agreement.
(g) Restricted Junior Payments. From and after the occurrence
of any Amortization Event, Seller will not make any Restricted Junior
Payment if, after giving effect thereto, Seller would fail to meet its
obligations set forth in Section 7.2(e).
ARTICLE VIII
ADMINISTRATION AND COLLECTION
Section 8.1 Designation of Servicer. (a) The servicing, administration
and collection of the Receivables shall be conducted by such Person (the
"Servicer") so designated from time to time in accordance with this Section 8.1.
Interface is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms of this Agreement. The Agent
may at any time following the occurrence of an Amortization Event designate as
Servicer any Person to succeed Interface or any successor Servicer.
(b) Interface may delegate, and Interface hereby advises the
Purchasers and the Agent that it has delegated, to each Original
Seller, as sub-servicer of the Servicer, certain of its duties and
responsibilities as Servicer hereunder with respect to the Receivables
originated by such Original Seller. Without the prior written consent
of the Agent and the Required Financial Institutions, neither Interface
nor any Original Seller shall be permitted to delegate any of its
duties or responsibilities as Servicer or sub-servicer to any Person
other than (i) Seller and (ii) with respect to certain Charged-Off
Receivables, outside collection agencies in accordance with its
customary practices. Seller shall not be permitted to further delegate
to any other Person any of the duties or responsibilities of the
Servicer delegated to it by Interface. If at any time the Agent shall
designate as Servicer any Person other than Interface, all duties and
responsibilities theretofore delegated by Interface to Seller may, at
the discretion of the Agent, be terminated forthwith on notice given by
the Agent to Interface and to Seller.
(c) Notwithstanding the foregoing subsection (b), (i)
Interface shall be and remain primarily liable to the Agent and the
Purchasers for the full and prompt performance of all duties and
responsibilities of the Servicer hereunder and (ii) the Agent and the
Purchasers shall be entitled to deal exclusively with Interface in
matters relating to the discharge by the Servicer of its duties and
responsibilities hereunder. The Agent and the Purchasers shall not be
required to give notice, demand or other communication to any Person
other than Interface in order for communica tion to the Servicer and
its sub-servicer or other delegate with respect thereto to be
accomplished. Interface, at all times that it is the Servicer, shall be
responsible for providing any sub-servicer or other delegate of the
Servicer with any notice given to the Servicer under this Agreement.
Section 8.2 Duties of Servicer. (a) The Servicer shall take or cause to
be taken all such actions as may be necessary or advisable to collect each
Receivable from time to time, all in accordance with applicable laws, rules and
regulations, with reasonable care and diligence, and in accordance with the
Credit and Collection Policy.
Page 19
(b) The Servicer has instructed and will continue to instruct
all Obligors to pay all Collections directly to a Lock-Box or
Collection Account. The Servicer shall effect a Collection Account
Agreement substantially in the form of Exhibit VI with each bank party
to a Collection Account at any time. In the case of any remittances
received in any Lock-Box or Collection Account that shall have been
identified, to the satisfaction of the Servicer, to not constitute
Collections or other proceeds of the Receivables or the Related
Security, the Servicer shall promptly remit such items to the Person
identified to it as being the owner of such remittances. From and after
the date the Agent delivers to any Collection Bank a Collection Notice
pursuant to Section 8.3, the Agent may request that the Servicer, and
the Servicer thereupon promptly shall instruct all Obligors with
respect to the Receivables, to remit all payments thereon to a new
depositary account specified by the Agent and, at all times thereafter,
Seller and the Servicer shall not deposit or otherwise credit, and
shall not permit any other Person to deposit or otherwise credit to
such new depositary account any cash or payment item other than
Collections.
(c) The Servicer shall administer the Collections in
accordance with the procedures described herein and in Article II. The
Servicer shall set aside and hold in trust for the account of Seller
and the Purchasers their respective shares of the Collections in
accordance with Article II. The Servicer shall, upon the request of the
Agent, segregate, in a manner acceptable to the Agent, all cash, checks
and other instruments received by it from time to time constituting
Collections from the general funds of the Servicer or Seller prior to
the remittance thereof in accordance with Article II. If the Servicer
shall be required to segregate Collections pursuant to the preceding
sentence, the Servicer shall segregate and deposit with a bank
designated by the Agent such allocable share of Collections of
Receivables set aside for the Purchasers on the first Business Day
following receipt by the Servicer of such Collections, duly endorsed or
with duly executed instruments of transfer.
(d) The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Receivable or adjust the
Outstanding Balance of any Receivable as the Servicer determines to be
appropriate to maximize Collections thereof; provided, however, that
such extension or adjustment shall not alter the status of such
Receivable as a Delinquent Receivable or Charged-Off Receivable or
limit the rights of the Agent or the Purchasers under this Agreement.
Notwithstanding anything to the contrary contained herein, the Agent
shall have the absolute and unlimited right to direct the Servicer to
commence or settle any legal action with respect to any Receivable or
to foreclose upon or repossess any Related Security.
(e) The Servicer shall hold in trust for Seller and the
Purchasers all Records that (i) evidence or relate to the Receivables,
the related Contracts and Related Security or (ii) are otherwise
necessary or desirable to collect the Receivables and shall, as soon as
practicable upon demand of the Agent, deliver or make available to the
Agent all such Records, at a place selected by the Agent. The Servicer
shall, as soon as practicable following receipt thereof turn over to
Seller any cash collections or other cash proceeds received with
respect to Indebtedness not constituting Receivables. The Servicer
shall, from time to time at the request of any Purchaser, furnish to
the Purchasers (promptly after any such request) a calculation of the
amounts set aside for the Purchasers pursuant to Article II.
(f) Any payment by an Obligor in respect of any indebtedness
owed by it to any Original Seller, Originator or Seller shall, except
as otherwise specified by such Obligor or otherwise required by
contract or law and unless otherwise instructed by the Agent, be
applied as a Collection of any Receivable of such Obligor (starting
with the oldest such Receivable) to the extent of any amounts then due
and payable thereunder before being applied to any other receivable or
other obligation of such Obligor.
Page 20
Section 8.3 Collection Notices. The Agent is authorized at any time to
date and to deliver to the Collection Banks the Collection Notices. Seller
hereby transfers to the Agent for the benefit of the Purchasers, effective when
the Agent delivers such notice, the exclusive ownership and control of each
Lock-Box and the Collection Accounts. In case any authorized signatory of Seller
whose signature appears on a Collection Account Agreement shall cease to have
such authority before the delivery of such notice, such Collection Notice shall
nevertheless be valid as if such authority had remained in force. Seller hereby
authorizes the Agent, and agrees that the Agent shall be entitled to (i) endorse
Seller's name on checks and other instruments representing Collections, (ii)
enforce the Receivables, the related Contracts and the Related Security and
(iii) take such action as shall be necessary or desirable to cause all cash,
checks and other instruments constituting Collections of Receivables to come
into the possession of the Agent rather than Seller.
Section 8.4 Responsibilities of Seller. Anything herein to the contrary
notwithstanding, the exercise by the Agent and the Purchasers of their rights
hereunder shall not release the Servicer, any Original Seller, Originator or
Seller from any of their duties or obligations with respect to any Receivables
or under the related Contracts. The Purchasers shall have no obligation or
liability with respect to any Receivables or related Contracts, nor shall any of
them be obligated to perform the obligations of Seller.
Section 8.5 Reports. The Servicer shall prepare and forward to the
Agent (i) on Wednesday of each calendar week (or if, in any calendar week,
Wednesday is not a Business Day, on the next Business day of such calendar week)
and at such times as the Agent shall request, a Weekly Report prepared as of the
last Business Day of the immediately preceding calendar week, (ii) on the 15th
calendar day of each fiscal month and at such times as the Agent shall request,
a Monthly Report prepared as of the last calendar day of the previous fiscal
month, and (iii) at such times as the Agent shall request, a listing by Obligor
of all Receivables together with an aging of such Receiv ▇▇▇▇▇.
Section 8.6 Servicing Fees. In consideration of Interface's agreement
to act as Servicer hereunder, the Purchasers hereby agree that, so long as
Interface shall continue to perform as Servicer hereunder, Seller shall pay over
to Interface a fee (the "Servicing Fee") on the first calendar day of each
month, in arrears for the immediately preceding month, equal to 1% per annum of
the lesser of the Aggregate Capital outstanding during such period and the Net
Receivables Balance during such period, as compensation for its servicing
activities.
ARTICLE IX
AMORTIZATION EVENTS
Section 9.1 Amortization Events. The occurrence of any one or more of
the following events shall constitute an Amortization Event:
(a) Any Seller Party shall fail (i) to make any payment or
deposit of Capital required hereunder when due (including, without
limitation, any payment or deposit required pursuant to Section 2.6(b)
hereof) and, in the case of any failure to make a timely payment or
deposit solely by reason of any mechanical delay in or malfunction of
the Fedwire system, such failure shall continue for one (1) Business
Day and so long as such Seller Party pays immediately upon demand any
and all losses, costs and expenses incurred by any Purchaser or the
Agent in connection with or as a result of such failure to make a
timely payment or deposit, (ii) to make any payment or deposit (other
than as referred to in clause (i) of this paragraph (a)) of any other
amounts when due hereunder and such failure shall continue for three
(3) consecutive Business Days, (iii) to comply with the provisions of
Section 7.1(b)(i), (ii), (iii) or (iv) or 7.2 and such failure shall
continue for three (3) consecutive Business Days, (iv) to comply with
the provisions of Section 7.1 (c), (f), (g), (h), (j), (l) or (m)
Page 21
and such failure shall continue for five (5) consecutive Business Days
or (v) to perform or observe any term, covenant or agreement hereunder
(other than as referred to in clauses (i), (ii), (iii) or (iv) of this
paragraph (a)) and such failure shall continue for ten (10) consecutive
Business Days.
(b) Any representation, warranty, certification or statement
made by any Seller Party in this Agreement, any other Transaction
Document or in any other document delivered pursuant hereto or thereto
shall prove to have been incorrect when made or deemed made.
(c) Failure of Seller to pay any Indebtedness when due in an
amount in excess of $10,500, or the failure of any other Seller Party
to pay Indebtedness when due in an amount in excess of $10,000,000; or
the default by any Seller Party in the performance of any term,
provision or condition contained in any agreement under which any such
Indebtedness was created or is governed, the effect of which is to
cause, or to permit the holder or holders of such Indebtedness to
cause, such Indebtedness to become due prior to its stated maturity; or
any such Indebtedness of any Seller Party 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.
(d) (i) Any Seller Party or any Original Seller shall
generally not pay its debts as such debts become due or shall admit in
writing its inability to pay its debts generally or shall make a
general assignment for the benefit of creditors; or (ii) any proceeding
shall be instituted by any Seller Party or any Original Seller seeking
to adjudicate it bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee or
other similar official for it or any substantial part of its property;
(iii) any proceeding shall be instituted against any Seller Party or
any Original Seller seeking to adjudicate it bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or
any substantial part of its property which proceeding is not dismissed
within 30 days of the institution thereof or (iv) any Seller Party or
any Original Seller shall take any corporate action to authorize any of
the actions set forth in this subsection (d).
(e) As at the end of any fiscal month, the average of the
Delinquency Ratios for the three fiscal months most recently ended
shall exceed 7.00% or the average of the Default Ratios for the three
fiscal months most recently ended shall exceed 3.50% or the average of
the Dilution Ratios for the three fiscal months most recently ended
shall exceed 6.50%.
(f) An "Event of Default" (as defined therein) by Interface of
its obligations under Section 7.09 of the Interface Credit Facilities.
(g) (i) A Change of Control shall occur or exist, or (ii) any
event or condition shall occur or exist that, pursuant to the terms of
any Change in Control Provision, requires or permits the holder(s) of
Interface Control Debt to require that such Interface Control Debt be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in
part, or the maturity of such Interface Control Debt to be accelerated
in any respect; provided, however, that no Amortization Event hereunder
shall be deemed to exist upon the occurrence of any event or condition
described in the foregoing clauses (i) or (ii) until thirty (30) days
after the first occurrence or existence of such event or condition.
(h) (i) One or more final judgments for the payment of money
in an amount in excess of $10,500, individually or in the aggregate,
shall be entered against Seller or (ii) one or more final judgments for
the payment of money in an amount in excess of $10,000,000,
individually or in the aggregate, shall be entered against the Servicer
on claims not covered by insurance or as to which the insurance carrier
has denied its responsibility, and such judgment shall continue
unsatisfied and in effect for thirty (30) consecutive days without a
stay of execution.
Page 22
(i) The "Termination Date" under and as defined in the
Receivables Sale Agreement shall occur under the Receivables Sale
Agreement or the Seller or Originator shall fail to observe any term or
condition of the Receivables Sale Agreement (taking into account any
applicable grace period set forth therein) or the Seller shall waive
its right to enforce the terms and conditions of the Receivables Sale
Agreement or Originator shall for any reason cease to transfer, or
cease to have the legal capacity to transfer, or otherwise be incapable
of transferring Receivables to Seller under the Receivables Sale
Agreement.
(j) The "Termination Date" under and as defined in the
Transfer Agreement shall occur under the Transfer Agreement or the
Originator or any Original Seller shall fail to observe any term or
condition of the Transfer Agreement (taking into account any applicable
grace period set forth therein) or Originator shall waive its right to
enforce the terms and conditions of the Transfer Agreement or any
Original Seller shall for any reason cease to transfer, or cease to
have the legal capacity to transfer, or otherwise be incapable of
transferring Receivables to Originator under the Transfer Agreement.
(k) This Agreement shall terminate in whole or in part (except
in accordance with its terms), or shall cease to be effective or to be
the legally valid, binding and enforceable obligation of Seller, or any
Obligor shall directly or indirectly contest in any manner such
effectiveness, validity, binding nature or enforceability, or the Agent
for the benefit of the Purchasers shall cease to have a valid and
perfected first priority security interest in the Receivables, the
Related Security and the Collections with respect thereto and the
Collection Accounts.
(l) Interface shall fail to own, free and clear of any Adverse
Claims, 100% of the voting stock of Seller.
Section 9.2 Remedies. Upon the occurrence and during the
continuation of an Amortization Event, the Agent may, or upon the
direction of the Required Financial Institutions shall, take any of the
following actions: (i) replace the Person then acting as Servicer, (ii)
declare the Amortization Date to have occurred, whereupon the
Amortization Date shall forthwith occur, without demand, protest or
further notice of any kind, all of which are hereby expressly waived by
each Seller Party; provided, however, that upon the occurrence of an
Amortization Event described in Section 9.1(d), or of an actual or
deemed entry of an order for relief with respect to any Seller Party
under the Federal Bankruptcy Code, the Amortization Date shall
automatically occur, without demand, protest or any notice of any kind,
all of which are hereby expressly waived by each Seller Party, (iii) to
the fullest extent permitted by applicable law, declare that the
Default Fee shall accrue with respect to any of the Aggregate Unpaids
outstanding at such time, (iv) deliver the Collection Notices to the
Collection Banks, and (v) notify Obligors of the Purchasers' interest
in the Receivables. The aforementioned rights and remedies shall be
without limitation, and shall be in addition to all other rights and
remedies of the Agent and the Purchasers otherwise available under any
other provision of this Agreement, by operation of law, at equity or
otherwise, all of which are hereby expressly preserved, including,
without limitation, all rights and remedies provided under the UCC, all
of which rights shall be cumulative.
Page 23
ARTICLE X
INDEMNIFICATION
Section 10.1 Indemnities by The Seller Parties. Without limiting any
other rights that the Agent or any Purchaser may have hereunder or under
applicable law, (A) Seller hereby agrees to indemnify (and pay upon demand to)
the Agent and each Purchaser and their respective assigns, officers, directors,
agents and employees (each an "Indemnified Party") from and against any and all
damages, losses, claims, taxes, liabilities, costs, expenses and for all other
amounts payable, including reasonable attorneys' fees (which attorneys may be
employees of the Agent or such Purchaser) and disbursements (all of the
foregoing being collectively referred to as "Indemnified Amounts") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by a Purchaser of
an interest in the Receivables, and (B) the Servicer hereby agrees to indemnify
(and pay upon demand to) each Indemnified Party for Indemnified Amounts awarded
against or incurred by any of them arising out of the Servicer's activities as
Servicer hereunder excluding, however, in all of the foregoing instances under
the preceding clauses (A) and (B):
(i) 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;
(ii) Indemnified Amounts to the extent the same
includes losses in respect of Receivables that are
uncollectible on account of the insolvency, bankruptcy or lack
of creditworthiness of the related Obligor; or
(iii) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located and
any jurisdiction in which such Indemnified Party is doing
business (except to the extent that any such tax is imposed by
such jurisdiction based upon this Agreement or any other
Transaction Document), on or measured by the overall net
income of such Indemnified Party to the extent that the
computation of such taxes is consistent with the
characterization for income tax purposes of the acquisition by
the Purchasers of Purchaser Interests as a loan or loans by
the Purchasers to Seller secured by the Receivables, the
Related Security, the Collection Accounts and the Collections;
provided, however, that nothing contained in this sentence shall limit
the liability of any Seller Party or limit the recourse of the
Purchasers to any Seller Party for amounts otherwise specifically
provided to be paid by such Seller Party under the terms of this
Agreement. Without limiting the generality of the foregoing
indemnification, Seller shall indemnify each Indemnified Party for
Indemnified Amounts (including, without limitation, losses in respect
of uncollectible receivables, regardless of whether reimbursement
therefor would constitute recourse to Seller or the Servicer) relating
to or resulting from:
(i) any representation or warranty made by any Seller
Party, Originator or any Original Seller (or any officers of
any such Person) under or in connection with this Agreement,
any other Transaction Docu ment or any other information or
report delivered by any such Person pursuant hereto or
thereto, that shall have been false or incorrect when made or
deemed made;
Page 24
(ii) the failure by Seller, the Servicer, Originator
or any Original Seller to comply with any applicable law, rule
or regulation with respect to any Receivable or Contract
related thereto, or the noncon formity of any Receivable or
Contract included therein with any such applicable law, rule
or regulation or any failure of Originator or any Original
Seller to keep or perform any of its obligations, express or
implied, with respect to any Contract;
(iii) any failure of Seller, the Servicer, Originator
or any Original Seller to perform its duties, covenants or
other obliga tions in accordance with the provisions of this
Agreement or any other Transaction Document;
(iv) any products liability, personal injury or
damage suit, or other similar claim arising out of or in
connection with ▇▇▇▇▇▇▇ ▇▇▇▇, insurance or services that are
the subject of any Contract or any Receivable;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the
payment of any Receivable (including, without limitation, a
defense based on such Receivable or the related Contract not
being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any
other claim resulting from the sale of the merchandise or
service related to such Receivable or the furnishing or
failure to furnish such merchandise or services;
(vi) the commingling of Collections of Receivables at
any time with other funds;
(vii) any investigation, litigation or pro ceeding
related to or arising from this Agreement or any other
Transaction Docu ment, the transactions contemplated hereby,
the use of the proceeds of an Incremen tal Purchase or a
Reinvestment, the ownership of the Purchaser Interests or any
other investigation, litigation or proceeding relating to
Seller, the Servicer, Origina tor or any Original Seller in
which any Indemnified Party becomes involved as a result of
any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against
any Obligor in respect of any Receivable as a result of such
Obligor being immune from civil and commercial law and suit on
the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(ix) any Amortization Event described in Section
9.1(d);
(x) any failure of Seller to acquire and maintain
legal and equitable title to, and ownership of any Receivable
and the Related Security and Collections with respect thereto
from Originator or any failure of Originator to acquire and
maintain legal and equitable title to, and ownership of any
Receivable and the Related Security and Collections with
respect thereto from the Original Seller thereof, in each case
free and clear of any Adverse Claim (other than as created
hereunder); any failure of Seller to give reasonably
equivalent value to Originator under the Receivables Sale
Agreement in consideration of the transfer by Originator of
such Receivable, or any attempt by any Person to void such
transfer under statutory provisions or common law or equitable
action; or any failure of Originator to give reasonably
equivalent value to the Original Seller of any Receivable
under the Transfer Agreement in consideration of the transfer
by such Original Seller of such Receivable, or any attempt by
any Person to void such transfer under statutory provisions or
common law or equitable action;
Page 25
(xi) any failure to vest and maintain vested in the
Agent for the benefit of the Purchasers, or to transfer to the
Agent for the benefit of the Purchasers, legal and equitable
title to, and ownership of, a first priority perfected
undivided percentage ownership interest (to the extent of the
Purchaser Interests contemplated hereunder) or security
interest in the Receivables, the Related Security and the
Collections, free and clear of any Adverse Claim (except as
created by the Transaction Documents);
(xii) the failure to have filed, or any delay in
filing, financing statements or other similar instruments or
documents under the UCC of any applicable jurisdiction or
other applicable laws with respect to any Receivable, the
Related Security and Collections with respect thereto, and the
proceeds of any thereof, whether at the time of any
Incremental Purchase or Reinvestment or at any subsequent
time;
(xiii) any action or omission by any Seller Party
that reduces or impairs the rights of the Agent or the
Purchasers with respect to any Receivable or the value of any
such Receivable;
(xiv) any attempt by any Person to void any
Incremental Purchase or Reinvestment hereunder under statutory
provisions or common law or equitable action; and
(xv) the failure of any Receivable included in the
calculation of the Net Receivables Balance as an Eligible
Receivable to be an Eligible Receivable at the time so
included.
Section 10.2 Increased Cost and Reduced Return.
If after the date hereof, any Funding Source shall be charged any fee,
expense or increased cost on account of the adoption of any applicable law, rule
or regulation (including any applicable law, rule or regulation regarding
capital adequacy) or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or compara
ble agency charged with the interpretation or administration thereof, or
compliance with any request or directive (whether or not having the force of
law) of any such authority, central bank or compara ble agency (a "Regulatory
Change"): (i) that subjects any Funding Source to any charge or withhold ing on
or with respect to any Funding Agreement or a Funding Source's obligations under
a Funding Agreement, or on or with respect to the Receivables, or changes the
basis of taxation of payments to any Funding Source of any amounts payable under
any Funding Agreement (except for changes in the rate of tax on the overall net
income of a Funding Source or taxes excluded by Section 10.1) or (ii) that
imposes, modifies or deems applicable any reserve, assessment, insurance charge,
special deposit or similar requirement against assets of, deposits with or for
the account of a Funding Source, or credit extended by a Funding Source pursuant
to a Funding Agreement or (iii) that imposes any other condition the result of
which is to increase the cost to a Funding Source of performing its obligations
under a Funding Agreement, or to reduce the rate of return on a Funding Source's
capital as a consequence of its obligations under a Funding Agreement, or to
reduce the amount of any sum received or receivable by a Funding Source under a
Funding Agreement or to require any payment calculated by reference to the
amount of interests or loans held or interest received by it, then, upon demand
by the Agent, Seller shall pay to the Agent, for the benefit of the relevant
Funding Source, such amounts charged to such Funding Source or such amounts to
otherwise compensate such Funding Source for such increased cost or such
reduction.
Page 26
Section 10.3 Other Costs and Expenses. Seller shall pay to the Agent
and Company on demand all costs and out-of-pocket expenses actually incurred in
connection with the preparation, execution, delivery and administration of this
Agreement, the transactions contemplated hereby and the other documents to be
delivered hereunder, including without limitation, the cost of Company's
auditors auditing the books, records and procedures of Seller, reasonable fees
and out-of-pocket expenses of legal counsel for Company and the Agent actually
incurred (which such counsel may be employees of Company or the Agent to the
extent not duplicative of services provided by outside counsel, in which case
such fees may consist of internally allocated costs with respect to such
internal counsel; provided, that such internally-allocated costs shall not
include typically separately expressed items such as telephone, telecopier and
photocopy charges, each of which shall be separately stated in any invoice to
Seller; provided, further, that such fees shall be as may be reasonable and
customary for internal counsel of financial institutions) with respect thereto
and with respect to advising Company and the Agent as to their respective rights
and remedies under this Agreement. Seller shall pay to the Agent on demand any
and all costs and expenses of the Agent and the Purchasers actually incurred, if
any, including reasonable counsel fees and expenses actually incurred (which
such counsel may be employees of Company or the Agent to the extent not duplica
tive of services provided by outside counsel, in which case such fees may
consist of internally allocated costs with respect to such counsel) in
connection with the enforcement of this Agreement and the other documents
delivered hereunder and in connection with any restructuring or workout of this
Agreement or such documents, or the administration of this Agreement following
an Amortiza tion Event.
ARTICLE XI
THE AGENT
Section 11.1 Authorization and Action. Each Purchaser hereby designates
and appoints Bank One to act as its agent hereunder and under each other
Transaction Document, and authorizes the Agent to take such actions as agent on
its behalf and to exercise such powers as are delegated to the Agent by the
terms of this Agreement and the other Transaction Documents together with such
powers as are reasonably incidental thereto. The Agent shall not have any duties
or responsibilities, except those expressly set forth herein or in any other
Transaction Document, or any fiduciary relationship with any Purchaser, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities on the part of the Agent shall be read into this Agreement or any
other Transaction Document or otherwise exist for the Agent. In performing its
functions and duties hereunder and under the other Transaction Documents, the
Agent shall act solely as agent for the Purchasers and does not assume nor shall
be deemed to have assumed any obligation or relationship of trust or agency with
or for any Seller Party or any of such Seller Party's successors or assigns. The
Agent shall not be required to take any action that exposes the Agent to
personal liability or that is contrary to this Agreement, any other Transaction
Document or applicable law. The appointment and authority of the Agent hereunder
shall terminate upon the indefeasible payment in full of all Aggregate Unpaids.
Each Purchaser hereby authorizes the Agent to execute each of the Uniform
Commercial Code financing statements on behalf of such Purchaser (the terms of
which shall be binding on such Purchaser).
Section 11.2 Delegation of Duties. The Agent may execute any of its
duties under this Agreement and each other Transaction Document by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
Page 27
Section 11.3 Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, agents or employees shall be (i) liable for any action
lawfully taken or omitted to be taken by it or them under or in connection with
this Agreement or any other Transaction Docu ment (except for its, their or such
Person's own gross negligence or willful misconduct), or (ii) responsible in any
manner to any of the Purchasers for any recitals, statements, representations or
warranties made by any Seller Party contained in this Agreement, any other
Transaction Document or any certificate, report, statement or other document
referred to or provided for in, or received under or in connection with, this
Agreement, or any other Transaction Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Transaction Document or any other document furnished in connection
herewith or therewith, or for any failure of any Seller Party to perform its
obligations hereunder or thereunder, or for the satisfaction of any condition
specified in Article VI, or for the perfection, priority, condition, value or
sufficiency of any collateral pledged in connection herewith. The Agent shall
not be under any obligation to any Purchaser to ascertain or to inquire as to
the observance or performance of any of the agreements or covenants contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of the Seller Parties. The Agent shall
not be deemed to have knowledge of any Amortization Event or Potential
Amortization Event unless the Agent has received notice from Seller or a
Purchaser.
Section 11.4 Reliance by Agent. The Agent shall in all cases be
entitled to rely, and shall be fully protected in relying, upon any document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to Seller), independent
accountants and other experts selected by the Agent. The Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Transaction Document unless it shall first receive such
advice or concurrence of Company or the Required Financial Institutions or all
of the Purchasers, as applicable, as it deems appropriate and it shall first be
indemnified to its satisfaction by the Purchasers, provided that unless and
until the Agent shall have received such advice, the Agent may take or refrain
from taking any action, as the Agent shall deem advisable and in the best
interests of the Purchasers. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, in accordance with a request of Company or
the Required Financial Institutions or all of the Purchasers, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Purchasers.
Section 11.5 Non-Reliance on Agent and Other Purchasers. Each Purchaser
expressly acknowledges that neither the Agent, nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Seller
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Purchaser represents and warrants to the Agent that it has and will,
independently and without reliance upon the Agent or any other Purchaser and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of Seller and
made its own decision to enter into this Agreement, the other Transaction
Documents and all other documents related hereto or thereto.
Section 11.6 Reimbursement and Indemnification. The Financial
Institutions agree to reimburse and indemnify the Agent and its officers,
directors, employees, representatives and agents ratably according to their Pro
Rata Shares, to the extent not paid or reimbursed by the Seller Parties (i) for
any amounts for which the Agent, acting in its capacity as Agent, is entitled to
reimbursement by the Seller Parties hereunder and (ii) for any other expenses
incurred by the Agent, in its capacity as Agent and acting on behalf of the
Purchasers, in connection with the administration and enforcement of this
Agreement and the other Transaction Documents.
Page 28
Section 11.7 Agent in its Individual Capacity. The Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with Seller or any Affiliate of Seller as though the Agent were
not the Agent hereunder. With respect to the acquisition of Purchaser Interests
pursuant to this Agreement, the Agent shall have the same rights and powers
under this Agreement in its individual capacity as any Purchaser and may
exercise the same as though it were not the Agent, and the terms "Financial
Institution," "Purchaser," "Financial Institutions" and "Purchasers" shall
include the Agent in its individual capacity.
Section 11.8 Successor Agent. The Agent may, upon five days' notice to
Seller and the Purchasers, and the Agent will, upon the direction of all of the
Purchasers (other than the Agent, in its individual capacity) resign as Agent.
If the Agent shall resign, then the Required Financial Institutions during such
five-day period shall appoint from among the Purchasers a successor agent. If
for any reason no successor Agent is appointed by the Required Financial
Institutions during such five-day period, then effective upon the termination of
such five day period, the Purchasers shall perform all of the duties of the
Agent hereunder and under the other Transaction Documents and Seller and the
Servicer (as applicable) shall make all payments in respect of the Aggregate
Unpaids directly to the applicable Purchasers and for all purposes shall deal
directly with the Purchasers. After the effectiveness of any retiring Agent's
resignation hereunder as Agent, the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Transaction Documents and
the provisions of this Article XI and Article X shall continue in effect for its
benefit with respect to any actions taken or omitted to be taken by it while it
was Agent under this Agreement and under the other Transaction Documents.
ARTICLE XII
ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Assignments. (a) Seller and each Financial Institution
hereby agree and consent to the complete or partial assignment by Company of all
or any portion of its rights under, interest in, title to and obligations under
this Agreement to the Financial Institutions pursuant to Section 13.1, and upon
such assignment, Company shall be released from its obligations so assigned.
Further, Seller and each Financial Institution hereby agree that any assignee of
Company of this Agreement or all or any of the Purchaser Interests of Company
shall have all of the rights and benefits under this Agreement as if the term
"Company" explicitly referred to such party, and no such assignment shall in any
way impair the rights and benefits of Company hereunder. Neither Seller nor the
Servicer shall have the right to assign its rights or obligations under this
Agreement; provided, that the foregoing shall not prevent the delegation by
Interface of its obligations as Servicer to the Original Sellers as
sub-servicers in accordance with Section 8.2 hereof.
(b) Any Financial Institution may at any time and from time to
time assign to one or more Persons ("Purchasing Financial
Institutions") all or any part of its rights and obligations under this
Agreement pursuant to an assignment agreement, substantially in the
form set forth in Exhibit VII hereto (the "Assignment Agreement")
executed by such Purchasing Financial Institution and such selling
Financial Institution. The consent of Company and the Seller (which
consent shall not be unreasonably withheld or delayed) shall be
required prior to the effectiveness of any assignment by any Financial
Institution of all or any part of its rights and obligations under this
Section 12.1(b). Each assignee of a Financial Institution must (i) have
a short-term debt rating of A-1 or better by Standard & Poor's Ratings
Group and P-1 by ▇▇▇▇▇'▇ Investor Service, Inc. and (ii) agree to
deliver to the Agent, promptly following any request therefor by the
Agent or Company, an enforceability opinion in form and substance
satisfactory to the Agent and Company. Upon delivery of the executed
Assignment Agreement to the Agent, such selling Financial Institution
shall be released from its obligations hereunder to the extent of such
assignment. Thereafter the Purchasing Financial Institution shall for
all purposes be a Financial Institution party to this Agreement and
shall have all the rights and obligations of a Financial Institution
under this Agreement to the same extent as if it were an original party
hereto and no further consent or action by Seller, the Purchasers or
the Agent shall be required.
Page 29
(c) Each of the Financial Institutions agrees that in the
event that it shall cease to have a short-term debt rating of A-1 or
better by Standard & Poor's Ratings Group and P-1 by ▇▇▇▇▇'▇ Investor
Service, Inc. (an "Affected Financial Institution"), such Affected
Financial Institution shall be obliged, at the request of Company or
the Agent, to assign all of its rights and obligations hereunder to (x)
another Financial Institution or (y) another funding entity nominated
by the Agent and acceptable to Company, and willing to participate in
this Agreement through the Liquidity Termination Date in the place of
such Affected Financial Institution; provided that the Affected
Financial Institution receives payment in full, pursuant to an
Assignment Agreement, of an amount equal to such Financial
Institution's Pro Rata Share of the Aggregate Capital and Yield owing
to the Financial Institutions and all accrued but unpaid fees and other
costs and expenses payable in respect of its Pro Rata Share of the
Purchaser Interests of the Financial Institutions.
Section 12.2 Participations. Any Financial Institution may, in the
ordinary course of its business at any time sell to one or more Persons (each a
"Participant") participating interests in its Pro Rata Share of the Purchaser
Interests of the Financial Institutions, its obligation to pay Company its
Acquisition Amounts or any other interest of such Financial Institution
hereunder. Notwithstanding any such sale by a Financial Institution of a
participating interest to a Participant, such Financial Institution's rights and
obligations under this Agreement shall remain unchanged, such Financial
Institution shall remain solely responsible for the performance of its
obligations hereunder, and Seller, Company and the Agent shall continue to deal
solely and directly with such Financial Institution in connection with such
Financial Institution's rights and obligations under this Agreement. Each
Financial Institution agrees that any agreement between such Financial
Institution and any such Participant in respect of such participating interest
shall not restrict such Financial Institution's right to agree to any amendment,
supplement, waiver or modification to this Agreement, except for any amendment,
supplement, waiver or modification described in Section 14.1(b)(i).
ARTICLE XIII
LIQUIDITY FACILITY
Section 13.1 Transfer to Financial Institutions. Each Financial
Institution hereby agrees, subject to Section 13.4, that immediately upon
written notice from Company delivered on or prior to the Liquidity Termination
Date, it shall acquire by assignment from Company, without recourse or warranty,
its Pro Rata Share of one or more of the Purchaser Interests of Company as
specified by Company. Each such assignment by Company shall be made pro rata
among all of the Financial Institutions, except for pro rata assignments to one
or more Terminating Financial Institutions pursuant to Section 13.6. Each such
Financial Institution shall, no later than 1:00 p.m. (Chicago time) on the date
of such assignment, pay in immediately available funds (unless another form of
payment is otherwise agreed between Company and any Financial Institution) to
the Agent at an account designated by the Agent, for the benefit of Company, its
Acquisition Amount. Unless a Financial Institution has notified the Agent that
it does not intend to pay its Acquisition Amount, the Agent may assume that such
payment has been made and may, but shall not be obligated to, make the amount of
such payment available to Company in reliance upon such assumption. Company
hereby sells and assigns to the Agent for the ratable benefit of the Financial
Institutions, and the Agent hereby purchases and assumes from Company, effective
upon the receipt by Company of the Company Transfer Price, the Purchaser
Interests of Company that are the subject of any transfer pursuant to this
Article XIII.
Page 30
Section 13.2 Transfer Price Reduction Yield. If the Adjusted Funded
Amount is included in the calculation of the Company Transfer Price for any
Purchaser Interest, each Financial Institution agrees that the Agent shall pay
to Company the Reduction Percentage of any Yield received by the Agent with
respect to such Purchaser Interest.
Section 13.3 Payments to Company. In consideration for the reduction of
the Company Transfer Prices by the Company Transfer Price Reductions, effective
only at such time as the aggregate amount of the Capital of the Purchaser
Interests of the Financial Institutions equals the Company Residual, each
Financial Institution hereby agrees that the Agent shall not distribute to the
Financial Institutions and shall immediately remit to Company any Yield,
Collections or other payments received by it to be applied pursuant to the terms
hereof or otherwise to reduce the Capital of the Purchaser Interests of the
Financial Institutions.
Section 13.4 Limitation on Commitment to Purchase from Company.
Notwithstanding anything to the contrary in this Agreement, no Financial
Institution shall have any obligation to purchase any Purchaser Interest from
Company, pursuant to Section 13.1 or otherwise, if:
(i) Company shall have voluntarily commenced any
proceeding or filed any petition under any bankruptcy,
insolvency or similar law seeking the dissolution, liquidation
or reorganization of Company or taken any corporate action for
the purpose of effectuating any of the foregoing; or
(ii) involuntary proceedings or an involun tary
petition shall have been commenced or filed against Company by
any Person under any bankruptcy, insolvency or similar law
seeking the dissolution, liquidation or reorganization of
Company and such proceeding or petition shall have not been
dismissed.
Section 13.5 Defaulting Financial Institutions. If one or more
Financial Institutions defaults in its obligation to pay its Acquisition Amount
pursuant to Section 13.1 (each such Financial Institution shall be called a
"Defaulting Financial Institution" and the aggregate amount of such defaulted
obligations being herein called the "Company Transfer Price Deficit"), then upon
notice from the Agent, each Financial Institution other than the Defaulting
Financial Institutions (a "Non-Defaulting Financial Institution") shall promptly
pay to the Agent, in immediately available funds, an amount equal to the lesser
of (x) such Non-Defaulting Financial Institution's proportionate share (based
upon the relative Commitments of the Non-Defaulting Financial Institutions) of
the Company Transfer Price Deficit and (y) the unused portion of such
Non-Defaulting Financial Institution's Commitment. A Defaulting Financial
Institution shall forthwith upon demand pay to the Agent for the account of the
Non-Defaulting Financial Institutions all amounts paid by each Non- Defaulting
Financial Institution on behalf of such Defaulting Financial Institution,
together with interest thereon, for each day from the date a payment was made by
a Non-Defaulting Financial Institution until the date such Non-Defaulting
Financial Institution has been paid such amounts in full, at a rate per annum
equal to the Federal Funds Effective Rate plus two percent (2%). In addition,
without prejudice to any other rights that Company may have under applicable
law, each Defaulting Financial Institution shall pay to Company forthwith upon
demand, the difference between such Defaulting Financial Institution's unpaid
Acquisition Amount and the amount paid with respect thereto by the
Non-Defaulting Financial Institutions, together with interest thereon, for each
day from the date of the Agent's request for such Defaulting Financial
Institution's Acquisition Amount pursuant to Section 13.1 until the date the
requisite amount is paid to Company in full, at a rate per annum equal to the
Federal Funds Effective Rate plus two percent (2%).
Page 31
Section 13.6 Terminating Financial Institutions.
(a) Each Financial Institution hereby agrees to deliver
written notice to the Agent not more than 30 Business Days and not less
than 5 Business Days prior to the Liquidity Termination Date indicating
whether such Financial Institution intends to renew its Commitment
hereunder. If any Financial Institution fails to deliver such notice on
or prior to the date that is 5 Business Days prior to the Liquidity
Termination Date, such Financial Institution will be deemed to have
declined to renew its Commitment (each Financial Institution that has
declined or has been deemed to have declined to renew its Commitment
hereunder, a "Non-Renewing Financial Institu tion"). The Agent shall
promptly notify Company of each Non-Renewing Financial Institution and
Company, in its sole discretion, may (A) to the extent of Commitment
Availability, declare that such Non-Renewing Financial Institution's
Commitment shall, to such extent, automatically terminate on a date
specified by Company on or before the Liquidity Termination Date or (B)
upon one (1) Business Days' notice to such Non-Renewing Financial
Institution assign to such Non-Renewing Financial Institution on a date
specified by Company its Pro Rata Share of the aggregate Purchaser
Interests then held by Company, subject to, and in accordance with,
Section 13.1. In addition, Company may, in its sole discretion, at any
time (x) to the extent of Commitment Availability, declare that any
Affected Financial Institution's Commitment shall automatically
terminate on a date specified by Company or (y) assign to any Affected
Financial Institution on a date specified by Company its Pro Rata Share
of the aggregate Purchaser Interests then held by Company, subject to,
and in accordance with, Section 13.1 (each Affected Financial
Institution or each Non-Renewing Financial Institution is hereinafter
referred to as a "Terminating Financial Institution"). The parties
hereto expressly acknowledge that any declaration of the termination of
any Commitment, any assignment pursuant to this Section 13.6 and the
order of priority of any such termination or assignment among
Terminating Financial Institutions shall be made by Company in its sole
and absolute discretion.
(b) Upon any assignment to a Terminating Financial Institution
as provided in this Section 13.6, any remaining Commitment of such
Terminating Financial Institution shall automatically terminate. Upon
reduction to zero of the Capital of all of the Purchaser Interests of a
Terminating Financial Institution (after application of Collections
thereto pursuant to Sections 2.2 and 2.3) all rights and obligations of
such Terminating Financial Institution hereunder shall be terminated
and such Terminating Financial Institution shall no longer be a
"Financial Institution" hereunder; provided, however, that the
provisions of Article X shall continue in effect for its benefit with
respect to Purchaser Interests held by such Terminating Financial
Institution prior to its termination as a Financial Institution.
ARTICLE XIV
MISCELLANEOUS
Section 14.1 Waivers and Amendments. (a) No failure or delay on the
part of the Agent or any Purchaser in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other further
exercise thereof or the exercise of any other power, right or remedy. The rights
and remedies herein provided shall be cumulative and nonexclusive of any rights
or remedies provided by law. Any waiver of this Agreement shall be effective
only in the specific instance and for the specific purpose for which given.
(b) No provision of this Agreement may be amended,
supplemented, modified or waived except in writing in accordance with
the provisions of this Section 14.1(b). Company, Seller and the Agent,
at the direction of the Required Financial Institutions, may enter into
written modifications or waivers of any provisions of this Agreement,
provided, however, that no such modification or waiver shall:
Page 32
(i) without the consent of each affected Purchaser,
(A) extend the Liquidity Termination Date or the date of any
payment or deposit of Collections by Seller or the Servicer,
(B) reduce the rate or extend the time of payment of Yield or
any CP Costs (or any component of Yield or CP Costs), (C)
reduce any fee payable to the Agent for the benefit of the
Purchasers, (D) except pursuant to Article XII hereof, change
the amount of the Capital of any Purchaser, any Financial
Institution's Pro Rata Share (except pursuant to Sections 13.1
or 13.5) or any Financial Institution's Commitment, (E) amend,
modify or waive any provision of the definition of Required
Financial Institutions or this Section 14.1(b), (F) consent to
or permit the assignment or transfer by Seller or Servicer of
any of its rights and obligations under this Agreement, (G)
change the definition of "Eligible Receivable," "Loss
Percentage," "Dilution Reserve Percent age," "Servicer Reserve
Percentage," "Yield Reserve Percentage" or "Aggregate Reserve
Percentage," or (H) amend or modify any defined term (or any
defined term used directly or indirectly in such defined term)
used in clauses (A) through (G) above in a manner that would
circumvent the intention of the restrictions set forth in such
clauses; or
(ii) without the written consent of the then Agent,
amend, modify or waive any provision of this Agreement if the
effect thereof is to affect the rights or duties of such
Agent.
Notwithstanding the foregoing, (i) without the consent of the Financial
Institutions, but with the consent of Seller, the Agent may amend this Agreement
solely to add additional Persons as Financial Institutions hereunder and (ii)
the Agent, the Required Financial Institutions and Company may enter into
amendments to modify any of the terms or provisions of Article XI, Article XII
(exclusive of the first and last sentences of Section 12.1(a), the second
sentence of Section 12.1(b) and the second and third sentences of Section 12.2)
or Section 14.13 or any other provision of this Agreement without the consent of
Seller, provided that such amendment has no negative impact upon Seller. Any
modifica tion or waiver made in accordance with this Section 14.1 shall apply to
each of the Purchasers equally and shall be binding upon Seller, the Purchasers
and the Agent.
Section 14.2 Notices. Except as provided in this Section 14.2, all
communications and notices provided for hereunder shall be in writing (including
bank wire, telecopy or electronic facsimile transmission or similar writing) and
shall be given to the other parties hereto at their respective addresses or
telecopy numbers set forth on the signature pages hereof or at such other
address or telecopy number as such Person may hereafter specify for the purpose
of notice to each of the other parties hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon the receipt
thereof, (ii) if given by mail, three (3) Business Days after the time such
communication is deposited in the mail with first class postage prepaid or (iii)
if given by any other means, when received at the address specified in this
Section 14.2. Seller hereby authorizes the Agent to effect purchases and Tranche
Period and Discount Rate selections based on telephonic notices made by any
Person whom the Agent in good faith believes to be acting on behalf of Seller.
Seller agrees to deliver promptly to the Agent a written confirmation of each
telephonic notice signed by an authorized officer of Seller; provided, however,
the absence of such confirmation shall not affect the validity of such notice.
If the written confirmation differs from the action taken by the Agent, the
records of the Agent shall govern absent manifest error.
Page 33
Section 14.3 Ratable Payments. If any Purchaser, whether by setoff or
otherwise, has payment made to it with respect to any portion of the Aggregate
Unpaids owing to such Purchaser (other than payments received pursuant to
Section 10.2 or 10.3) in a greater propor tion than that received by any other
Purchaser entitled to receive a ratable share of such Aggregate Unpaids, such
Purchaser agrees, promptly upon demand, to purchase for cash without recourse or
warranty a portion of such Aggregate Unpaids held by the other Purchasers so
that after such purchase each Purchaser will hold its ratable proportion of such
Aggregate Unpaids; provided that if all or any portion of such excess amount is
thereafter recovered from such Purchaser, such purchase shall be rescinded and
the purchase price restored to the extent of such recovery, but without
interest.
Section 14.4 Protection of Ownership Interests of the Purchasers. (a)
Seller agrees that from time to time, at its expense, it will promptly execute
and deliver all instruments and documents, and take all actions, that may be
necessary or desirable, or that the Agent may reasonably request, to perfect,
protect or more fully evidence the Purchaser Interests, or to enable the Agent
or the Purchasers to exercise and enforce their rights and remedies hereunder.
Upon the occurrence and during the continuance of an Amortization Event, the
Agent may, or the Agent may direct Seller or the Servicer to, notify the
Obligors of Receivables, at Seller's expense, of the ownership or security
interests of the Purchasers under this Agreement and may also direct that
payments of all amounts due or that become due under any or all Receivables be
made directly to the Agent or its designee. Seller or the Servicer (as
applicable) shall, at any Purchaser's request, withhold the identity of such
Purchaser in any such notification.
(b) If any Seller Party fails to perform any of its obligations
hereunder, the Agent or any Purchaser may (but shall not be required to)
perform, or cause perfor ▇▇▇▇▇ of, such obligations, and the Agent's or such
Purchaser's costs and expenses incurred in connection therewith shall be payable
by Seller as provided in Section 10.3. Each Seller Party irrevocably authorizes
the Agent at any time and from time to time in the sole discretion of the Agent,
and appoints the Agent as its attorney-in-fact, to act on behalf of such Seller
Party (i) to execute on behalf of Seller as debtor and to file financing
statements necessary or desirable in the Agent's sole discretion to perfect and
to maintain the perfection and priority of the interest of the Purchasers in the
Receivables and (ii) to file a carbon, photographic or other reproduction of
this Agreement or any financing statement with respect to the Receivables as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority of
the interests of the Purchasers in the Receivables. This appointment is coupled
with an interest and is irrevocable.
Section 14.5 Confidentiality. (a) Each Seller Party and each Purchaser
shall maintain and shall cause each of its employees and officers to maintain
the confidentiality of this Agreement and the other confidential or proprietary
information with respect to the Agent and Company and their respective
businesses obtained by it or them in connection with the structuring,
negotiating and execution of the transactions contemplated herein, except that
such Seller Party and such Purchaser and its officers and employees may disclose
such information to such Seller Party's and such Purchaser's external
accountants and attorneys and as required by any applicable law or order of any
judicial or administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Seller Party
hereby consents to the disclosure of any nonpublic information with respect to
it (i) to the Agent, the Financial Institutions or Company by each other, (ii)
by the Agent or the Purchasers to any prospective or actual assignee or
participant of any of them and (iii) by the Agent to any rating agency,
Commercial Paper dealer or provider of a surety, guaranty or credit or liquidity
enhancement to Company or any entity organized for the purpose of purchasing, or
making loans secured by, financial assets for which Bank One acts as the
administrative agent and to any officers, directors, employees, outside
accountants and attorneys of any of the foregoing; provided, that each such
Person is informed of the confidential nature of such information. In addition,
the Purchasers and the Agent may disclose any such nonpublic information
pursuant to any 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).
Section 14.6 Bankruptcy Petition. Seller, the Servicer, the Agent and
each Financial Institution hereby covenants and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding senior
indebtedness of Company or any Unconditional Liquidity Provider, it will not
institute against, or join any other Person in instituting against, Company or
any such entity any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
Section 14.7 Limitation of Liability. Except with respect to any claim
arising out of the willful misconduct or gross negligence of Company, the Agent
or any Financial Institution, no claim may be made by any Seller Party or any
other Person against Company, the Agent or any Financial Institution or their
respective Affiliates, directors, officers, employees, attorneys or agents for
any special, indirect, consequential or punitive damages in respect of any claim
for breach of contract or any other theory of liability arising out of or
related to the transactions contemplated by this Agreement, or any act, omission
or event occurring in connection therewith; and each Seller Party hereby waives,
releases, and agrees not to ▇▇▇ upon any claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Page 34
Section 14.8 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOV ERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS
OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW) OF THE STATE
OF NEW YORK.
Section 14.9 CONSENT TO JURISDICTION. EACH SELLER PARTY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH PERSON PURSUANT TO THIS AGREEMENT AND EACH SELLER PARTY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETER MINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVE NIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY PURCHASER TO BRING
PROCEEDINGS AGAINST ANY SELLER PARTY IN THE COURTS OF ANY OTHER JURISDICTION.
ANY JUDICIAL PROCEEDING BY ANY SELLER PARTY AGAINST THE AGENT OR ANY PURCHASER
OR ANY AFFILIATE OF THE AGENT OR ANY PURCHASER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH SELLER PARTY PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 14.10 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY SELLER PARTY PURSUANT TO THIS
AGREEMENT OR THE RELA TIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER.
Page 35
Section 14.11 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain
the final and complete integration of all prior expressions by the
parties hereto with respect to the subject matter hereof and shall
constitute the entire agreement among the parties hereto with respect
to the subject matter hereof superseding all prior oral or written
understandings.
(b) This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns (including any trustee in bank ruptcy). 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 terminated in accordance with its terms;
provided, however, that the rights and remedies with respect to (i) any
breach of any repre sentation and warranty made by any Seller Party
pursuant to Article V, (ii) the indemnification and payment provisions
of Article X, and Sections 14.5 and 14.6 shall be continuing and shall
survive any termination of this Agreement.
Section 14.12 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counter parts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be as effective as delivery of a manually
executed counterpart to this Agreement. Any provisions of this Agreement that
are 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 hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Unless otherwise
expressly indicated, all references herein to "Article," "Section," "Schedule"
or "Exhibit" shall mean articles and sections of, and schedules and exhibits to,
this Agreement.
Section 14.13 Bank One Roles. Each of the Financial Institutions
acknowledges that Bank One acts, or may in the future act, (i) as administrative
agent for Company or any Financial Institution, (ii) as issuing and paying agent
for the Commercial Paper, (iii) to provide credit or liquidity enhancement for
the timely payment for the Commercial Paper and (iv) to provide other services
from time to time for Company or any Financial Institution (collectively, the
"Bank One Roles"). Without limiting the generality of this Section 14.13, each
Financial Institution hereby acknowledges and consents to any and all Bank One
Roles and agrees that in connection with any Bank One Role, Bank One may take,
or refrain from taking, any action that it, in its discretion, deems
appropriate, including, without limitation, in its role as administrative agent
for Company, and the giving of notice to the Agent of a mandatory purchase
pursuant to Section 13.1.
Section 14.14 Characterization. (a) It is the intention of the parties
hereto that each purchase hereunder shall constitute and be treated as an
absolute and irrevocable sale, which purchase shall provide the applicable
Purchaser with the full benefits of ownership of the applicable Purchaser
Interest. Except as specifically provided in this Agreement, each sale of a
Purchaser Interest hereunder is made without recourse to Seller; provided,
however, that (i) Seller shall be liable to each Purchaser and the Agent for all
representations, warranties, covenants and indemnities made by Seller pursuant
to the terms of this Agreement, and (ii) such sale does not constitute and is
not intended to result in an assumption by any Purchaser or the Agent or any
assignee thereof of any obligation of Seller, Originator or any Original Seller
or any other person arising in connection with the Receivables, the Related
Security, or the related Contracts, or any other obligations of Seller,
Originator or any Original Seller.
Page 36
(b) In addition to any ownership interest that the Agent may
from time to time acquire pursuant hereto, Seller hereby grants to the
Agent for the ratable benefit of the Purchasers a valid and perfected
security interest in all of Seller's right, title and interest in, to
and under all Receivables now existing or hereafter arising, the
Collections, each Lock-Box, each Collection Account, all Related
Security, all other rights and payments relating to such Receivables,
and all proceeds of any thereof prior to all other liens on and
security interests therein to secure the prompt and complete payment of
the Aggregate Unpaids. The Agent and the Purchasers shall have, in
addition to the rights and remedies that they may have under this
Agreement, all other rights and remedies provided to a secured creditor
under the UCC and other applicable law, which rights and remedies shall
be cumulative.
[SIGNATURE PAGES FOLLOW]
Page 37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
INTERFACE SECURITIZATION CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President, Treasurer and
Assistant Secretary
Address: c/o Interface, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INTERFACE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President,
CFO, Treasurer and
Assistant Secretary
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
JUPITER SECURITIZATION CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
Address: c/o Bank One, NA (Main
Office Chicago), as Agent
Asset Backed Finance
Suite IL1-0079, 1-19
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 38
BANK ONE, NA (MAIN OFFICE CHICAGO), as a
Financial Institution and as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: Bank One, NA (Main Office
Chicago)
Asset Backed Finance
Suite IL1-0596, 1-21
1 Bank ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Page 39
EXHIBIT I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Accrual Period" means each calendar month, provided that the initial
Accrual Period hereunder means the period from (and including) the date of the
initial purchase hereunder to (and including) the last day of the calendar month
thereafter.
"Acquisition Amount" means, on the date of any purchase from Company of
one or more Purchaser Interests pursuant to Section 13.1, (a) with respect to
each Financial Institution (other than any Unconditional Liquidity Provider),
the lesser of (i) such Financial Institution's Pro Rata Share of the sum of (A)
the lesser of (1) the Adjusted Liquidity Price of each such Purchaser Interest
and (2) the Capital of each such Purchaser Interest and (B) all accrued and
unpaid CP Costs for each such Purchaser Interest and (ii) such Financial
Institution's unused Commitment and (b) with respect to each Unconditional
Liquidity Provider, the lesser of (x) such Unconditional Liquidity Provider's
Pro Rata Share of the sum of (1) the Capital of each such Purchaser Interest and
(2) all accrued and unpaid CP Costs for each such Purchaser Interest and (y)
such Unconditional Liquidity Provider's unused Commitment.
"Adjusted Funded Amount" means, in determining the Company Transfer
Price for any Purchaser Interest, an amount equal to the sum of (a) the Adjusted
Liquidity Price of each such Purchaser Interest and (b) an amount equal to each
Unconditional Liquidity Provider's Pro Rata Share of the difference between (i)
the Adjusted Liquidity Price of each such Purchaser Interest and (ii) the
Capital of each such Purchaser Interest.
"Adjusted Liquidity Price" means an amount equal to:
| NDR |
RI | DC + ----- |
| 1.05 |
where:
RI = the undivided percentage interest evidenced by such
Purchaser Interest.
DC = the Deemed Collections.
NDR = the Outstanding Balance of all Receivables
as to which any pay ment, or part thereof,
has not remained unpaid for more than 120
days from the original due date for such
payment.
Each of the foregoing shall be determined from the most recent Monthly Report
received from the Servicer.
"Adverse Claim" means a lien, security interest, charge or encumbrance,
or other right or claim in, of or on any Person's assets or properties in favor
of any other Person, excluding, however, that certain delinquent tax liability
to the Georgia Department of Revenue, execution number REV 99049793A, in the
amount of $144,197,16, of Interface Flooring Systems, Inc, which delinquency is
being contested in good faith by appropriate proceedings.
Exh. I-1
"Affected Financial Institution" has the meaning specified in Section
12.1(c).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person or any Subsidiary of such Person, whether
through ownership of stock, by contract or otherwise. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person.
"Aged Receivables Ratio" means, as of any date of determination, a
percentage equal to (i) the aggregate Outstanding Balance of all Receivables
that were either (a) past due for more than 90 but less than 121 days from the
original due date as of the end of the fiscal month then most recently ended (or
ending on such date of determination), or (b) that were Charged-Off Receivables
(exclud ing, however, Receivables that were Charged-Off Receivables solely as a
result of sub-Section (v) of the definition of "Charged-Off Receivables") as of
such date, divided by (ii) the aggregate amount of net sales of the Original
Sellers during the third full fiscal month prior to such fiscal month.
"Agent" has the meaning set forth in the preamble to this Agreement.
"Aggregate Capital" means, on any date of determination, the aggregate
amount of Capital of all Purchaser Interests outstanding on such date.
"Aggregate Reduction" has the meaning specified in Section 1.3.
"Aggregate Reserve Percentage" means a percentage equal to the result
of the following calculation:
| DRP + LP |
| -------------- | + SRP + YRP
| ▇- ▇▇▇▇ + LP| |
where:
DRP = Dilution Reserve Percentage
LP = Loss Percentage
SRP = Servicer Reserve Percentage
YRP = Yield Reserve Percentage
"Aggregate Reserves" means, on any date of determination, an amount
equal to (i) the Aggregate Reserve Percentage multiplied by (ii) the aggregate
Capital as of the close of business of the Servicer on such date.
"Aggregate Unpaids" means, at any time, an amount equal to the sum of
all Aggregate Capital and all other unpaid Obligations (whether due or accrued)
at such time.
"Agreement" means this Receivables Purchase Agreement, as it may be
amended or modified and in effect from time to time.
Exh. I-2
"Amortization Date" means the earliest to occur of (i) the day on which
any of the conditions precedent set forth in Section 6.2 are not satisfied,
provided that Agent has not waived in writing the failure of any such condition
to be so satisfied, (ii) the Business Day immediately prior to the occurrence of
an Amortization Event set forth in Section 9.1(d)(i) or (ii), (iii) the Business
Day specified in a written notice from the Agent following the occurrence of any
other Amortization Event and (iv) the date that is 30 days after the Agent's
receipt of written notice from Seller that it wishes to terminate the facility
evidenced by this Agreement.
"Amortization Event" has the meaning specified in Article IX.
"Assignment Agreement" has the meaning set forth in Section 12.1(b).
"Authorized Officer" means, with respect to any Person, its president,
corporate controller, treasurer or chief financial officer.
"Bank One" means Bank One, NA (Main Office Chicago) in its individual
capacity and its successors.
"Broken Funding Costs" means for any Purchaser Interest that:
(i) has its Capital reduced without compliance by Seller with
the notice requirements hereunder or
(ii) does not become subject to an Aggregate Reduction
following the delivery of any Reduction Notice or
(iii) is assigned under Article XIII or terminated prior to
the date on which it was originally scheduled to end,
an amount equal to the excess, if any, of (A) the CP Costs or Yield (as
applicable) that would have accrued during the remainder of the Tranche
Periods or the tranche periods for Commercial Paper determined by the
Agent to relate to such Purchaser Interest (as applica ble) subsequent
to the date of such reduction, assignment or termination (or in respect
of clause (ii) above, the date such Aggregate Reduction was designated
to occur pursuant to the Reduction Notice) of the Capital of such
Purchaser Interest if such reduction, assignment or termination had not
occurred or such Reduction Notice had not been delivered, over (B) the
sum of (x) to the extent all or a portion of such Capital is allocated
to another Purchaser Interest, the amount of CP Costs or Yield actually
accrued during the remainder of such period on such Capital for the new
Purchaser Interest, and (y) to the extent such Capital is not allocated
to another Purchaser Interest, the income, if any, actually received
during the remainder of such period by the holder of such Purchaser
Interest from investing the portion of such Capital not so allocated.
In the event that the amount referred to in clause (B) exceeds the
amount referred to in clause (A), the relevant Purchaser or Purchasers
agree to pay to Seller the amount of such excess. All Broken Funding
Costs shall be due and payable hereunder upon demand.
"Business Day" means any day on which banks are not authorized or
required to close in New York, New York, Chicago, Illinois or Atlanta, Georgia,
and The Depository Trust Company of New York is open for business, and, if the
applicable Business Day relates to any computation or payment to be made with
respect to the LIBO Rate, any day on which dealings in dollar deposits are
carried on in the London interbank market.
Exh. I-3
"Capital" of any Purchaser Interest means, at any time, (A) the
Purchase Price of such Purchaser Interest, minus (B) the sum of the aggregate
amount of Collections and other payments received by the Agent that in each case
are applied to reduce such Capital in accordance with the terms and conditions
of this Agreement; provided that such Capital shall be restored (in accordance
with Section 2.5) in the amount of any Collections or other payments so received
and applied if at any time the distribution of such Collections or payments are
rescinded, returned or refunded for any reason.
"Change in Control Provision," including each of the defined terms used
within the definition thereof, has the meaning set forth in the Interface Credit
Facilities.
"Change of Control," including each of the defined terms used within
the definition thereof, has the meaning set forth in the Interface Credit
Facilities.
"Charged-Off Receivable" means a Receivable: (i) as to which the
Obligor thereof has taken any action, or suffered any event to occur, of the
type described in Section 9.1(d) (as if references to Seller Party therein refer
to such Obligor); (ii) as to which the Obligor thereof, if a natural person, is
deceased, (iii) that, consistent with the Credit and Collection Policy, would be
written off Seller's books as uncollectible, (iv) that has been identified by
Seller as uncollectible or (v) as to which any payment, or part thereof, remains
unpaid for 120 days or more from the original due date for such payment.
"Collection Account" means each concentration account, depositary
account, lock-box account or similar account in which any Collections are
collected or deposited and that is listed on Exhibit IV.
"Collection Account Agreement" means an agreement substantially in the
form of Exhibit VI among an Original Seller, Originator, Seller, the Agent and a
Collection Bank.
"Collection Bank" means, at any time, any of the banks holding one or
more Collection Accounts.
"Collection Notice" means a notice, in substantially the form of Annex
A to Exhibit VI, from the Agent to a Collection Bank.
"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" means promissory notes of Company issued by Company
in the commercial paper market.
"Commitment" means, for each Financial Institution, the commitment of
such Financial Institution to purchase Purchaser Interests from (i) Seller and
(ii) Company, in an amount not to exceed (i) in the aggregate, the amount set
forth opposite such Financial Institution's name on Schedule A to this
Agreement, as such amount may be modified in accordance with the terms hereof
(including, without limitation, any termination of Commitments pursuant to
Section 13.6 hereof) and (ii) with respect to any individual purchase hereunder,
its Pro Rata Share of the Purchase Price therefor.
Exh. I-4
"Commitment Availability" means at any time the positive difference (if
any) between (a) an amount equal to the aggregate amount of the Commitments
minus an amount equal to 2% of such aggregate Commitments at such time minus (b)
the Aggregate Capital at such time.
"Company" has the meaning set forth in the preamble to this Agreement.
"Company Residual" means the sum of the Company Transfer Price
Reductions.
"Company Transfer Price" means, with respect to the assignment by
Company of one or more Purchaser Interests to the Agent for the benefit of one
or more of the Financial Institutions pursuant to Section 13.1, the sum of (i)
the lesser of (a) the Capital of each such Purchaser Interest and (b) the
Adjusted Funded Amount of each such Purchaser Interest and (ii) all accrued and
unpaid CP Costs for each such Purchaser Interest.
"Company Transfer Price Deficit" has the meaning set forth in Section
13.5.
"Company Transfer Price Reduction" means in connection with the
assignment of a Purchaser Interest by Company to the Agent for the benefit of
the Financial Institutions, the positive difference (if any) between (i) the
Capital of such Purchaser Interest and (ii) the Adjusted Funded Amount for such
Purchaser Interest.
"Concentration Limit" means, at any time, for any Obligor, 1/3 of the
Minimum Loss Reserve Percentage of the Purchaser Interests, or such other amount
(a "Special Concentration Limit") for such Obligor designated by the Agent;
provided, (a) that in the case of an Obligor and any Affiliate of such Obligor,
the Concentration Limit shall be calculated as if such Obligor and such
Affiliate were one Obligor, (b) in the case of all Obligors that are the U.S.
federal government (including any departments, agencies or other divisions,
sections or sub-sections thereof), the Concentration Limit shall be calculated
as if such Obligors were one Obligor, (c) in the case of all Obligors that are
state or local governments (including any departments, agencies or other
divisions, sections or sub-sections thereof), the Concentration Limit shall be
calculated as if such Obligors were one Obligor and (d) in the case of all
Obligors that are citizens or residents of an OECD Country (other than the
United States), the Concentration Limit shall be calculated as if such Obligors
were one Obligor; and provided, further, that Company or the Required Financial
Institutions may, upon not less than five (5) Business Days' notice to Seller,
cancel any Special Concentration Limit.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit.
"Contract" means, with respect to any Receivable, any and all
instruments, agreements, invoices, purchase orders or other writings (which may
be electronic) pursuant to which such Receivable arises or that evidences such
Receivable.
"CP Costs" means, for each day, (i) the discount or yield accrued on
Pooled Commercial Paper on such day, plus (ii) any and all accrued commissions
in respect of placement agents and Commercial Paper dealers, and issuing and
paying agent fees incurred, in respect of such Pooled Commercial Paper for such
day, plus (iii) other costs associated with funding small or odd-lot amounts
with respect to all receivable purchase facilities that are funded by Pooled
Commercial Paper for such day, minus (iv) any accrual of income net of expenses
received on such day from investment
Exh. I-5
of collections received under all receivable purchase facilities funded
substantially with Pooled Commercial Paper, minus (v) any payment received on
such day net of expenses in respect of Broken Funding Costs related to the
prepayment of any Purchaser Interest of Company pursuant to the terms of any
receivable purchase facilities funded substantially with Pooled Commercial
Paper. In addition to the foregoing costs, if Seller shall request any
Incremental Purchase (other than the initial Incremental Purchase) during any
period of time determined by the Agent in its sole but reasonable discretion as
a result of the amount or timing of such Incremental Purchase to result in
incrementally higher CP Costs applicable to such Incremental Purchase, the
Capital associated with any such Incremental Purchase shall, during such period,
be deemed to be funded by Company in a special pool (which may include capital
associated with other receivable purchase facilities) for purposes of
determining such additional CP Costs applicable only to such special pool and
charged each day during such period against such Capital.
"Credit and Collection Policy" means each Original Seller's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit VIII hereto, as modified from time
to time in accordance with this Agreement.
"Deemed Collections" means the aggregate of all amounts Seller shall
have been deemed to have received as a Collection of a Receivable. Seller shall
be deemed to have received a Collection in full of a Receivable if at any time
(i) the Outstanding Balance of any such Receivable is either (x) reduced as a
result of any defective or rejected goods or services, any discount or any
adjustment or otherwise by Seller (other than cash Collections on account of the
Receivables) or (y) reduced or canceled as a result of a setoff in respect of
any claim by any Person (whether such claim arises out of the same or a related
transaction or an unrelated transaction) or (ii) any of the representations or
warranties in Article V are no longer true with respect to any Receivable or
(iii) the failure of any Contract with respect to such Receivable to create a
legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon.
"Default Fee" means with respect to any amount due and payable by
Seller in respect of any Aggregate Unpaids that is not paid when due, interest
at a rate per annum equal to 2% above the Prime Rate on any such unpaid amount.
"Default Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Defaulted Receivables
at such time divided by (ii) the aggregate Outstanding Balance of all
Receivables at such time.
"Defaulted Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for more than 120 days from the original due date
for such payment.
"Defaulting Financial Institution" has the meaning set forth in Section
13.5.
"Delinquency Ratio" means, at any time, a percentage equal to (i) the
aggregate Outstanding Balance of all Receivables that were Delinquent
Receivables at such time divided by (ii) the aggregate Outstanding Balance of
all Receivables at such time.
"Delinquent Receivable" means a Receivable as to which any payment, or
part thereof, remains unpaid for more than 60 but less than 121 days or more
from the original due date for such payment.
"Designated Obligor" means an Obligor indicated by the Agent to Seller
in writing.
Exh. I-6
"Dilution Ratio" means, as at the end of any fiscal month, a percentage
equal to (i) the aggregate amount of all Dilutions arising during such fiscal
month divided by (ii) the aggregate amount of net sales by the Original Sellers
for the fiscal month ending one fiscal month prior to such fiscal month.
"Dilution Reserve Percentage" means the greater of (a) 6.00% and (b)
the following:
(2 X ED + ((DS-ED) X (DS/ED))) X DHR
where:
ED = the average of the Dilution Ratios for the twelve most
recently-ended fiscal months
DS = the highest of the average Dilution Ratios for any
three-fiscal-month period occurring during the twelve most
recently-ended fiscal months
DHR = the result of dividing the aggregate amount of all net
sales by the Original Sellers during the prior one fiscal
months by the Outstanding Balance of all Eligible Receivables.
"Dilutions" means, at any time, the aggregate amount of reductions or
cancellations described in clause (i) of the definition of "Deemed Collections".
"Discount Rate" means, the LIBO Rate or the Prime Rate, as applicable,
with respect to each Purchaser Interest of the Financial Institutions.
"Eligible Receivable" means, at any time, a Receivable:
(i) the Obligor of which (a) if a natural person, is a
resident of the United States or, (b) if a corporation or other
non-governmental business organization, (1) is organized under the laws
of the United States or any political subdivision thereof and has its
chief executive office in the United States or (2) is organized under
the laws of an OECD Country and has its chief executive office in such
OECD Country or (c) if a government or a governmental subdivision or
agency, is a U.S. federal, state, municipal or county government or a
subdivi sion or agency thereof, including any military branch of the
U.S. federal government;
(ii) is not an Affiliate of any of the parties hereto and is
not a Designated Obligor;
(iii) the Obligor of which is not the Obligor of Defaulted
Receivables the aggregate Outstanding Balance of which constitutes more
than 10% of the aggregate Outstanding Balance of all Receivables of
such Obligor,
(iv) that is not a Charged-Off Receivable or a Delinquent
Receivable,
(v) that by its terms is due and payable either (A) within 30
days of the original billing date therefor or (B) within 60 days of the
original billing date therefor so long the Outstanding Balance of such
Receivable, when aggregated with the Outstanding Balances of all other
Receivables that are due and payable within 60 days of the original due
date therefor, does not exceed 10% of the Outstanding Balance of all
Receivables, and in each case has not had its payment terms extended,
Exh. I-7
(vi) that is an "account" or "chattel paper" within the
meaning of Section 9-105 and Section 9-106, respectively, of the UCC of
all applicable jurisdictions,
(vii) that is denominated and payable only in United States
dollars in the United States,*
(viii) that arises under a Contract that, together with such
Receivable, is in full force and effect and constitutes the legal,
valid and binding obligation of the related Obligor enforceable against
such Obligor in accordance with its terms subject to no offset, counter
claim or other defense,
(ix) that arises under a Contract that (A) does not require
the Obligor under such Contract to consent to the transfer, sale or
assignment of the rights and duties of the Original Seller thereof or
any of its assignees under such Contract and (B) does not contain a
confidentiality provision that purports to restrict the ability of any
Purchaser to exercise its rights under this Agreement, including,
without limitation, its right to review the Contract,
(x) that arises under a Contract that contains an obligation
to pay a specified sum of money, contingent only upon the sale of goods
or the provision of services by the Original Seller thereof,
(xi) that, together with the Contract related thereto, does
not contravene any law, rule or regulation applicable thereto
(including, without limitation, any law, rule and regulation relating
to truth in lending, fair credit billing, fair credit reporting, equal
credit opportunity, fair debt collection practices and privacy) and
with respect to which no part of the Contract related thereto is in
violation of any such law, rule or regulation,
(xii) that satisfies all applicable requirements of the Credit
and Collection Policy,
(xiii) that was generated in the ordinary course of business
of the Original Seller thereof,
(xiv) that arises solely from the sale of goods or the
provision of services to the related Obligor by the Original Seller
thereof, and not by any other Person (in whole or in part),
(xv) as to which the Agent has given Seller at least two (2)
Business Days' prior written notice that the Agent has determined that
such Receivable or class of Receivables is not acceptable as an
Eligible Receivable, including, without limitation, because such
Receivable arises under a Contract that is not acceptable to the Agent;
provided, however, that no Receivable shall be considered to be other
than an Eligible Receivable pursuant to the foregoing if such
Receivable was an Eligible Receivable on the later of the date hereof
or the date on which such Receivable was purchased by Seller under the
Receivables Sale Agree ment,
(xvi) that is not subject to any right of rescission, set-off,
counterclaim, any other defense (including defenses arising out of
violations of usury laws) of the applicable Obligor against the
Original Seller thereof or any other Adverse Claim, and the Obligor
thereon holds no right as against such Original Seller to cause such
Original Seller to repurchase the goods or merchandise the sale of
which shall have given rise to such Receivable (except with respect to
Exh. I-8
sale discounts effected pursuant to the Contract, or defective goods
returned in accordance with the terms of the Contract),
(xvii) as to which the Original Seller thereof 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 thereto other than
payment thereon by the applicable Obligor,
(xviii) all right, title and interest to and in which has been
validly transferred by the Original Seller thereof directly to
Originator under and in accordance with the Transfer Agreement, and by
Originator directly to Seller under and in accordance with the Receiv
▇▇▇▇▇ Sale Agreement, and Seller has good and marketable title thereto
free and clear of any Adverse Claim, and
(xix) that represents all or part of the sales price of
merchandise, insurance and services within the meaning of Section
3(c)(5) of the Investment Company Act of 1940, as amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Existing Agreements" has the meaning set forth in the Receivables Sale
Agreement.
"Existing Receivables" has the meaning set forth in the Receivables
Sale Agreement.
"Facility Account" means Seller's Account No. 10-72750 at Bank One.
"Facility Termination Date" means the earliest of (i) the Liquidity
Termination Date and (ii) the Amortization Date.
"Federal Bankruptcy Code" means Title 11 of the United States Code
entitled "Bankruptcy," as amended and any successor statute thereto.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum for each day during such period equal to (a) the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day that is a Business Day, the average of the quotations at
approximately 10:30 a.m. (Chicago time) for such day on such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by it.
"Fee Letter" means that certain letter agreement dated as of the date
hereof between Seller and the Agent, as it may be amended or modified and in
effect from time to time.
"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.
"Financial Institutions" has the meaning set forth in the preamble in
this Agreement.
"Funding Agreement" means this Agreement and any agreement or
instrument executed by any Funding Source with or for the benefit of Company.
Exh. I-9
"Funding Source" means (i) any Financial Institution or (ii) any
insurance company, bank or other funding entity providing liquidity, credit
enhancement or back-up purchase support or facilities to Company.
"GAAP" means generally accepted accounting principles in effect in the
United States of America as of the date of this Agreement.
"Incremental Purchase" means a purchase of one or more Purchaser
Interests that increases the total outstanding Aggregate Capital hereunder.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations that are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under
interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and
(viii) liabilities in respect of unfunded vested benefits under plans covered by
Title IV of ERISA.
"Independent Director" shall mean a member of the Board of Directors of
Seller who is not at such time, and has not been at any time during the
preceding five (5) years, (A) a director, officer, employee or affiliate of
Originator or any Original Seller, or any of their respective Subsidiaries or
Affiliates (other than Seller), or (B) the beneficial owner (at the time of such
individual's appointment as an Independent Director or at any time thereafter
while serving as an Independent Director) of any of the outstanding common
shares of Seller, Originator or any Original Seller, or any of their respective
Subsidiaries or Affiliates (other than Seller), having general voting rights.
"Interface Control Debt," including each of the defined terms used
within the definition thereof, has the meaning set forth in the Interface Credit
Facilities.
"Interface Credit Facilities" means that certain Third Amended and
Restated Credit Agreement dated as of June 30, 1998, by and among Interface,
Interface Europe B.V., Interface Europe Limited, and each other "Foreign
Subsidiary" (as defined therein) that becomes a "Multicurrency Borrower" (as
defined therein), as in effect on the date hereof (and without giving effect to
any subsequent amendments, restatements or other modifications thereof).
"LIBO Rate" means the rate per annum equal to the sum of (i) (a) the
applicable British Bankers' Association Interest Settlement Rate for deposits in
U.S. dollars appearing on Reuters Screen FRBD as of 11:00 a.m. (London time) two
Business Days prior to the first day of the relevant Tranche Period, and having
a maturity equal to such Tranche Period, provided that, (i) if Reuters Screen
FRBD is not available to the Agent for any reason, the applicable LIBO Rate for
the relevant Tranche Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Tranche Period,
and having a maturity equal to such Tranche Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available to the Agent, the
applicable LIBO Rate for the relevant Tranche Period shall instead be the rate
determined by the Agent to be the rate at which Bank One offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Tranche Period, in the approximate amount to be funded at the LIBO
Rate and having a maturity equal to such Tranche Period, divided by (b) one
minus the maximum aggregate reserve requirement (including all basic,
supplemental, marginal or other reserves) that is imposed against the Agent in
respect of Eurocurrency liabilities, as defined in Regulation D of the Board of
Governors of the Federal Reserve System as in effect from time to time
(expressed as a decimal), applicable to such Tranche Period plus (ii) 1.00% per
annum. The LIBO Rate shall be rounded, if necessary, to the next higher 1/16 of
1%.
Exh. I-10
"Liquidity Termination Date" means December 18, 2001.
--------------------------
"Lock-Box" means each locked postal box with respect to which a bank
who has executed a Collection Account Agreement has been granted exclusive
access for the purpose of retrieving and processing payments made on the
Receivables and that is listed on Exhibit IV.
"Loss Percentage" means, at any time, a percentage equal to the greater
of (a) the Minimum Loss Reserve Percentage and (b) the following:
2.0 X ARR X S
where:
ARR = the highest of the average Aged Receivables Ratios
for any three-fiscal-month period occurring during
the twelve most recently-ended fiscal months
S = the result of dividing the aggregate amount of all
net sales by the Original Sellers during the prior
three fiscal months by the Outstanding Balance of all
Eligible Receivables originated by the Original
Sellers and outstanding as of the last day of the
fiscal month then most recently ended (or ending on
such date of determination)
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition or operations of any Seller Party and its Subsidiaries, (ii)
the ability of any Seller Party to perform its obligations under this Agreement,
(iii) the legality, validity or enforceability of this Agreement or any other
Transaction Document, (iv) any Purchaser's interest in the Receivables generally
or in any significant portion of the Receivables, the Related Security or the
Collections with respect thereto, or (v) the collectibility of the Receivables
generally or of any material portion of the Receivables.
"Minimum Loss Reserve Percentage" means 10.0%.
"Monthly Report" means a report, in substantially the form of Exhibit X
hereto (appropri ately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Monthly Settlement Date" means (A) the sixth Business Day of each
month, and (B) the last day of the relevant Tranche Period in respect of each
Purchaser Interest of the Financial Institutions.
"Most Recent Report" means, on any date, the Weekly Report that was
most recently due on or before such date pursuant to Section 8.5; provided,
however, that if, during any calendar week, a Monthly Report is due on a date
that is later than the date on which such Weekly Report was due, the "Most
Recent Report" shall be such Monthly Report.
"Net Receivables Balance" means, at any time, the aggregate Outstanding
Balance of all Eligible Receivables at such time reduced by the aggregate amount
by which the Outstanding Balance of all Eligible Receivables of each Obligor and
its Affiliates exceeds the Concentration Limit for such Obligor.
"Non-Defaulting Financial Institution" has the meaning set forth in
Section 13.5.
Exh. I-11
"Non-Renewing Financial Institution" has the meaning set forth in
Section 13.6(a).
"Obligations" shall have the meaning set forth in Section 2.1.
"Obligor" means a Person obligated to make payments pursuant to a
Contract.
"OECD Country" means a country that is a member of the Organisation for
Economic Co-operation and Development.
"Original Sellers" means each of (a) Bentley ▇▇▇▇▇, Inc., (b) Chatham
Marketing Co., (c) Guilford of Maine Marketing Co., (d) Intek Marketing Co., (e)
Interface Architectural Resources, Inc., (f) Interface Flooring Systems, Inc.,
(g) Pandel, Inc., (h) Prince Street Technologies, Ltd. and (i) Toltec Fabrics,
Inc., in its respective capacity as seller under the Transfer Agreement.
"Originator" means Interface, Inc., in its capacity as seller under the
Receivables Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the then
outstanding principal balance thereof.
"Participant" has the meaning set forth in Section 12.2.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"Pooled Commercial Paper" means Commercial Paper notes of Company
subject to any particular pooling arrangement by Company, but excluding
Commercial Paper issued by Company for a tenor and in an amount specifically
requested by any Person in connection with any agreement effected by Company.
"Potential Amortization Event" means an event that, with the passage of
time or the giving of notice, or both, would constitute an Amortization Event.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Proposed Reduction Date" has the meaning set forth in Section 1.3.
"Pro Rata Share" means, for each Financial Institution, a percentage
equal to (i) the Commitment of such Financial Institution, divided by (ii) the
aggregate amount of all Commitments of all Financial Institutions hereunder,
adjusted as necessary to give effect to the application of the terms of Sections
13.5 or 13.6.
"Purchase Limit" means $65,000,000.
"Purchase Notice" has the meaning set forth in Section 1.2.
"Purchase Price" means, with respect to any Incremental Purchase of a
Purchaser Interest, the amount paid to Seller for such Purchaser Interest that
shall not exceed the least of (i) the amount requested by Seller in the
applicable Purchase Notice, (ii) the unused portion of the Purchase Limit on the
applicable purchase date and (iii) the excess, if any, of the Net Receivables
Balance (less the Aggregate Reserves) on the applicable purchase date over the
aggregate outstanding amount of Aggregate Capital determined as of the date of
the Most Recent Report, taking into account such proposed Incremental Purchase.
Exh. I-12
"Purchasers" means Company and each Financial Institution.
"Purchaser Interest" means, at any time, an undivided percentage
ownership interest (computed as set forth below) associated with a designated
amount of Capital, selected pursuant to the terms and conditions hereof in (i)
each Receivable arising prior to the time of the most recent computation or
recomputation of such undivided interest, (ii) all Related Security with respect
to each such Receivable, and (iii) all Collections with respect to, and other
proceeds of, each such Receivable. Each such undivided percentage interest shall
equal:
C + AR
------
NRB
where:
C = the Capital of such Purchaser Interest.
AR = the Aggregate Reserves.
NRB = the Net Receivables Balance.
Such undivided percentage ownership interest shall be initially computed on its
date of purchase. Thereafter, until the Amortization Date, each Purchaser
Interest shall be automatically recomputed (or deemed to be recomputed) on each
day prior to the Amortization Date. The variable percentage represented by any
Purchaser Interest as computed (or deemed recomputed) as of the close of the
business day immediately preceding the Amortization Date shall remain constant
at all times thereafter.
"Purchasing Financial Institution" has the meaning set forth in Section
12.1(b).
"Receivable" means all indebtedness and other obligations owed to
Seller, Originator or an Original Seller (at the time it arises, and before
giving effect to any transfer or conveyance under the Transfer Agreement, the
Receivables Sale Agreement or hereunder) or in which Seller, Originator or an
Original Seller has a security interest or other interest, including, without
limitation, any indebted ness, obligation or interest constituting an account,
chattel paper, instrument or general intangible, arising in connection with the
sale of goods or the rendering of services by the Original Seller thereof, and
further includes, without limitation, the obligation to pay any Finance Charges
with respect thereto. Indebtedness and other rights and obligations arising from
any one transaction, including, without limitation, indebtedness and other
rights and obligations represented by an individual invoice, shall constitute a
Receivable separate from a Receivable consisting of the indebtedness and other
rights and obligations arising from any other transaction; provided further,
that any indebtedness, rights or obligations referred to in the immediately
preceding sentence shall be a Receivable regardless of whether the account
debtor or Seller treats such indebtedness, rights or obligations as a separate
payment obligation.
Exh. I-13
"Receivables Sale Agreement" means that certain Receivables Sale
Agreement, dated as of December 19, 2000, between Originator and Seller, as the
same may be amended, restated or otherwise modified from time to time.
"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.
"Reduction Notice" has the meaning set forth in Section 1.3.
"Reduction Percentage" means, for any Purchaser Interest acquired by
the Financial Institutions from Company for less than the Capital of such
Purchaser Interest, a percentage equal to a fraction the numerator of which is
the Company Transfer Price Reduction for such Purchaser Interest and the
denominator of which is the Capital of such Purchaser Interest.
"Regulatory Change" has the meaning set forth in Section 10.2(a).
"Reinvestment" has the meaning set forth in Section 2.2.
"Related Security" means, with respect to any Receivable:
(i) all of Seller's interest in the inventory and goods
(including returned or repossessed inventory or goods), if any, the
sale or financing of which by the Original Seller thereof gave rise to
such Receivable, and all insurance contracts with respect thereto,
(ii) all other security interests or liens and property
subject thereto from time to time, if any, purporting to secure payment
of such Receivable, whether pursuant to the Contract related to such
Receivable or otherwise, together with all financing statements and
security agreements describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time
supporting or securing payment of such Receivable whether pursuant to
the Contract related to such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of Seller's right, title and interest in, to and
under the Receivables Sale Agreement and the Transfer Agreement in
respect of such Receivable, and
(viii) all proceeds of any of the foregoing.
"Required Financial Institutions" means, at any time, Financial
Institutions with Commit ments in excess of 66-2/3% of the Purchase Limit.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of Seller now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock or in any junior class of stock of
Seller, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of capital stock of Seller now or hereafter outstanding,
Exh. I-14
(iii) any payment or prepayment of principal of, premium, if any, or interest,
fees or other charges on or with respect to, and any redemption, purchase,
retirement, defeasance, sinking fund or similar payment and any claim for
rescission with respect to the Subordinated Loan (as defined in the Receivables
Sale Agreement), (iv) any payment made to redeem, purchase, repurchase or
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of capital stock of Seller now or
hereafter outstanding, and (v) any payment of management fees by Seller (except
for reasonable management fees to Originator or its Affiliates in reimbursement
of actual management services performed).
"Seller" has the meaning set forth in the preamble to this Agreement.
"Seller Parties" has the meaning set forth in the preamble to this
Agreement.
"Servicer" means at any time the Person (which may be the Agent) then
authorized pursuant to Article VIII to service, administer and collect
Receivables.
"Servicer Reserve Percentage" means 1%.
"Servicing Fee" has the meaning set forth in Section 8.6.
"Settlement Date" means the Monthly Settlement Date; provided, however,
that in the event that at any time the Net Receivables Balance, as reported on
any Weekly Report, shall be less than an amount equal to the sum of (i) the
Aggregate Capital plus (ii) the Aggregate Reserves, the Settlement Date means
the second Business Day after the Business Day on which such Weekly Report was
due.
"Settlement Period" means (A) in respect of each Purchaser Interest of
Company, the immediately preceding Accrual Period, and (B) in respect of each
Purchaser Interest of the Financial Institutions, the entire Tranche Period of
such Purchaser Interest.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, limited liability company, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all refer ences herein to a "Subsidiary"
shall mean a Subsidiary of Seller.
"Termination Date" has the meaning set forth in Section 2.2.
"Termination Percentage" has the meaning set forth in Section 2.2.
"Terminating Financial Institution" has the meaning set forth in
Section 13.6(a).
"Terminating Tranche" has the meaning set forth in Section 4.3(b).
"Tranche Period" means, with respect to any Purchaser Interest held by
a Financial Institution:
(a) if Yield for such Purchaser Interest is calculated on the
basis of the LIBO Rate, a period of one, two, three or six months, or
such other period as may be mutually agreeable to the Agent and Seller,
commencing on a Business Day selected by Seller or the Agent pursuant
to this Agreement. Such Tranche Period shall end on the day in the
applicable succeeding calendar month that corresponds numerically to
the beginning day of such Tranche Period, provided, however, that if
there is no such numerically corresponding day in such succeeding
month, such Tranche Period shall end on the last Business Day of such
succeeding month; or
Exh. I-15
(b) if Yield for such Purchaser Interest is calculated on the
basis of the Prime Rate, a period commencing on a Business Day selected
by Seller and agreed to by the Agent, provided no such period shall
exceed one month.
If any Tranche Period would end on a day that is not a Business Day, such
Tranche Period shall end on the next succeeding Business Day, provided, however,
that in the case of Tranche Periods corresponding to the LIBO Rate, if such next
succeeding Business Day falls in a new month, such Tranche Period shall end on
the immediately preceding Business Day. In the case of any Tranche Period for
any Purchaser Interest that commences before the Amortization Date and would
otherwise end on a date occurring after the Amortization Date, such Tranche
Period shall end on the Amortiza tion Date. The duration of each Tranche Period
that commences after the Amortization Date shall be of such duration as selected
by the Agent.
"Transaction Documents" means, collectively, this Agreement, each
Purchase Notice, the Transfer Agreement the Receivables Sale Agreement, each
Collection Account Agreement, the Fee Letter and the Subordinated Notes (as
defined in the Receivables Sale Agreement), and all other instruments, documents
and agreements executed and delivered in connection herewith.
"Transfer Agreement" has the meaning set forth in the Receivables Sale
Agreement.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the specified jurisdiction.
"Unconditional Liquidity Provider" means a Financial Institution that
is identified by the Agent or by Bank One as an entity that will not under any
circumstance receive any Company Transfer Price Reduction hereunder.
"Weekly Report" means a report, in substantially the form of Exhibit XI
hereto (appropri ately completed), furnished by the Servicer to the Agent
pursuant to Section 8.5.
"Yield" means for each respective Tranche Period relating to Purchaser
Interests of the Financial Institutions, an amount equal to the product of the
applicable Discount Rate for each Purchaser Interest multiplied by the Capital
of such Purchaser Interest for each day elapsed during such Tranche Period,
annualized on a 360 day basis.
"Yield Reserve Percentage" means 2-1/2 % (two and one-half percent).
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
Exh. I-16