EXHIBIT 10.25
RECEIVABLES SALE AGREEMENT
DATED AS OF FEBRUARY 12, 2003
AMONG
INTERFACE, INC.,
AS SELLER,
AND
INTERFACE SECURITIZATION CORPORATION,
AS BUYER
TABLE OF CONTENTS
PAGE
ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASE......................................................................2
Section 1.1 Purchase of Receivables.......................................................................2
Section 1.2 Payment for the Purchase......................................................................3
Section 1.3 Purchase Price Credit Adjustments.............................................................4
Section 1.4 Payments and Computations, Etc................................................................5
Section 1.5 Transfer of Records...........................................................................5
Section 1.6 Characterization..............................................................................5
ARTICLE II. REPRESENTATIONS AND WARRANTIES........................................................................6
Section 2.1 Representations and Warranties of Interface...................................................6
ARTICLE III. CONDITIONS OF PURCHASE...............................................................................9
Section 3.1 Conditions Precedent to Purchase..............................................................9
Section 3.2 Conditions Precedent to Subsequent Payments...................................................9
ARTICLE IV. COVENANTS............................................................................................10
Section 4.1 Affirmative Covenants of Interface...........................................................10
Section 4.2 Negative Covenants of Interface..............................................................15
ARTICLE V. TERMINATION EVENTS....................................................................................17
Section 5.1 Termination Events...........................................................................17
Section 5.2 Remedies.....................................................................................19
ARTICLE VI. INDEMNIFICATION......................................................................................19
Section 6.1 Indemnities by Interface.....................................................................19
Section 6.2 Other Costs and Expenses.....................................................................21
ARTICLE VII. MISCELLANEOUS.......................................................................................22
Section 7.1 Waivers and Amendments.......................................................................22
Section 7.2 Notices......................................................................................22
Section 7.3 Protection of Ownership Interests of SPV.....................................................22
Section 7.4 Confidentiality..............................................................................23
Section 7.5 Bankruptcy Petition..........................................................................24
Section 7.6 Limitation of Liability......................................................................24
Section 7.7 CHOICE OF LAW................................................................................24
Section 7.8 CONSENT TO JURISDICTION......................................................................24
Section 7.9 WAIVER OF JURY TRIAL.........................................................................25
Section 7.10 Integration; Binding Effect; Survival of Terms...............................................25
Section 7.11 Counterparts; Severability; Section References...............................................25
Section 7.12 Subordination................................................................................26
Exhibits and Schedules
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records;
Federal Employer Identification Number and Organizational
Identification Number
Exhibit III - LockBoxes; LockBox Accounts; Collection Banks
Exhibit IV - Form of Compliance Certificate
Exhibit V - Credit and Collection Policies
Exhibit VI - [Intentionally Omitted.]
Exhibit VII - Form of Subordinated Note
Schedule A List of Documents to Be Delivered to SPV Prior to the
Purchase
RECEIVABLES SALE AGREEMENT
THIS RECEIVABLES SALE AGREEMENT, dated as of February 12,
2003, is by and between Interface, Inc., a Georgia corporation ("INTERFACE")
and Interface Securitization Corporation, a Delaware corporation ("SPV").
Unless defined elsewhere herein, capitalized terms used in this Agreement shall
have the meanings assigned to such terms in Exhibit I hereto (or, if not
defined in Exhibit I hereto, the meaning assigned to such term in the Transfer
Agreement or the Loan Agreement, as applicable).
PRELIMINARY STATEMENTS
Interface wishes to sell or contribute to SPV and SPV wishes
to purchase or otherwise acquire from Interface, all of Interface's
right, title and interest in and to the Receivables, Related Security
and Collections purchased by Interface pursuant to the terms of the
Receivables Transfer Agreement of even date herewith by and among
Interface Fabrics Group Marketing, Inc., a Nevada corporation
("INTERFACE MARKETING"), Interface Teknit, Inc., a Michigan
corporation ("INTERFACE TEKNIT"), Interface TekSolutions, LLC, a
Michigan limited liability company ("INTERFACE TEKSOLUTIONS"), Pandel,
Inc., a Georgia corporation ("PANDEL"), Interface Americas, Inc., a
Georgia corporation ("INTERFACE AMERICAS," each of Interface
Marketing, Interface Teknit, Interface TekSolutions, Pandel and
Interface Americas, an "ORIGINAL SELLER" and, collectively, the
"ORIGINAL SELLERS"), and Interface (as amended, restated or otherwise
modified from time to time, the "TRANSFER AGREEMENT") in accordance
with the terms hereof.
Each of Interface and SPV intends the transactions
contemplated hereby to be true sales of the Receivables from Interface
to SPV, providing SPV with the full benefits of ownership of the
Receivables, and neither Interface nor SPV intends these transactions
to be, or for any purpose to be characterized as, loans from SPV to
Interface.
Following the sale and contribution of Receivables by
Interface, SPV will grant a security interest in the Receivables,
Related Security and Collections pursuant to that certain Loan
Agreement dated as of the date hereof (as the same may from time to
time hereafter be amended, supplemented, restated or otherwise
modified, the "LOAN AGREEMENT") among SPV, Interface, as Servicer,
Three Pillars Funding Corporation ("LENDER"), and SunTrust Capital
Markets, Inc. or any successor administrator appointed pursuant to the
terms of the Loan Agreement, as agent and administrator for Lender (in
such capacity, the "ADMINISTRATOR").
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual agreements herein contained and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables.
(a) Effective on the date hereof, in consideration for
the Purchase Price and upon the terms and subject to the conditions set forth
herein, Interface does hereby sell, assign, transfer, set-over and otherwise
convey to SPV, without recourse (except to the extent expressly provided
herein), and SPV does hereby purchase from Interface, all of Interface's right,
title and interest in and to all Receivables arising on or after the date
hereof through and including the Termination Date, together, in each case, with
all Related Security relating thereto and all Collections thereof. In
accordance with the preceding sentence, on the date hereof SPV shall acquire
all of Interface's right, title and interest in and to all Receivables existing
as of the close of business on the Business Day immediately prior to the date
hereof and thereafter arising through and including the Termination Date,
together with all Related Security relating thereto and all Collections
thereof. SPV shall be obligated to pay the Purchase Price for the Receivables
purchased hereunder in accordance with Section 1.2. In connection with
consummation of the Purchase Price for any Receivables purchased hereunder, SPV
may request that Interface deliver, and Interface shall deliver, such
approvals, opinions, information, reports or documents as SPV may reasonably
request.
(b) It is the intention of the parties hereto that the
Purchase of Receivables made hereunder shall constitute a sale, which sale is
absolute and irrevocable and provides SPV with the full benefits of ownership
of the Receivables. Except for the Purchase Price Credits owed pursuant to
Section 1.3, the sale of Receivables hereunder is made without recourse to
Interface; provided, however, that (i) Interface shall be liable to SPV for all
representations, warranties, covenants and indemnities made by Interface
pursuant to the terms of the Transaction Documents to which Interface is a
party, and (ii) such sale does not constitute and is not intended to result in
an assumption by SPV or any assignee thereof of any obligation of Interface or
any other Person arising in connection with the Receivables, the related
Contracts and/or other Related Security or any other obligations of Interface.
In view of the intention of the parties hereto that the Purchase of Receivables
made hereunder shall constitute a sale of such Receivables rather than loans
secured thereby, Interface agrees that it will, on or prior to the date hereof
and in accordance with Section 4.1(e)(ii), ▇▇▇▇ its master data processing
records relating to the Receivables with a legend acceptable to SPV and to the
Administrator (as SPV's secured party), evidencing that SPV has purchased such
Receivables as provided in this Agreement and to note in its financial
statements that its Receivables have been sold to SPV. Upon the request of SPV
or the Administrator (as SPV's secured party), Interface will duly authorize
the filing of such financing or continuation statements, or amendments thereto
or assignments thereof, and such other instruments or notices, as may be
necessary or appropriate to perfect and maintain the perfection of SPV's
ownership interest in the Receivables and the Related Security and Collections
with respect thereto, or as SPV or the Administrator (as SPV's secured party)
may reasonably request.
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Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Purchase of Receivables
in existence on the close of business on the date hereof (the "INITIAL CUTOFF
DATE") shall be payable in full by SPV to Interface on the date hereof, and
shall be paid to Interface in the following manner:
(i) by delivery of immediately available funds,
to the extent of funds made available to SPV under the Loan Agreement
(after giving effect to the payment of any amounts required to
terminate the Original Receivables Purchase Agreement and the Original
Receivables Sale Agreement); and
(ii) the balance, by delivery of the proceeds of
a subordinated revolving loan from Interface to SPV (a "SUBORDINATED
LOAN") in an amount not to exceed the least of (A) the remaining
unpaid portion of such Purchase Price, (B) the maximum Subordinated
Loan that could be borrowed without rendering SPV's Net Worth less
than the Required Capital Amount and (C) the maximum Subordinated Loan
that could be borrowed without rendering the Net Value less than the
aggregate outstanding principal balance of the Subordinated Loans
(including the Subordinated Loan proposed to be made on such date).
Interface is hereby authorized by SPV to endorse on the schedule
attached to the Subordinated Note an appropriate notation evidencing
the date and amount of each advance thereunder, as well as the date of
each payment with respect thereto, provided that the failure to make
such notation shall not affect any obligation of SPV thereunder.
The Purchase Price for each Receivable coming into existence after the Initial
Cutoff Date shall be due and owing in full by SPV to Interface or its designee
on the date each such Receivable came into existence (except that SPV may, with
respect to any such Purchase Price, offset against such Purchase Price any
amounts owed by Interface to SPV hereunder and that have become due but remain
unpaid) and shall be paid to Interface in the manner provided in the following
paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into
existence after the Initial Cutoff Date, on each Settlement Date, SPV shall pay
the Purchase Price therefor in accordance with Section 1.2(d) and in the
following manner:
first, by delivery of immediately available funds, to the
extent of funds available to SPV from its subsequent sale of an
interest in the Receivables to the Administrator for the benefit of
the Purchasers under the Loan Agreement or other cash on hand;
second, by delivery of the proceeds of a Subordinated Loan,
provided that the making of any such Subordinated Loan shall be
subject to the provisions set forth in Section 1.2(a)(ii); and
third, unless Interface has declared the Termination Date to
have occurred pursuant to Section 5.2, by accepting a contribution to
SPV's capital in an amount equal to the remaining unpaid balance of
such Purchase Price.
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Subject to the limitations set forth in Section 1.2(a)(ii), Interface
irrevocably agrees to advance each Subordinated Loan requested by SPV on or
prior to the Termination Date. The Subordinated Loans shall be evidenced by,
and shall be payable in accordance with the terms and provisions of the
Subordinated Note and shall be payable solely from funds that SPV is not
required under the Loan Agreement to set aside for the benefit of, or otherwise
pay over to, the Purchasers.
(c) From and after the Termination Date, Interface shall
not sell Receivables to SPV.
(d) Although the Purchase Price for each Receivable
coming into existence after the Initial Cutoff Date shall be due and payable in
full by SPV to Interface on the date such Receivable came into existence,
settlement of the Purchase Price between SPV and Interface shall be effected on
each Settlement Date with respect to all Receivables coming into existence (i)
if settlement is effected on a monthly basis, during the same Calculation
Period and based on information contained in the Monthly Report delivered by
the Servicer pursuant to the Loan Agreement for the Calculation Period most
recently ended, or (ii) if settlement is effected on a weekly basis, during the
calendar week reported in the Borrowing Base Certificate most recently
delivered by the Servicer pursuant to the Loan Agreement and based on the
information contained in such Borrowing Base Certificate. Although settlement
shall be effected in the foregoing manner, increases or decreases in the amount
owing under the Subordinated Note made pursuant to Section 1.2(b) and any
contribution of capital by Interface to SPV made pursuant to Section 1.2(b)
shall be deemed to have occurred and shall be effective as of the last Business
Day of the Calculation Period to which such settlement relates.
Section 1.3 Purchase Price Credit Adjustments. If on
any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or
rejected or returned goods or services, any discount or any adjustment
or otherwise by Interface or the Original Seller of such Receivable
(other than cash Collections on account of the Receivables),
(ii) 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
(b) any of the representations and warranties set forth
in Article II are not true when made or deemed made with respect to any
Receivable, or
(c) any Contract with respect to any Receivable shall
fail 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,
then, in such event, SPV shall be entitled to a credit (each, a "PURCHASE PRICE
CREDIT") against the Purchase Price otherwise payable hereunder to Interface
equal to the Outstanding Balance of such Receivable (calculated before giving
effect to the applicable reduction or cancellation). If such Purchase Price
Credit exceeds the Original Balance of the Receivables coming into
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existence on any day, then Interface shall pay the remaining amount of such
Purchase Price Credit in cash immediately, provided that if the Termination
Date has not occurred, Interface shall be allowed to deduct the remaining
amount of such Purchase Price Credit from any indebtedness owed to it under the
Subordinated Note.
Section 1.4 Payments and Computations, Etc. All amounts
to be paid or deposited by SPV hereunder shall be paid or deposited in
accordance with the terms hereof on the day when due in immediately available
funds to the account of Interface designated from time to time by Interface or
as otherwise directed by Interface. In the event that any payment owed by any
Person hereunder becomes due on a day that is not a Business Day, then such
payment shall be made on the next succeeding Business Day. If any Person fails
to pay any amount hereunder when due, such Person agrees to pay, on demand, the
Default Fee in respect thereof until paid in full; provided, however, that such
Default Fee shall not at any time exceed the maximum rate permitted by
applicable law. All computations of interest payable hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first but excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables
hereunder, Interface hereby sells, transfers, assigns and otherwise conveys to
SPV all of Interface's right and title to and interest in the Records relating
to all Receivables sold hereunder, without the need for any further
documentation in connection with the Purchase. In connection with such
transfer, Interface hereby grants to each of SPV, the Administrator and the
Servicer an irrevocable, non-exclusive license to use, without royalty or
payment of any kind, all software used by Interface to account for the
Receivables, to the extent necessary to administer the Receivables, whether
such software is owned by Interface or is owned by others and used by Interface
under license agreements with respect thereto, provided that should the consent
of any licensor of such software be required for the grant of the license
described herein, to be effective, Interface hereby agrees that upon the
request of SPV (or SPV's secured party), Interface will use its reasonable
efforts to obtain the consent of such third-party licensor. The license granted
hereby shall be irrevocable until the indefeasible payment in full of the
Aggregate Unpaid Balance, and shall terminate on the date this Agreement
terminates in accordance with its terms.
(b) Interface (i) shall take such action requested by
SPV and/or the Administrator (as SPV's secured party), from time to time
hereafter, that may be necessary or appropriate to ensure that SPV and its
assigns under the Loan Agreement have an enforceable ownership interest in the
Records relating to the Receivables purchased hereunder, and (ii) shall use its
reasonable efforts to ensure that SPV, the Administrator and the Servicer each
has an enforceable right (whether by license or sublicense or otherwise) to use
all of the computer software used to account for the Receivables and/or to
recreate such Records.
Section 1.6 Characterization. If, notwithstanding the
intention of the parties expressed in Section 1.1(b), any sale or contribution
by Interface to SPV of Receivables hereunder shall not be characterized as a
sale or such sale shall for any reason be ineffective or unenforceable, then
this Agreement shall be deemed to, and hereby does, constitute a security
agreement under the UCC and other applicable law. For this purpose and without
being in
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derogation of the parties' intention that the sale of Receivables hereunder
shall constitute a true sale thereof, Interface hereby grants to SPV a valid
and enforceable security interest in all of Interface's right, title and
interest in, to and under all Receivables now existing and hereafter arising,
all Collections and Related Security with respect thereto, each LockBox and
LockBox Account, the Transfer Agreement, all other rights and payments relating
to the Receivables and all proceeds of the foregoing to secure the prompt and
complete payment of a loan deemed to have been made in an amount equal to the
aggregate outstanding Purchase Price of the Receivables together with all other
obligations of Interface hereunder, which security interest shall be prior to
all other Adverse Claims thereto. SPV and its assigns 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.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of
Interface. Interface hereby represents and warrants to SPV on the date hereof,
on the date of the Purchase and on each date that any Receivable is purchased
by SPV hereunder that:
(a) Corporate Existence and Power. Interface is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation, and 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 do so 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 Interface of this Agreement and
each other Transaction Document to which it is a party, and the performance of
its obligations hereunder and thereunder and, Interface's use of the proceeds
of any Purchase Price Payment 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
Interface is a party has been duly executed and delivered by Interface.
(c) No Conflict. The execution and delivery by Interface
of this Agreement and each other Transaction Document to which it is a party,
and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its Organizational Documents, (ii) any law, rule or
regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of Interface 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. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
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(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 Interface 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 Interface's knowledge, threatened,
against or affecting Interface, 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. Interface 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 Interface is a party constitute the legal,
valid and binding obligations of Interface enforceable against Interface 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 Interface or any of its Affiliates to SPV (or its assigns) 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 Price
payment to Interface hereunder will be used (i) for a purpose that violates, or
would be inconsistent with, any law, rule or regulation applicable to Interface
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, Interface is the legal and beneficial owner of the Receivables and
the 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
Interface'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 SPV (and SPV shall acquire
from Interface) (i) legal and equitable title to, with the right to sell and
encumber each Receivable existing or hereafter arising, together with the
Collections with respect thereto, and (ii) all of Interface's right, title and
interest in the Related Security associated with each Receivable, in each case,
free and clear of any Adverse Claim (other than Permitted Adverse Claims).
There have been duly filed all financing statements or
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other similar instruments or documents necessary under the UCC (or any
comparable law) of all appropriate jurisdictions to perfect SPV's ownership
interest in the Receivables, the Related Security and the Collections (except
for the Excluded Deposit Accounts).
(l) Places of Business and Locations of Records. The
principal places of business and chief executive office of Interface and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit II or such other locations of which SPV has been notified in
accordance with Section 4.2(a) in jurisdictions where all action required by
Section 4.2(a) has been taken and completed. Interface's Federal Employer
Identification Number and Organizational Identification Number is correctly set
forth on Exhibit II.
(m) Collections. The conditions and requirements set
forth in Section 4.1(j) have at all times been satisfied and duly performed.
The names and addresses of all Collection Banks, together with the account
numbers of the Lockbox Accounts of Interface at each Collection Bank and the
post office box number of each LockBox, are listed on Exhibit III. Interface
has not granted any Person, other than SPV (and its assigns) dominion and
control of any LockBox or LockBox Account, or the right to take dominion and
control of any such LockBox or LockBox Account at a future time or upon the
occurrence of a future event.
(n) Material Adverse Effect. Since December 31, 2001, no
event has occurred that would have a Material Adverse Effect.
(o) Names. In the past five (5) years, Interface has not
used any corporate names, trade names or assumed names other than the name in
which it has executed this Agreement, except as permitted under Section 4.2(a).
(p) Ownership of SPV. Interface owns, directly or
indirectly, 100% of the issued and outstanding capital stock of SPV, free and
clear of any Adverse Claim (other than a Permitted 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 SPV.
(q) Not a Holding Company or an Investment Company.
Interface 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. Interface is not an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or any successor statute.
(r) Compliance with Law. Interface 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
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
(including, without limitation, laws, rules and regulations relating to truth
in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(s) Compliance with Credit and Collection Policy.
Interface has complied in all material respects with the Credit and Collection
Policy with regard to each Receivable and the
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related Contract, and has not made any change to such Credit and Collection
Policy, except such material change as to which SPV (or its assigns) has been
notified in accordance with Section 4.1(a)(vii).
(t) Payments to Interface. The Purchase Price received
by Interface for each Receivable purchased hereunder constitutes reasonably
equivalent value in consideration therefor and such transfer was not made for
or on account of an antecedent debt. No transfer by Interface of any Receivable
hereunder is or may be voidable under any section of the Bankruptcy Reform Act
of 1978 (11 U.S.C.ss.ss.101 et seq.), as amended.
(u) 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).
(v) Eligible Receivables. Each Receivable included at
any time in the Net Receivables Balance as an Eligible Receivable was, on the
later to occur of the date of the Purchase and the date it came into existence,
an Eligible Receivable on such date.
(w) Accounting. The manner in which Interface accounts
for the transactions contemplated by this Agreement does not jeopardize the
characterization of the transactions contemplated herein as being true sales.
ARTICLE III.
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The
Purchase under this Agreement is subject to the conditions precedent that (a)
SPV shall have received on or before the date of such purchase those documents
listed on Schedule A and (b) all of the conditions to the initial advance under
the Loan Agreement shall have been satisfied or waived in accordance with the
terms thereof.
Section 3.2 Conditions Precedent to Subsequent
Payments. SPV's obligation to pay for Receivables coming into existence after
the Initial Cutoff Date shall be subject to the further conditions precedent
that (a) the Commitment Termination Date shall not have occurred; (b) SPV (or
its assigns) shall have received such other approvals, opinions or documents as
it may reasonably request and (c) on the date such Receivable came into
existence, the following statements shall be true (and acceptance of the
proceeds of any payment for such Receivable shall be deemed a representation
and warranty by Interface that such statements are then true):
(i) the representations and warranties set
forth in Article II are true and correct on and as of the date such
Receivable came into existence as though made on and as of such date;
and
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(ii) no event has occurred and is continuing
that will constitute a Termination Event or a Potential Termination
Event.
Notwithstanding the foregoing conditions precedent, upon payment of the
Purchase Price for any Receivable (whether by payment of cash, through an
increase in the amounts outstanding under the Subordinated Note, by offset of
amounts owed to SPV and/or by offset of capital contributions), title to such
Receivable and the Related Security and Collections with respect thereto shall
vest in SPV, whether or not the conditions precedent to SPV's obligation to pay
for such Receivable were in fact satisfied. The failure of Interface to satisfy
any of the foregoing conditions precedent, however, shall give rise to a right
of SPV to rescind the related purchase and to direct Interface to pay to SPV an
amount equal to the Purchase Price payment that shall have been made with
respect to any Receivables related thereto.
ARTICLE IV.
COVENANTS
Section 4.1 Affirmative Covenants of Interface. Until
the date on which this Agreement terminates in accordance with its terms,
Interface hereby covenants as set forth below:
(a) Reporting. Interface will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered
in accordance with GAAP, and furnish to SPV (or its assigns):
(i) Annual Reporting. As soon as available and
in any event within 95 days after the end of each fiscal year of
Interface, balance sheets of Interface and its consolidated
Subsidiaries as at the end of such year, presented on a consolidated
basis, and the related statements of income, shareholders' equity, and
cash flows of Interface and its consolidated Subsidiaries for such
fiscal year, presented on a consolidated basis, setting forth in each
case in comparative form the figures for the previous fiscal year, all
in reasonable detail and accompanied by a report thereon of BDO
▇▇▇▇▇▇▇, LLP or other independent public accountants of comparable
recognized national standing, which such report shall be unqualified
as to going concern and scope of audit and shall state that such
financial statements present fairly in all material respects the
financial condition as at the end of such fiscal year on a
consolidated basis, and the results of operations and statements of
cash flows of Interface and its consolidated Subsidiaries for such
fiscal year in accordance with GAAP and that the examination by such
accountants in connection with such consolidated financial statements
has been made in accordance with generally accepted auditing standards
(it being agreed that the requirements of this subsection may be
satisfied by the delivery of the applicable annual report on Form 10-K
of Interface to the Securities and Exchange Commission to the extent
that (i) it contains the foregoing information and (ii) it is
delivered within the applicable time period noted herein and is
available to the Lenders on ▇▇▇▇▇).
(ii) Quarterly Reporting. As soon as available
and in any event within 50 days after the end of each fiscal quarter,
of Interface (other than the fourth fiscal quarter), balance sheets of
Interface and its consolidated Subsidiaries as at the end of
10
such quarter presented on a consolidated basis and the related
statements of income, shareholders' equity, and cash flows of
Interface and its consolidated Subsidiaries for such fiscal quarter
and for the portion of Interface's fiscal year ended at the end of
such quarter, presented on a consolidated basis setting forth in each
case in comparative form the figures for the corresponding quarter and
the corresponding portion of Interface's previous fiscal year, all in
reasonable detail and certified by the chief financial officer or
principal accounting officer of Interface that such financial
statements fairly present in all material respects the financial
condition of Interface and its consolidated Subsidiaries as at the end
of such fiscal quarter on a consolidated basis, and the results of
operations and statements of cash flows of Interface and its
consolidated Subsidiaries for such fiscal quarter and such portion of
Interface's fiscal year, in accordance with GAAP consistently applied
(subject to normal year-end audit adjustments and the absence of
certain footnotes) (it being agreed that the requirements of this
subsection may be satisfied by the delivery of the applicable
quarterly report on Form 10-Q of Interface to the Securities and
Exchange Commission to the extent that (i) it contains the foregoing
information and (ii) it is delivered within the applicable time period
noted herein and is available to the Lenders on ▇▇▇▇▇).
(iii) Compliance Certificate. Together with the
financial statements required hereunder, a compliance certificate in
substantially the form of Exhibit IV signed by Interface's president,
treasurer, assistant treasurer, chief executive officer or any vice
president 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 its
Subsidiaries 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 SPV, the
Administrator or Lender, copies of the same.
(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 amendment, and (B) if such proposed
change or amendment could adversely affect the collectibility of the
Receivables or decrease the credit quality of any newly created
Receivables, requesting SPV'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 Interface as SPV (or its assigns) may from time to
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time reasonably request in order to protect the interests of SPV (and
its assigns) under or as contemplated by this Agreement.
(b) Notices. Interface will notify SPV (or its assigns)
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) Termination Events or Potential Termination
Events. The occurrence of each Termination Event and each Potential
Termination Event, by a statement of an Authorized Officer of
Interface.
(ii) Judgment and Proceedings. (A) The entry of
any judgment or decree against Interface or any of its Subsidiaries if
entry of such judgment or decree, either individually or together with
all other judgments and decrees then outstanding against Interface and
its Subsidiaries, could reasonably be expected to have a Material
Adverse Effect, and (B) the institution of any litigation, arbitration
proceeding or governmental proceeding against Interface which, if
adversely decided against Interface, could reasonably be expected to
have a Material Adverse Effect.
(iii) Material Adverse Effect. The occurrence of
any event or condition that has had, or could reasonably be expected
to have, a Material Adverse Effect.
(iv) Defaults Under Other Agreements. The
occurrence of a default or an event of default under any other
material financing arrangement pursuant to which Interface is a debtor
or an obligor.
(v) Downgrade of Interface. Any downgrade in
the rating of any Indebtedness of Interface by Standard and Poor's
Ratings Group or by ▇▇▇▇▇'▇ Investors Service, Inc., setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Corporate
Existence. Interface 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. Interface 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. Interface will furnish to SPV (or its
assigns) from time to time such information with respect to it and the
Receivables as SPV (or its assigns) may reasonably request. Interface will,
from time to time during regular business hours as requested by SPV (or its
assigns) (subject to the last sentence of this Section 4.1(d)), upon reasonable
notice and at the sole cost of Interface, permit SPV (or its assigns) or their
respective agents or representatives (and shall cause each Original Seller to
permit SPV (or its assigns) or their respective agents and 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
12
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 such Person's
performance under any of the Transaction Documents or such Person's performance
under the Contracts and, in each case, with any of the officers or employees of
such Person having knowledge of such matters. All such examinations and visits
shall be at the sole cost of Interface; provided, however, that (i) for so long
as no Termination Event or Potential Termination 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 SPV (and
its assigns) (A) such examinations and/or visits shall be limited to four times
per calendar year per Person and (B) such cost shall be born by Interface not
more than twice per calendar year per Person (although in no event shall the
foregoing be construed to limit SPV (and its assigns) or their respective
agents or representatives to two such examinations and/or visits during such
calendar year period with respect to such each Person).
(e) Keeping and Marking of Records and Books.
(i) Interface will (and will cause 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). Interface will (and will cause each Original
Seller to) give SPV (or its assigns) notice of any material change in
the administrative and operating procedures referred to in the
previous sentence.
(ii) Interface will (and will cause 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 Receivables with a legend, acceptable to SPV (or its assigns),
describing SPV's ownership interests in the Receivables and further
describing the security interest of the Administrator (on behalf of
Lender and its assigns) under the Loan Agreement and (B) upon the
request of SPV (or its assigns) after the occurrence of a Termination
Event, (x) ▇▇▇▇ each Contract with a legend describing SPV's ownership
interests in the Receivables and further describing the security
interest of the Administrator (on behalf of Lender and its assigns)
and (y) deliver to SPV (or its assigns) all Contracts (including,
without limitation, all multiple originals of any such Contract)
relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection
Policy. Interface will (and will cause each Original Seller to) timely and
fully (i) perform and comply in all material respects 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 material respects with the
Credit and Collection Policy in regard to each Receivable and the related
Contract.
(g) Performance and Enforcement of Transfer Agreement.
Interface will, and will require each Original Seller to, perform each of their
respective obligations and undertakings
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under and pursuant to the Transfer Agreement, will purchase Receivables
thereunder in strict compliance with the terms thereof and will vigorously
enforce the rights and remedies accorded to Interface under the Transfer
Agreement. Interface will take all actions to perfect and enforce its rights
and interests (and the rights and interests of SPV as assignee of Interface and
of the Administrator as assignee of SPV) under the Transfer Agreement as SPV
(or its assigns) may from time to time reasonably request, including, without
limitation, making claims to which it may be entitled under any indemnity,
reimbursement or similar provision contained in the Transfer Agreement.
(h) Ownership. Interface will (and will cause 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 irrevocably in Interface, free and clear of any Adverse
Claims (other than Permitted Adverse Claims) (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 Interface's interest in such Receivables, Related
Security and Collections and such other action to perfect, protect or more
fully evidence the interest of Interface therein as SPV (or its assigns) may
reasonably request), and (ii) take all necessary action to establish and
maintain, irrevocably in SPV, (A) legal and equitable title to the Receivables
and the Collections and (B) all of Interface's right, title and interest in the
Related Security associated with the Receivables, in each case, free and clear
of any Adverse Claims (other than Permitted Adverse Claims) (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 SPV's interest in such Receivables, Related Security
and Collections and such other action to perfect, protect or more fully
evidence the interest of SPV as SPV (or its assigns) may reasonably request).
(i) Purchasers' Reliance. Interface acknowledges that
the Administrator and the Purchasers are entering into the transactions
contemplated by the Loan Agreement in reliance upon SPV's identity as a legal
entity that is separate from Interface and any Affiliates thereof. Therefore,
from and after the date of execution and delivery of this Agreement, Interface
will take all reasonable steps including, without limitation, all steps that
SPV or any assignee of SPV may from time to time reasonably request to maintain
SPV's identity as a separate legal entity and to make it manifest to third
parties that SPV is an entity with assets and liabilities distinct from those
of Interface and any Affiliates thereof and not just a division of Interface or
any such Affiliate. Without limiting the generality of the foregoing and in
addition to the other covenants set forth herein, Interface (i) will not hold
itself out to third parties as liable for the debts of SPV nor purport to own
the Receivables and other assets acquired by SPV, (ii) will take all other
actions necessary on its part to ensure that SPV is at all times in compliance
with the covenants set forth in Section 7.1(i) of the Loan Agreement and (iii)
will cause all tax liabilities arising in connection with the transactions
contemplated herein or otherwise to be allocated between Interface and SPV on
an arm's-length basis and in a manner consistent with the procedures set forth
in U.S. Treasury Regulations ss.ss.1.1502-33(d) and 1.1552-1.
(j) Collections. Interface will cause (1) all proceeds
from all LockBoxes to be directly deposited by a Collection Bank into a Lockbox
Account and (2) each LockBox and LockBox Account (other than the Excluded
Deposit Accounts) to be subject at all times to a
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LockBox Account Agreement that is in full force and effect. In the event any
payments relating to Receivables are remitted directly to Interface or any
Affiliate of Interface, Interface will remit (or will cause all such payments
to be remitted) directly to a Collection Bank and deposited into a Lockbox
Account (A) if no Termination Event and no Significant Event has then occurred
and is continuing, within two (2) Business Days following receipt thereof, and
at any time a Termination Event or an Significant Event has occurred and is
continuing, immediately upon receipt thereof. At all times prior to such
remittance, Interface will itself hold or, if applicable, will cause such
payments to be held in trust for the exclusive benefit of SPV and its assigns.
Interface will transfer exclusive ownership, dominion and control of each
LockBox and LockBox Account to SPV and, will not grant the right to take
dominion and control of any LockBox or LockBox Account at a future time or upon
the occurrence of a future event to any Person, except to SPV (or its assigns)
as contemplated by this Agreement and the Loan Agreement.
(k) Taxes. Interface will file all tax returns and
reports required by law to be filed by it and 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. Interface will pay when due any taxes payable in
connection with the Receivables for all periods during which such Receivables
were owned by Interface, exclusive of taxes on or measured by income or gross
receipts of SPV and its assigns.
(l) Insurance. Interface will maintain in effect, or
cause to be maintained in effect, at Interface's own expense, such casualty and
liability insurance as Interface deems appropriate in its good faith business
judgment. SPV and the Administrator, for the benefit of the Purchasers, shall
be named as additional insureds with respect to all such liability insurance
maintained by Interface. Interface will pay or cause to be paid, the premiums
therefor and deliver to SPV and the Administrator evidence satisfactory to SPV
and the Administrator of such insurance coverage. Copies of each policy shall
be furnished to SPV, the Administrator and any Purchaser in certificated form
upon SPV's, the Administrator's or such Purchaser's request. The foregoing
requirements shall not be construed to negate, reduce or modify, and are in
addition to, Interface's obligations hereunder.
(m) Payment to Original Seller. With respect to any
Receivable purchased by Interface 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.
(n) Accuracy of Information. All information furnished
by Interface or any of its Affiliates to SPV (or its assigns) will be true and
accurate in every material respect on the date such information is stated or
certified and will not contain any material misstatement 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.
Section 4.2 Negative Covenants of Interface. Until the
date on which this Agreement terminates in accordance with its terms, Interface
hereby covenants that:
15
(a) Name Change, Offices and Records. In the event that
Interface shall change its name, Interface shall notify SPV (and its assigns)
of such change immediately, and in any event within 10 days of the occurrence
of any such change. In the event that Interface shall change its identity,
corporate structure, its state of organization or any office where any material
portion of Records are kept, Interface shall notify SPV (and its assigns) 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.
Interface 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
LockBox and LockBox Account, unless SPV (or its assigns) 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, LockBox Account or LockBox, an executed Lockbox
Account Agreement, acceptable to the Administrator with respect to the new
LockBox and LockBox Account; provided, however, that Interface may make changes
in instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing LockBox Account (other than
an Excluded Deposit Account).
(c) Modifications to Contracts and Credit and Collection
Policy. Interface will not (and will not permit any Original Seller to) make
any material change or any 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 prior written consent of SPV (and its assigns). Except
as otherwise permitted in its capacity as Servicer pursuant to the Loan
Agreement, Interface will not (and will not permit any Original Seller to)
extend, amend or otherwise modify the terms of any Receivable or any Contract
related thereto other than in accordance with its Credit and Collection Policy.
(d) Sales, Liens. Interface 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 (other than
Permitted Adverse Claims) upon (including, without limitation, the filing of
any financing statement) or with respect to, any Receivable or any Related
Security or Collections with respect thereto, or upon or with respect to any
Contract under which any Receivable arises, or any LockBox or LockBox 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 SPV provided for
herein), and Interface will defend the right, title and interest of SPV in, to
and under any of the foregoing property, against all claims of third parties
claiming through or under Interface. Interface shall not create or suffer to
exist any mortgage, pledge, security interest, encumbrance, lien, charge or
other similar arrangement on any of its inventory, other than Permitted Adverse
Claims.
(e) Accounting for Purchase. Interface will not, and
will not permit any Affiliate to, account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than the sale of the Receivables and the Related Security by Interface to
SPV or in any other respect account for or treat the transactions contemplated
hereby in any manner other than as a sale of the Receivables and the Related
Security by Interface to SPV except to the extent that such transactions are
not recognized on
16
account of consolidated financial reporting in accordance with generally
accepted accounting principles.
ARTICLE V.
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any
one or more of the following events shall constitute a Termination Event:
(a) Interface shall fail (i) to make any payment or
deposit consisting of principal required hereunder when due 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 Interface pays immediately
upon demand any and all losses, costs and expenses incurred by SPV, any
Purchaser or the Administrator 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
4.1(b)(i), (ii) or (iii) or 4.2 and such failure shall continue for thirty (30)
consecutive days after the earlier to occur of (x) Interface's having knowledge
thereof and (y) Interface's having received written notice thereof from SPV,
(iv) to comply with the provisions of Section 4.1 (f), (g), (h), (j) or (m) and
such failure shall continue for five (5) consecutive Business Days after the
earlier to occur of (x) Interface's having knowledge thereof and (y)
Interface's having received written notice thereof from SPV, 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 after the earlier to
occur of (x) Interface's having knowledge thereof and (y) Interface's having
received written notice thereof from SPV.
(b) Any representation, warranty, certification or
statement made by Interface in this Agreement, any other Transaction Document
to which it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when made or
deemed made.
(c) Failure of Interface to pay any Indebtedness when
due in an amount in excess of $10,000,000; or the default by Interface 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 Interface 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) Interface 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 Interface 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
17
an order for relief or the appointment of a receiver, trustee or other similar
official for it or any substantial part of its property; or (iii) any
proceeding shall be instituted against Interface 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 60 days of the
institution thereof or (iv) Interface shall take any corporate action to
authorize any of the actions set forth in this subsection (d).
(e) An "Event of Default" (as defined therein) by
Interface of its obligations under Section 7.09 of Interface Revolving Credit
Agreement has occurred and is continuing and has not been waived by the
requisite lenders thereunder.
(f) (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 Termination 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.
(g) 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 Interface 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.
(h) The "Termination Date" under and as defined in the
Transfer Agreement shall occur under the Transfer Agreement or Interface 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 Interface 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 Interface under the Transfer
Agreement.
(i) 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 Interface, or any
Obligor shall directly or indirectly contest in any manner such effectiveness,
validity, binding nature or enforceability, or SPV shall cease to have a valid
ownership interest in the Receivables, the Related Security and the Collections
with respect thereto and the LockBox Accounts, free and clear of any Adverse
Claims.
(j) Interface shall fail to own, free and clear of any
Adverse Claims (other than a Permitted Adverse Claim), 100% of the voting stock
of SPV.
18
Section 5.2 Remedies. Upon the occurrence and during
the continuation of a Termination Event, SPV may take any of the following
actions: (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by Interface;
provided, however, that upon the occurrence of a Termination Event described in
Section 5.1(d)(ii)(iii) or (iv), or of an actual or deemed entry of an order
for relief with respect to Interface under the Federal Bankruptcy Code, the
Termination Date shall automatically occur, without demand, protest or any
notice of any kind, all of which are hereby expressly waived by Interface and
(ii) to the fullest extent permitted by applicable law, declare that the
Default Fee shall accrue with respect to any amounts then due and owing by
Interface to SPV. The aforementioned rights and remedies shall be without
limitation and shall be in addition to all other rights and remedies of SPV and
its assigns 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.
ARTICLE VI.
INDEMNIFICATION
Section 6.1 Indemnities by Interface. Without limiting
any other rights that SPV may have hereunder or under applicable law, Interface
hereby agrees to indemnify (and pay upon demand to) SPV and its 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 SPV or any such assign) 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 SPV of an interest in the Receivables, excluding, however:
(a) Indemnified Amounts to the extent a final
judgment of a court of competent jurisdiction holds that such
Indemnified Amounts resulted from gross negligence or willful
misconduct on the part of the Indemnified Party seeking
indemnification;
(b) 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
(c) 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
Loans under the Loan Agreement as loans to SPV secured by, among other
things, the Receivables, the Related Security and the Collections;
19
provided, however, that nothing contained in this sentence shall limit the
liability of Interface or limit the recourse of SPV to Interface for amounts
otherwise specifically provided to be paid by Interface under the terms of this
Agreement. Without limiting the generality of the foregoing indemnification,
Interface shall indemnify SPV for Indemnified Amounts (including, without
limitation, losses in respect of uncollectible receivables, regardless of
whether reimbursement therefor would constitute recourse to Interface) relating
to or resulting from:
(i) any representation or warranty made by
Interface (or any officer of Interface) or any Original Seller (or any
officer of any Original Seller) under or in connection with this
Agreement, any other Transaction Document or any other information or
report delivered by Interface or any Original Seller pursuant hereto
or thereto that shall have been false or incorrect when made or deemed
made;
(ii) the failure by Interface or any Original
Seller, to comply with any applicable law, rule or regulation with
respect to any Receivable or Contract related thereto, or the
nonconformity of any Receivable or Contract included therein with any
such applicable law, rule or regulation or any failure of Interface or
any Original Seller to keep or perform any of its obligations, express
or implied, with respect to any Contract;
(iii) any failure of Interface or any Original
Seller to perform its duties, covenants or other obligations 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 merchandise, 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 proceeding
related to or arising from this Agreement or any other Transaction
Document, the transactions contemplated hereby, the use of the
proceeds of any Purchase Price Payment, the ownership of the
Receivables or any other investigation, litigation or proceeding
relating to Interface or any Original Seller in which any Indemnified
Party becomes involved as a result of any of the transactions
contemplated hereby;
20
(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 Termination Event described in Section
5.1(d);
(x) any failure of Interface 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, free and clear of any Adverse Claim (other
than as created hereunder); or any failure of Interface to give
reasonably equivalent value to the Original Seller thereof under the
Transfer Agreement in consideration of the transfer by such Original
Seller of any such Receivable, or any attempt by any Person to void
such transfer under statutory provisions or common law or equitable
action;
(xi) any failure to vest and maintain vested in
SPV, or to transfer to SPV, legal and equitable title to, and
ownership of, the Receivables and the Collections, and all of
Interface's right, title and interest in the Related Security
associated with the Receivables, in each case, free and clear of any
Adverse Claim;
(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 the Purchase or at any subsequent time;
(xiii) any action or omission by Interface or any
Original Seller that reduces or impairs the rights of SPV with respect
to any Receivable or the value of any such Receivable;
(xiv) any attempt by any Person to void the
Purchase 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 6.2 Other Costs and Expenses. Interface shall
pay to SPV on demand all reasonable 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. Interface shall pay to SPV on demand
any and all costs and expenses of SPV actually incurred, if any, including
reasonable and actual counsel fees and expenses in connection with the
enforcement of this Agreement, the Loan Agreement and the other documents
delivered hereunder and thereunder in connection with any restructuring or
workout of this Agreement or such documents, or the administration of this
Agreement following a Termination Event.
21
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of SPV (or its
assigns) 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 signed by Interface and SPV
and, to the extent required under the Loan Agreement, the Administrator and
Lender.
Section 7.2 Notices. All communications and notices
provided for hereunder shall be in writing (including bank wire, telecopy or
electronic facsimile trans mission 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 (a) if personally delivered, when received, (b) if sent by certified
mail, three Business Days after having been deposited in the mail, postage
prepaid, (c) if sent by overnight courier, one Business Day after having been
given to such courier, and (d) if transmitted by facsimile, when sent, receipt
confirmed by telephone or electronic means.
Section 7.3 Protection of Ownership Interests of SPV.
(a) Interface 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 SPV (or its
assigns) may request, to perfect, protect or more fully evidence the interest
of SPV hereunder and the Administrator's security interest, or to enable SPV
(or its assigns) to exercise and enforce their rights and remedies hereunder.
At any time during the occurrence and continuance of a Significant Event, SPV
(or its assigns) may, at Interface's sole cost and expense, direct Interface to
notify the Obligors of Receivables of the ownership interests of SPV 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 SPV or its designee.
(b) If Interface fails to perform any of its obligations
hereunder, SPV (or its assigns) may (but shall not be required to) perform, or
cause performance of, such obligations, and SPV's (or such assigns') costs and
expenses incurred in connection therewith shall be payable by Interface as
provided in Section 6.2. Interface irrevocably authorizes SPV (and its assigns)
at any time and from time to time in the sole discretion of SPV (or its
assigns), and appoints SPV (and its assigns) as its attorney(ies)-in-fact, to
act on behalf of Interface (i) to duly authorize on behalf of Interface as
debtor and to file financing statements necessary or desirable
22
in SPV's (or its assigns') sole discretion to perfect and to maintain the
perfection and priority of the interest of SPV 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 SPV (or its assigns) in their sole discretion deem necessary or
desirable to perfect and to maintain the perfection and priority of SPV's
interests in the Receivables. This appointment is coupled with an interest and
is irrevocable.
Section 7.4 Confidentiality.
(a) Interface 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
Administrator and Lender and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that Interface and its officers and
employees may disclose such information to Interface'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,
Interface hereby consents to the disclosure of any nonpublic information with
respect to it (i) to SPV, the Administrator or Lender by each other, (ii) by
SPV, the Administrator or Lender to any prospective or actual assignee or
participant of any of them who executes a confidentiality agreement for the
benefit of Interface and SPV on terms comparable to those required of SPV
hereunder with respect to such disclosed information and (iii) by the
Administrator to any rating agency, Commercial Paper dealer or provider of a
surety, guaranty or credit or liquidity enhancement to Lender or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which SunTrust Capital Markets, Inc. acts as the administrator and
to any officers, directors, employees, outside accountants and attorneys of any
of the foregoing who execute a confidentiality agreement for the benefit of
Interface and SPV on terms comparable to those required of SPV hereunder with
respect to such disclosed information; provided, that each such Person is
informed of the confidential nature of such information. In addition, Lender
and the Administrator 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).
(c) SPV 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 Interface,
the Obligors and their respective businesses obtained by it in connection with
the due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of SPV arising from or related to the
transactions contemplated herein provided, however, that each of SPV and its
employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the Administrator and Lender, (ii) to any
prospective or actual assignee or participant of the Administrator or Lender
who executes a confidentiality agreement for the benefit of Interface and SPV
on terms comparable to those required of SPV hereunder with respect to such
disclosed information, (iii) to any rating agency, provider of a surety,
guaranty or credit or liquidity enhancement to Lender, (iv) to any officers,
directors, employees, outside accountants and attorneys of any of the
foregoing, and (v) to the
23
extent required pursuant to any applicable law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory authority or
proceedings with competent jurisdiction (whether or not having the force or
effect of law) so long as such required disclosure is made under seal to the
extent permitted by applicable law or by rule of court or other applicable
body.
Section 7.5 Bankruptcy Petition.
(a) Interface and SPV each 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 Lender, it will not institute
against, or join any other Person in instituting against, Lender 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.
(b) Interface covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
Obligations of SPV, it will not institute against, or join any other Person in
instituting against, SPV 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 7.6 Limitation of Liability. Except with
respect to any claim arising out of the willful misconduct or gross negligence
of Lender or the Administrator, no claim may be made by Interface or any other
Person against Lender, the Administrator 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 Interface 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.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS OTHER THAN SECTION 5-1401 OF THE NEW YORK OBLIGATIONS LAW) OF THE
STATE OF NEW YORK.
Section 7.8 CONSENT TO JURISDICTION. INTERFACE 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 INTERFACE PURSUANT TO THIS AGREEMENT AND INTERFACE HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED 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 INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF SPV (OR ITS ASSIGNS) TO BRING
PROCEEDINGS AGAINST INTERFACE IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY INTERFACE
24
AGAINST SPV (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY INTERFACE PURSUANT TO THIS AGREEMENT
SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 7.9 WAIVER OF JURY TRIAL. TO THE EXTENT PERMIT
▇▇▇ 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 INTERFACE PURSUANT
TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THERE UNDER.
Section 7.10 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. This
Agreement shall supersede and replace the Original Receivables Sale Agreement
(other than any provisions thereof which by their express terms survive
termination of the Original Receivables Sale Purchase Agreement).
(b) This Agreement shall be binding upon and inure to
the benefit of Interface and SPV, and their respective successors and permitted
assigns (including any trustee in bankruptcy). Interface may not assign any of
its rights and obligations hereunder or any interest herein without the prior
written consent of SPV. SPV may assign at any time its rights and obligations
hereunder and interests herein to any other Person without the consent of
Interface. Without limiting the foregoing, Interface acknowledges that SPV,
pursuant to the Loan Agreement, may grant security interests to the
Administrator, for the benefit of Lender, in its rights, remedies, powers and
privileges hereunder and that the Administrator may further assign such
security interests to the extent permitted in the Loan Agreement. Interface
agrees that the Administrator, as the secured party of SPV, shall, subject to
the terms of the Loan Agreement, have the right to enforce this Agreement and
to exercise directly all rights and remedies of SPV as secured party under this
Agreement (including, without limitation, the right to give or withhold any
consents or approvals of SPV to be given or withheld hereunder) and Interface
agrees to cooperate fully with the Administrator in the exercise of such rights
and remedies. 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 representation and warranty made by Interface pursuant to Article II;
(ii) the indemnification and payment provisions of Article VI; and (iii)
Section 7.5 shall be continuing and shall survive any termination of this
Agreement.
Section 7.11 Counterparts; Severability; Section
References. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate
25
counterparts, 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 7.12 Subordination. Interface shall have the
right to receive, and SPV shall make, any and all payments relating to any
indebtedness, obligation or claim, Interface may from time to time hold or
otherwise have against SPV or any assets or properties of SPV, whether arising
hereunder or otherwise existing, provided that, after giving effect to any such
payment, the aggregate Outstanding Balance of Receivables owned by SPV at such
time exceeds the sum of (a) the aggregate outstanding principal balance of the
Loans under the Loan Agreement, plus (b) the aggregate outstanding principal
balance of the Subordinated Loans. Interface hereby agrees that at any time
during which the condition set forth in the proviso of the immediately
preceding sentence shall not be satisfied, Interface shall be subordinate in
right of payment to the prior payment of any indebtedness or obligation of SPV
owing to the Administrator or Lender under the Loan Agreement.
[SIGNATURE PAGE FOLLOWS]
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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, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Legal
Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
INTERFACE SECURITIZATION CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address:
c/o Interface, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Legal
Department
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
27
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined).
As used in the Agreement and the Exhibits, Schedules and Annexes thereto,
capitalized terms have the meanings set forth in this Exhibit I (such meanings
to be equally applicable to the singular and plural forms thereof). If a
capitalized term is used in the Agreement, or any Exhibit, Schedule or Annex
thereto, and not otherwise defined therein or in this Exhibit I, such term
shall have the meaning assigned thereto in Exhibit I to the Loan Agreement.
"ADMINISTRATOR" has the meaning set forth in the Preliminary
Statements to the Agreement.
"AGREEMENT" means the Receivables Sale Agreement, dated as of
February 12, 2003, between Interface and SPV, as the same may be amended,
restated or otherwise modified.
"CALCULATION PERIOD" means each calendar month or portion
thereof that elapses during the term of the Agreement. The first Calculation
Period shall commence on the date of the Purchase of Receivables hereunder and
the final Calculation Period shall terminate on the Termination Date.
"CHANGE IN CONTROL PROVISION" shall mean any term or
provision contained in any indenture, debenture, note, or other agreement or
document evidencing or governing Interface Control Debt which requires, or
permits the holder(s) of such Interface Control Debt to require, that such
Interface Control Debt be redeemed, repurchased, defeased, prepaid or repaid,
either in whole or in part, or the maturity of such Interface Control Debt to
be accelerated in any respect, as a result of a change in ownership of the
capital stock of Interface or voting rights with respect thereto.
"CREDIT AND COLLECTION POLICY" means each Original Seller's
credit and collection policies and practices relating to Contracts and
Receivables of such Original Seller existing on the date hereof and summarized
in Exhibit V, as modified from time to time in accordance with the Agreement.
"DEFAULT FEE" means a per annum rate of interest equal to the
sum of (i) the Prime Rate, plus (ii) 2% per annum.
"DILUTIONS" means, at any time, the aggregate amount of
reductions or cancellations described in Section 1.3(a) of the Agreement.
"DISCOUNT FACTOR" means a percentage calculated to provide
SPV with a reasonable return on its investment in the Receivables after taking
account of (i) the time value of money based upon the anticipated dates of
collection of the Receivables and the cost to SPV of financing its investment
in the Receivables during such period and (ii) the risk of nonpayment by the
Obligors. Interface and SPV may agree from time to time to change the Discount
Factor based on changes in one or more of the items affecting the calculation
thereof, provided that any change to the Discount Factor shall take effect as
of the commencement of a Calculation Period,
28
shall apply only prospectively and shall not affect the Purchase Price payment
made prior to the Calculation Period during which Interface and SPV agree to
make such change.
"INITIAL CUTOFF DATE" has the meaning set forth in Section
1.2(a).
"INTERFACE" has the meaning set forth in the preamble to the
Agreement.
"INTERFACE CONTROL DEBT" shall mean, at any time, debt of
Interface for borrowed money in an aggregate principal amount outstanding at
such time in excess of $10,000,000 which is subject to Change in Control
Provisions, excluding debt of Interface arising under Interface Revolving
Credit Agreement or any security document of Interface delivered pursuant to
the Interface Revolving Credit Agreement.
"LENDER" has the meaning set forth in the Preliminary
Statements to the Agreement.
"LOAN AGREEMENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(i) the financial condition or operations of Interface and its Subsidiaries,
(ii) the ability of Interface to perform its obligations under the Agreement or
any other Transaction Document, (iii) the legality, validity or enforceability
of the Agreement or any other Transaction Document, (iv) Interface's, SPV's,
the Administrator's or any Purchaser's interest in the Receivables generally or
in any significant portion of the Receivables, the Related Security or
Collections with respect thereto, or (v) the collectibility of the Receivables
generally or of any material portion of the Receivables.
"NET VALUE" means, as of any date of determination, an amount
equal to the sum of (a) the aggregate Outstanding Balance of the Receivables at
such time, minus (b) the aggregate principal amount of all outstanding Loans
outstanding under the Loan Agreement at such time.
"NET WORTH" means as of the last Business Day of each
Calculation Period preceding any date of determination, the excess, if any, of
(a) the aggregate Outstanding Balance of the Receivables at such time, over (b)
the sum of (i) the Aggregate Capital outstanding at such time, plus (ii) the
aggregate outstanding principal balance of the Subordinated Loans (including
any Subordinated Loan proposed to be made on the date of determination).
"ORIGINAL BALANCE" means, with respect to any Receivable
coming into existence after the Initial Cutoff Date, the Outstanding Balance of
such Receivable on the date it was created.
"ORIGINAL RECEIVABLES PURCHASE AGREEMENT" means that certain
Receivables Purchase Agreement dated as of December 19, 2000 among SPV,
Interface, as servicer, certain financial institutions party thereto as
purchasers, Jupiter Securitization Corporation and Bank One, NA (Main Office
Chicago), as agent, as amended.
29
"ORIGINAL RECEIVABLES SALE AGREEMENT" means the Receivables
Sale Agreement as defined in the Original Receivables Purchase Agreement.
"PERMITTED ADVERSE CLAIM" means (a) Liens for taxes or
assessments or other governmental charges not yet due and payable; and (b)
Liens created by the Transaction Documents.
"POTENTIAL TERMINATION EVENT" means an event that, with the
passage of time or the giving of notice, or both, would constitute a
Termination Event.
"PURCHASE" means the purchase pursuant to Section 1.1(a) of
the Agreement by SPV from Interface of the Receivables and the Related Security
and Collections related thereto, together with all related rights in connection
therewith.
"PURCHASE PRICE" means, with respect to the Purchase, the
aggregate price to be paid by SPV to Interface for such Purchase in accordance
with Section 1.2 of the Agreement for the Receivables, Collections and Related
Security being sold to SPV, which price shall equal on any date (i) the product
of (x) the Outstanding Balance of such Receivables on such date, multiplied by
(y) one minus the Discount Factor in effect on such date, minus (ii) any
Purchase Price Credits to be credited against the Purchase Price otherwise
payable in accordance with Section 1.3 of the Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in Section
1.3 of the Agreement.
"RECEIVABLE" means all indebtedness and other obligations
owed to an Original Seller (at the time it arises, and before giving effect to
any transfer or conveyance under the Transfer Agreement), Interface (after
giving effect to the transfers under the Transfer Agreement and before giving
effect to any transfer or conveyance under the Agreement) or SPV (after giving
effect to the transfers under the Agreement) or in which an Original Seller,
Interface or SPV has a security interest or other interest, including, without
limitation, any indebtedness, 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 an Original Seller, 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, indebted ness 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, the Original Seller thereof or Interface treats such indebtedness,
rights or obligations as a separate payment obligation.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the interest of Interface or the Original
Seller thereof in the inventory and goods (including returned or
repossessed inventory or goods), if
30
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 Interface's right, title and interest in each
LockBox and each LockBox Account,
(vii) all of Interface's interest in, to and under the
Transfer Agreement, and
(viii) all proceeds of any of the foregoing.
"REQUIRED CAPITAL AMOUNT" means, as of any date of
determination, an amount equal to the sum of (i) the twenty-four month rolling
average of Dilutions, plus (ii) the result obtained in the foregoing clause (i)
of this definition, multiplied by 10%.
"SETTLEMENT DATE" means, with respect to each Calculation
Period, the date that is the tenth (10th) calendar day of the month following
such Calculation Period.
"SPV" has the meaning set forth in the preamble to the
Agreement.
"SUBORDINATED LOAN" has the meaning set forth in Section
1.2(a) of the Agreement.
"SUBORDINATED NOTE" means a promissory note in substantially
the form of Exhibit VII hereto as more fully described in Section 1.2 of the
Agreement, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"TERMINATION DATE" means the earliest to occur of (i) the
Commitment Termination Date (under and as defined in the Loan Agreement), (ii)
the Business Day immediately prior to the occurrence of a Termination Event set
forth in Section 5.1(d)(ii), (iii) or (iv), (iii) the Business Day specified in
a written notice from SPV to Interface following the occurrence and during the
continuance of any other Termination Event, and (iv) the date that is
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30 days after SPV's receipt of written notice from Interface that it wishes to
terminate the facility evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1
of the Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement,
the Transfer Agreement each LockBox Account Agreement, the Subordinated Note
and all other instruments, documents and agreements executed and delivered in
connection herewith.
"TRANSFER AGREEMENT" has the meaning set forth in the
preamble to the Agreement.
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.
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