Document:

Second Amended and Restated Receivables Purchase and Sale Agreement

 Exhibit 10.2 
 SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE 
 AND SALE AGREEMENT 
 DATED AS OF JULY 28, 2008 
 AMONG 
 MOHAWK CARPET DISTRIBUTION, L.P., DAL-TILE CORPORATION,
DAL-TILE 
 SSC WEST, INC. AND DAL-TILE SSC EAST, INC. 
 AS ORIGINATORS, 
 AND 
 MOHAWK FACTORING, INC., 
 AS THE BUYER 

 TABLE OF CONTENTS 
  

			
	 	  	PAGE
	 ARTICLE I AMOUNTS AND TERMS OF THE PURCHASE
	  	3
		
	Section 1.1 Purchase of Receivables	  	3
		
	Section 1.2 Payment for the Purchases	  	4
		
	Section 1.3 Purchase Price Credit Adjustments	  	5
		
	Section 1.4 Payments and Computations, Etc.	  	5
		
	Section 1.5 Transfer of Collection Records; License of Software; Access to Contracts	  	6
		
	Section 1.6 Characterization	  	6
		
	 ARTICLE II REPRESENTATIONS AND WARRANTIES
	  	7
		
	Section 2.1 Representations and Warranties of Originators	  	7
		
	 ARTICLE III CONDITIONS OF PURCHASE
	  	10
		
	Section 3.1 Conditions Precedent to Purchase	  	10
		
	Section 3.2 Conditions Precedent to Subsequent Payments	  	10
		
	 ARTICLE IV COVENANTS
	  	11
		
	Section 4.1 Affirmative Covenants of Originators	  	11
		
	Section 4.2 Negative Covenants of Originators	  	14
		
	 ARTICLE V TERMINATION EVENTS
	  	15
		
	Section 5.1 Termination Events	  	15
		
	Section 5.2 Remedies	  	16
		
	 ARTICLE VI INDEMNIFICATION
	  	16
		
	Section 6.1 Indemnities by Originators	  	16

			
		
	Section 6.2 Other Costs and Expenses	  	18
		
	 ARTICLE VII MISCELLANEOUS
	  	19
		
	Section 7.1 Waivers and Amendments	  	19
		
	Section 7.2 Notices	  	19
		
	Section 7.3 Protection of Ownership Interests of the Buyer	  	19
		
	Section 7.4 Confidentiality	  	20
		
	Section 7.5 Bankruptcy Petition	  	21
		
	Section 7.6 CHOICE OF LAW	  	21
		
	Section 7.7 CONSENT TO JURISDICTION	  	21
		
	Section 7.8 WAIVER OF JURY TRIAL	  	22
		
	Section 7.9 Integration; Binding Effect; Survival of Terms	  	22
		
	Section 7.10 Counterparts; Severability; Section References	  	23

 EXHIBITS AND SCHEDULES 

  

			
	 Exhibit I
	 	Definitions
		
	 Exhibit II
	 	Principal Place of Business; Location(s) of Collection Records; Federal Employer Identification Number; Organizational Identification Number; Other Names
		
	 Exhibit III
	 	Lock-Boxes and Collection Accounts
		
	 Exhibit IV
	 	Form of Compliance Certificate
		
	 Exhibit V
	 	Copy of Credit and Collection Policy
		
	 Exhibit VI
	 	Form of Purchase Report
		
	 Schedule A
	 	List of Documents to Be Delivered to the Buyer Prior to Effectiveness of the Second Amendment and Restatement

  

 ii 

 SECOND AMENDED AND RESTATED RECEIVABLES PURCHASE AND SALE 
 AGREEMENT 
 THIS SECOND AMENDED
AND RESTATED RECEIVABLES PURCHASE AND SALE AGREEMENT, dated as of July 28, 2008, is by and among Mohawk Carpet Distribution, L.P., a Delaware limited partnership (“Mohawk Distribution”), Dal-Tile Corporation, a
Pennsylvania corporation (“Dal-Tile”), Dal-Tile SSC West, Inc., a Delaware corporation (“Dal-Tile West”), and Dal-Tile SSC East, Inc., a Delaware corporation (“Dal-Tile East”);
each of Mohawk Distribution, Dal-Tile, Dal-Tile East, Dal-Tile West and any other Person that becomes an “Originator” hereunder pursuant to Section 7.9(b) hereof, an “Originator” and collectively the
“Originators”), and Mohawk Factoring, Inc., a Delaware corporation (“Buyer”). 
 Unless defined
elsewhere herein, capitalized terms used in this Agreement shall have the meanings assigned to such terms in Exhibit I hereto. 
 PRELIMINARY STATEMENTS 
 Pursuant to the terms of that certain Amended and Restated Receivables Purchase and
Sale Agreement dated as of August 4, 2003 (as amended, the “Existing Agreement”) by and among the Originators, as sellers, and Buyer, as buyer, the Originators sold Receivables to Buyer. 
 Each of the Originators party to this Agreement on the date hereof and the Buyer intended that the past transfers of Receivables under the
Existing Agreement be true sales to the Buyer thereunder, and each of the Originators and the Buyer intend that all transfers of Receivables hereunder, be true sales to the Buyer by such Originator of the Receivables originated by it, providing the
Buyer with the full benefits of ownership of such Receivables, and none of the Originators nor the Buyer intends these transactions to be, or for any purpose to be characterized as, loans from the Buyer to such Originator. Each of the Originators
acknowledges that from and after the date hereof, the Buyer intends to finance purchases of Receivables from the Originators, in part, from the proceeds of loans made pursuant to a Second Amended and Restated Credit and Security Agreement of even
date herewith (as the same may from time to time hereafter be amended, supplemented, restated or otherwise modified, the “Credit and Security Agreement”) among the Buyer, as the borrower, Mohawk Servicing, Inc., a Delaware
corporation, as the initial Servicer, Victory Receivables Corporation (“Victory”), Three Pillars Funding LLC (“TPF”; together with Victory and the other issuers of Commercial Paper from time to time
party thereto as “Conduits,” each a “Conduit” and collectively, the “Conduits”) and certain other lenders from time to time party thereto (the “Lenders”), SunTrust
Robinson Humphrey, Inc., as administrator of TPF (the “TPF Agent”), and The Bank of Tokyo-Mitsubishi UFJ, Ltd. New York Branch (“BTMU”) as administrator of Victory (the “Victory
Agent”) and any other entity acting as administrator of a Conduit (together with the TPF Agent and the Victory Agent, individually a “Co-Agent”  

  

 2 

 
and collectively, the “Co-Agents”) and STRH as administrative agent for the Co-Agents, the Lenders and the Conduits (in such
capacity, together with its successors, the “Administrative Agent”). 
 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 that the Existing Agreement is amended
and restated in its entirety as follows: 
 ARTICLE I 
 AMOUNTS AND TERMS OF THE PURCHASE 
 Section 1.1 Purchase of Receivables. 
 (a) Pursuant to the terms of the Existing Agreement, each of the Originators has sold, transferred, set-over and otherwise conveyed to the
Buyer, without recourse (except to the extent expressly provided therein), and the Buyer purchased from each such Originator, all of such Originator’s right, title and interest in and to all Receivables originated by such Originator and
existing as of the close of business on the applicable Initial Cutoff Date. In consideration for the Purchase Price paid to each Originator upon the terms and subject to the conditions set forth herein, each Originator does hereby sell, assign,
transfer, set-over and otherwise convey to the Buyer, without recourse (except to the extent expressly provided herein), and the Buyer does hereby purchase from such Originator all Receivables originated on the date hereof and thereafter by such
Originator through and including the Termination Date, together, in each case, with all Related Security relating thereto. In accordance with the preceding sentence, the Buyer shall acquire all of each Originator’s right, title and interest in
and to all Receivables arising on and after the date hereof through and including the Termination Date, together with all of such Originator’s rights in and to all Related Security relating thereto. The Buyer shall be obligated to pay the
Purchase Price for the Receivables purchased hereunder from each Originator in accordance with Section 1.2. From and after the Termination Date, the Buyer shall not be obligated to purchase Receivables from any Originator. 
 (b) On each Monthly Reporting Date, each Originator shall (or shall require the Servicer to) deliver to the Buyer a report in
substantially the form of Exhibit VI hereto (each such report being herein called a “Purchase Report”) with respect to the Receivables sold by such Originator to the Buyer during the fiscal month then most recently ended. In
addition to, and not in limitation of, the foregoing, in connection with the payment of the Purchase Price for any Receivables purchased hereunder, the Buyer may request that the applicable Originator deliver, and such Originator shall deliver, such
approvals, opinions, information or documents as the Buyer may reasonably request. 
  

 3 

 (c) It is the intention of the parties hereto that each Purchase of Receivables from an
Originator made hereunder shall constitute a sale, which sale is absolute and irrevocable and provides the Buyer with the full benefits of ownership of the Receivables originated by such Originator. Except for the Purchase Price Credits owed to such
Originator pursuant to Section 1.3, the sale of Receivables hereunder by each Originator is made without recourse to such Originator; provided, however, that (i) such Originator shall be liable to the Buyer for all
representations, warranties, covenants and indemnities made by such Originator pursuant to the terms of the Transaction Documents to which such Originator is a party, and (ii) such sale does not constitute and is not intended to result in an
assumption by the Buyer or any assignee thereof of any obligation of such Originator or any other Person arising in connection with the Receivables, the related Contracts and/or other Related Security or any other obligations of such Originator. In
view of the intention of the parties hereto that each Purchase of Receivables made hereunder shall constitute a sale of such Receivables rather than loans secured thereby, each Originator agrees that it will, on or prior to the date hereof and in
accordance with Section 4.1(e)(ii), make appropriate notation in its computer files relating to the Receivables originated by it with a legend properly evidencing that the Buyer has purchased such Receivables as provided in this
Agreement and to note in its financial statements that its Receivables have been sold to the Buyer. Upon the request of the Buyer or the Administrative Agent (as the Buyer’s assignee), each Originator will execute and file 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 the Buyer’s ownership interest in the Receivables
originated by such Originator and the Related Security with respect thereto, or as the Buyer may reasonably request. 
 Section 1.2
Payment for the Purchases. 
 (a) The Purchase Price for the Purchase from each Originator of its Receivables in
existence as of the close of business on the applicable Initial Cutoff Date and not previously assigned or transferred to the Buyer, if any, shall be payable in full by the Buyer to such Originator on the Business Day following such Initial Cutoff
Date in immediately available funds. 
 (b) The Purchase Price for each Receivable coming into existence after the applicable
Initial Cutoff Date shall be due and owing in full by the Buyer to the applicable Originator or its designee in immediately available funds on the date each such Receivable came into existence except that the Buyer may, with respect to any such
Purchase Price: 
 (i) offset against such Purchase Price any amounts owed by such Originator to the Buyer hereunder and which
have become due but remain unpaid; and/or 
  

 4 

 (ii) elect to defer payment of all or any portion of the Purchase Price for Receivables
originated by such Originator during the same Calculation Period (based on the information contained in the Purchase Report delivered by such Originator for the Calculation Period then most recently ended) until the next succeeding Settlement Date.

 Section 1.3 Purchase Price Credit Adjustments. If on any day: 
 (a) the Outstanding Balance of a Receivable purchased from any Originator is: 
 (i) reduced as a result of any defective or rejected or returned goods or services, any discount or any adjustment or otherwise by such
Originator (other than (A) as a result of (1) such Receivable becoming a Charged-Off Receivable or (2) cash and volume discounts of up to 3% of the original Outstanding Balance of such Receivable or (B) to reflect cash
Collections on account of such Receivable), 
 (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 Section 2.1(i), (l), (p), (q), (r), (s) or (t) hereof is not true when made or deemed made with respect to any Receivable, 
 then, in such event, the Buyer shall be entitled to a credit (each, a “Purchase Price Credit”) against the Purchase Price otherwise payable to
the applicable Originator hereunder equal to the Purchase Price paid by the Buyer with respect to such Receivable (less any Collections received on or after the date of purchase to and including the date that the Purchase Price Credit is
determined). Each Purchase Price Credit shall be deemed to be a collection of the related Receivable. If such Purchase Price Credit exceeds the Original Balance of the Receivables originated by the applicable Originator on any day, such Originator
shall pay the remaining amount of such Purchase Price Credit in cash on or prior to the earlier of (i) the next Settlement Date or (ii) the Termination Date. 
 Section 1.4 Payments and Computations, Etc. All amounts to be paid or deposited by the Buyer 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 the applicable Originator designated from time to time by such Originator or as otherwise directed by such Originator. 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 elapsed.

  

 5 

 Section 1.5 Transfer of Collection Records; License of Software; Access to Contracts. In
connection with, and in consideration of, the Purchase from each Originator of Receivables originated by it, each Originator will deliver to the Buyer or to the Servicer, on behalf of the Buyer, originals or copies (in written, photostatic,
electronic or other mutually acceptable form) of such Originator’s Collection Records relating to all Receivables sold by it hereunder. Each Originator shall permit the Servicer and the Buyer during such Originator’s normal business hours
and without undue disruption to the Originator’s operations, at the expense of the Buyer or the Servicer, as applicable (but in no event at the expense of the Administrative Agent), to inspect and copy all such Collection Records and other
books and records regarding the Receivables and the Contracts solely for purposes of administering and collecting the Receivables hereunder and under the Collection Services Agreement. In order to facilitate such administration, collection and
servicing of such Receivables, each Originator hereby grants to each of the Buyer, Servicer, and, for so long as the Credit and Security Agreement remains in effect, the Administrative Agent, an irrevocable, non-exclusive license to use, without
royalty or payment of any kind, all software used by such Originator to account for such Receivables, to the extent necessary to administer such Receivables, whether such software is owned by such Originator or is owned by others and used by such
Originator 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, such Originator hereby agrees that
upon the request of the Servicer or the Buyer, such Originator will use its reasonable efforts to obtain the consent of such third-party licensor. The license granted hereby shall be irrevocable until the later to occur of (i) the indefeasible
payment in full of the Aggregate Unpaids under the Credit and Security Agreement, and (ii) the date on which this Agreement terminates in accordance with its terms. 
 Section 1.6 Characterization. If, notwithstanding the intention of the parties expressed in Section 1.1(c), any sale by an Originator to the Buyer of Receivables hereunder shall be
characterized as a secured loan and not a sale or such sale shall for any reason be ineffective or unenforceable, then this Agreement shall be deemed to constitute a security agreement under the UCC and other applicable law. For this purpose and
without being in derogation of the parties’ intention that the sale of Receivables by each Originator hereunder shall constitute a true sale thereof, such Originator hereby grants to the Buyer a duly perfected security interest in all of such
Originator’s right, title and interest in and to all Receivables of such Originator which exist on the date hereof or arise thereafter through and including the Termination Date, together with all Related Security with respect thereto, all
other rights and payments relating to such 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 Purchase Price of the Receivables purchased from such
Originator together with any Purchase Interest applicable thereto and all other obligations of such Originator hereunder, which security interest shall be prior to all other Adverse Claims thereto. Upon the occurrence of a Termination Event, the
Buyer shall have, in addition to the rights and remedies which it may have under this Agreement, all other rights and remedies provided to a secured creditor upon default under the UCC and other applicable law, which rights and remedies shall be
cumulative. 
  

 6 

 ARTICLE II 
 REPRESENTATIONS AND WARRANTIES 
 Section 2.1 Representations and Warranties of
Originators. Each Originator hereby represents and warrants to the Buyer on the date of the Purchase from such Originator hereunder and, except for representations and warranties that are limited to a certain date, on each date that any
Receivable is originated by such Originator on or after the date of such Purchase through and including the Termination Date, that: 
 (a)
Existence and Power. Such Originator is duly organized, validly existing and in good standing under the laws of the state set forth after its name in the preamble to this Agreement, and is duly qualified to do business and is in good standing
as a foreign entity, and has and holds all organizational power, and all governmental licenses, authorizations, consents and approvals required to carry on its business in each jurisdiction in which its business is conducted except where the failure
to so qualify or so hold is not reasonably likely to have a Material Adverse Effect. 
 (b) Power and Authority; Due Authorization,
Execution and Delivery. The execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party, and the performance of its obligations hereunder and thereunder, and such Originator’s use
of the proceeds of the Purchase made from it hereunder, are within its powers and authority and have been duly authorized by all necessary action on its part. This Agreement and each other Transaction Document to which such Originator is a party has
been duly executed and delivered by such Originator. 
 (c) No Conflict. The execution and delivery by such Originator 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 applicable to it,
and do not result in the creation or imposition of any Adverse Claim on assets of such Originator or its Subsidiaries (except as created hereunder) except, in any case, where such contravention or violation is not reasonably likely to have a
Material Adverse Effect; and no transaction contemplated hereby requires compliance with any bulk sales act or similar law. 
 (d)
Governmental Authorization. Other than the filing of the financing statements required hereunder, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for
the due execution and delivery by such Originator of this Agreement and each other Transaction Document to which it is a party and the performance of its obligations hereunder and thereunder. 
 (e) Actions, Suits. There are no actions, suits or proceedings pending, or to the best of such Originator’s knowledge, threatened, before
any court, arbitrator or other body, that could reasonably be expected to have a Material Adverse Effect, except as previously disclosed or for which reserves in reasonable amounts have been established. Such Originator is not in default with
respect to any order of any court, arbitrator or governmental body. 
  

 7 

 (f) Binding Effect. This Agreement and each other Transaction Document to which such Originator
is a party constitute the legal, valid and binding obligations of such Originator enforceable against such Originator 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 written information heretofore furnished by such Originator or any of its Affiliates to the Buyer for purposes
of or in connection with this Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information hereafter furnished by such Originator or any of its Affiliates to the Buyer, as of the
date thereof, does not and will not contain any material misstatement of fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. 

(h) Use of Proceeds. No payment made to any Originator hereunder will be used for a purpose that violates Regulation T, U or X of the Board of
Governors of the Federal Reserve System. 
 (i) Good Title. Each Receivable which is sold to the Buyer hereunder shall be owned by
the respective Originator, free and clear of any Adverse Claim, except as provided herein or except as may be granted by the Buyer. Whenever the Buyer makes a purchase hereunder, it shall have acquired and shall continue to have maintained a valid
ownership interest (free and clear of any Adverse Claim) in the respective Originator’s entire right, title and interest in and to each Receivable and the Related Security with respect thereto. There have been duly filed all financing
statements or other similar instruments or documents necessary under the UCC of all appropriate jurisdictions to perfect the Buyer’s ownership interest in such Receivables and the Related Security to the extent such interest can be perfected by
filing a financing statement under the UCC. 
 (j) [Reserved]. 
 (k) Places of Business and Locations of Collection Records. The principal places of business and chief executive office of such Originator and
the offices where it keeps its Collection Records are located at the address(es) listed on Exhibit II or such other locations of which the Buyer 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. Such Originator’s Federal Employer Identification Number and Organization Identification Number are correctly set forth on Exhibit II. 
  

 8 

 (l) Collections. Such Originator has directed all Obligors on the Receivables originated by it
existing on or after the applicable Initial Cutoff Date to make payments thereon directly to a Collection Account or Lock-Box of the Buyer which is listed on Exhibit III hereto as the same may be amended from time to time. If any new
Lock-Boxes or Collection Accounts are established by an Originator after the date of this Agreement, such Originator will promptly provide the Buyer with a copy of an updated Exhibit III to this Agreement (and upon such delivery such Exhibit shall
be deemed to be amended accordingly notwithstanding anything in Section 7.1 hereof to the contrary). 
 (m) Material Adverse
Effect. Since December 31, 2002, no event has occurred that would have a Material Adverse Effect. 
 (n) Names. In the 5
years ending on the date of this Agreement, such Originator has not used any name in which a financing statement naming such Originator (or any entity which has merged with and into such Originator) as a debtor may be properly recorded and effective
to grant a security interest under the UCC as in effect in any applicable jurisdiction other than (i) the name in which it has executed this Agreement, and (ii) as listed on Exhibit II. 
 (o) Not an Investment Company. Such Originator is not an “investment company” within the meaning of the Investment Company Act
of 1940, as amended, or any successor statute. 
 (p) Compliance with Law. Each Receivable reflected in any Purchase Report as an
Eligible Receivable, together with the Invoice related thereto, does not violate 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 and privacy), except where such violation is not reasonably likely to have a Material Adverse Effect. 
 (q) Compliance with Credit and Collection Policy. Such Originator has complied in all material respects with the Credit and Collection Policy
with regard to each Receivable originated by it and the related Contract, and has not made any change since the applicable Initial Cut-Off Date to such Credit and Collection Policy, except such material change as to which the Buyer has been notified
and has consented, as required, in accordance with Section 4.1(a)(vi). 
 (r) Payments to such Originator. With respect
to each Receivable originated by such Originator and sold to the Buyer hereunder, the Purchase Price (and, if applicable, Purchase Interest) received by such Originator constitutes fair and reasonably equivalent value in consideration therefor.

 (s) Enforceability of Receivables. Each Receivable sold by such Originator to the Buyer hereunder is a legal, valid and binding
obligation of the related Obligor to pay the Outstanding Balance of the Receivable created thereunder and accrued Finance Charges (if any) 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). 
  

 9 

 (t) Eligible Receivables. Each Receivable reflected in any Purchase Report as an Eligible
Receivable was an Eligible Receivable on the date of its acquisition by the Buyer hereunder. 
 (u) Accounting. The manner in which
such Originator 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 Effectiveness. Effectiveness of this Agreement is subject to the conditions precedent that the Buyer
shall have received on or before the date thereof the documents listed on Schedule A. 
 Section 3.2 Conditions Precedent to
Subsequent Payments. The Buyer’s obligation to pay for Receivables coming into existence after the applicable Initial Cutoff Date shall be subject to the further conditions precedent that: (a) the Facility Termination Date shall not
have occurred under the Credit and Security Agreement; (b) the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) 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 such Originator 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 
 (ii) no event has occurred and is continuing that will constitute a Termination Event. 
 Notwithstanding the foregoing
conditions precedent, and subject to the applicable Originator’s receipt of payment of the Purchase Price for any Receivable, all of such Originator’s right, title and interest in and under such Receivable and the Related Security with
respect thereto shall vest in the Buyer, whether or not the conditions precedent to the Buyer’s obligation to pay for such Receivable were in fact satisfied. The failure of such Originator to satisfy any of the foregoing conditions precedent
may, however, give rise to a claim for indemnity under Article VI of this Agreement. 
  

 10 

 ARTICLE IV 
 COVENANTS 
 Section 4.1 Affirmative Covenants of Originators. Until the date on which
this Agreement terminates in accordance with its terms, each Originator hereby covenants as set forth below: 
 (a) Financial
Reporting. Such Originator will maintain, for itself and each of its Subsidiaries, a system of accounting established and administered in accordance with GAAP, and furnish to the Buyer (or, at any time the Credit and Security Agreement remains
in effect, the Agent as the Buyer’s assignee): 
 (i) Annual Reporting. Promptly upon the filing thereof with the Securities and
Exchange Commission, if applicable, and, in any event, within 90 days after the close of each of Parent’s fiscal years, audited, unqualified consolidated financial statements (which shall include balance sheets, statements of earnings and
stockholders’ equity and cash flows) for Parent and its consolidated Subsidiaries (which include such Originator) for such fiscal year, accompanied by an opinion of independent public accountants of recognized national standing. 
 (ii) Quarterly Reporting. Promptly upon the filing thereof with the Securities and Exchange Commission, if applicable, and, in any event, within
45 days after the close of the first three (3) quarterly periods of each of Parent’s fiscal years, consolidated balance sheets of Parent and its consolidated Subsidiaries (including such Originator) as at the close of each such period and
consolidated statements of earnings and stockholders’ equity and cash flows for Parent and its consolidated Subsidiaries for the period from the beginning of such fiscal year to the end of such quarter, all certified by a Responsible Financial
Officer of Parent. 
 (iii) Compliance Certificate. Together with the financial statements required hereunder, a compliance
certificate in substantially the form of Exhibit IV signed by an Authorized Officer of Parent 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 generally to the shareholders of Parent, 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 (other than registration statements on Forms S-8 or S-3 covering benefit or compensation plans, stock purchase or dividend repurchase plans, or for purposes of resales of securities by holders) and annual, quarterly or
other periodic reports which Parent or any of its Subsidiaries files with the Securities and Exchange Commission. 
 (vi) 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
indicating such proposed change or amendment and, if such proposed change is reasonably likely to adversely affect the collectibility of the Receivables generally or materially decrease the credit quality of newly created Receivables generally,
requesting the Buyer’s consent thereto. 
  

 11 

 (vii) Other Information. Promptly, from time to time, such other information, documents, records
or reports relating to the Receivables originated by such Originator or the condition or operations, financial or otherwise, of such Originator as the Buyer may from time to time reasonably request in order to protect the interests of the Buyer
under or as contemplated by this Agreement; provided, however, that the Buyer shall keep all such information which is not otherwise in the public domain confidential and require a confidentiality agreement from any third party that
may properly request such information. 
 (b) Notices. Such Originator will notify the Buyer 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 Unmatured Termination Events. The occurrence of each Termination Event and each Unmatured Termination Event, by a statement of an Authorized Officer of such Originator. 
 (ii) Material Adverse Effect. The occurrence of any event or condition that has had, or is reasonably likely to have, a Material
Adverse Effect. 
 (iii) ERISA Events. The occurrence of any ERISA Event. 
 (c) Compliance with Laws and Preservation of Existence. Such Originator 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 is not reasonably likely to have a Material Adverse Effect. Such Originator will preserve and maintain its legal existence,
rights, franchises and privileges in the jurisdiction of its organization, and qualify and remain qualified in good standing as a foreign entity in each jurisdiction where its business is conducted, except where the failure to so qualify or remain
in good standing is not reasonably likely to have a Material Adverse Effect. 
 (d) Audits. Such Originator will furnish to the Buyer
from time to time such information with respect to it and the Receivables sold by it as the Buyer may reasonably request. Such Originator will, from time to time during regular business hours as requested by the Buyer (or, at any time the Credit and
Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee), upon not less than two (2) Business Days’ prior written notice unless a Termination Event has occurred, permit the Buyer or their respective
agents or representatives: (i) to examine and make copies of and abstracts from all Other Records in the possession or under the control of such Originator relating to the Receivables and the Related Security, including, without limitation, the
related Contracts to the extent permitted by Section 1.5, and (ii) to visit the offices and properties of such Originator for the purpose of examining such materials described in clause (i) above, and to discuss, on a confidential
basis, matters relating to such Originator’s financial condition or the Receivables and the Related Security or such Originator’s performance under any of the Transaction Documents or such Originator’s performance under the Contracts
and, in each case, with any of the officers or employees of such Originator having knowledge of such matters. 
  

 12 

 (e) Keeping and Marking of Records and Books. 
 (i) Such Originator will maintain or will cause the Servicer to maintain 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). Such Originator will give, or will
direct the Servicer to give, the Buyer notice of any material change in the administrative and operating procedures referred to in the previous sentence. 
 (ii) Such Originator will (A) on or prior to the date on which it becomes a party to this Agreement, make appropriate notation in its computer files and other books and records relating to the Receivables
describing the Buyer’s ownership interests in the Receivables and (B) upon the request of the Buyer following the occurrence of a Termination Event, mark each Invoice applicable to any Receivable sold by such Originator to the Buyer
hereunder with a legend or code describing the Buyer’s ownership thereof. 
 (f) Compliance with Contracts and Credit and Collection
Policy. Such Originator will timely (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 originated by it, and
(ii) comply in all material respects with the Credit and Collection Policy in regard to each such Receivable and the related Contract. 
 (g) Ownership. Such Originator will take all necessary action to establish and maintain, irrevocably, the Buyer’s right, title and interest in and to the Receivables originated or acquired by such Originator and sold to the
Buyer hereunder, and to keep the Receivables and associated Related Security, in each case, free and clear of any Adverse Claims other than Adverse Claims in favor of the Buyer (including, without limitation, the filing
of all financing statements, continuation statements and/or financing statement amendments necessary under the UCC of all appropriate jurisdictions to perfect the Buyer’s interest in such Receivables and Related Security to the extent such
interest can be perfected by filing any of the foregoing under the UCC and such other action to perfect, protect or more fully evidence the interest of the Buyer as the Buyer may reasonably request). 
 (h) Agents’ and Lenders’ Reliance. Such Originator acknowledges that the Agents and the Lenders are relying upon the Buyer’s
identity as a legal entity that is separate from such Originator and its other Affiliates and agrees to take all reasonable steps to 

  

 13 

 
maintain the Buyer’s identity as a separate legal entity and to make it manifest to third parties that the Buyer is an entity with assets and
liabilities distinct from those of such Originator and its other Affiliates and not just a division thereof. Without limiting the generality of the foregoing and in addition to the other covenants set forth herein, such Originator (i) will not
hold itself out to third parties as liable for the debts of the Buyer nor purport to own any of the Receivables or Related Security sold to the Buyer hereunder, and (ii) will conduct all business with the Buyer on terms reasonably believed by
such Originator and the Buyer to be reasonably comparable to those applicable in transactions with an unaffiliated Person in similar circumstances. 
 (i) Taxes. To the extent not handled by Parent, such Originator 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. Such Originator will pay
when due any taxes payable in connection with the Receivables originated by it, exclusive of taxes on or measured by income or gross receipts of the Buyer and its assigns. 
 Section 4.2 Negative Covenants of Originators. Until the date on which this Agreement terminates in accordance with its terms, each
Originator hereby covenants that: 
 (a) Name Change, Offices and Collection Records. Such Originator will not (i) change its
state of organization, (ii) change its legal name, or (iii) relocate any office where Collection Records are kept by or on behalf of such Originator unless, in each of the foregoing cases, it shall have: (A) given the Buyer at least
30 days’ prior written notice thereof and (B) delivered to the Buyer all financing statements, instruments and other documents requested by the Buyer in connection with such change or relocation. 
 (b) Change in Payment Instructions to Obligors. Such Originator will not direct any Obligor on the Receivables sold by it to the Buyer hereunder
to make payments to any location other than to one of the Buyer’s Lock-Boxes or Collection Accounts listed on Exhibit III hereto as the same may be amended pursuant to Section 7.1(j) of the Credit and Security Agreement from
time to time by the Buyer upon not less than 30 days’ prior written notice to the Originators. 
 (c) Modifications to Credit and
Collection Policy. Such Originator will not, and will not cause or authorize the Servicer to, make any material change to the Credit and Collection Policy that would materially decrease the collectibility of its Receivables generally.

 (d) Sales, Liens. Such Originator will not sell, assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, or create or suffer to exist any Adverse Claim upon (including, without limitation, the filing of any financing statement) or with respect to, any Receivable or the Related Security, or upon or with respect to any Contract
under which any Receivable arises, or assign any right to receive income with respect thereto (other than, in each case, the creation of the interests therein in favor of the Buyer provided for herein), and such Originator will defend the right,
title and interest of the Buyer in, to and under any of the foregoing property, against all claims of third parties claiming through or under such Originator. 
  

 14 

 (e) Accounting for Purchases. Such Originator will not account for the transactions contemplated
hereby in any manner other than the sale for financial accounting purposes by such Originator to the Buyer of the Receivables sold and transferred by such Originator on or after the applicable Initial Cutoff Date through and including the
Termination Date, together with the associated Related Security, except to the extent that such transactions are not recognized on 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) Such Originator shall fail to make any payment or deposit required hereunder when due, or to perform or observe
any term, covenant or agreement hereunder or under any other Transaction Document to which it is a party and such failure shall continue for 30 days after written notice of such failure is given. 
 (b) Any representation, warranty, certification or statement made by such Originator 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; provided that the materiality threshold in the preceding clause
shall not be applicable with respect to any representation or warranty which itself contains a materiality threshold. 
 (c)
Failure of any Originator to pay any Indebtedness when due in excess of $25,000,000 (“Material Debt”); or the default by any Originator in the performance of any term, provision or condition contained in any agreement under
which any Material Debt was created or is governed, the effect of which is to cause, or to permit the holder or holders of such Material Debt to cause, such Indebtedness to become due prior to its stated maturity; or any Material Debt of any
Originator 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) An Event of Bankruptcy shall occur with respect to any Originator or any of its Material Subsidiaries. 
 (e) A Change of Control shall occur. 
 (f) One or more final judgments for the payment of money in an amount in excess of $25,000,000, individually or in the aggregate, shall be 

  

 15 

 
entered against any Originator 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. 
 (g) The PBGC or
Internal Revenue Service shall file any notice of lien on any of the Receivables or the Related Security and such lien shall not have been released within seven (7) days. 
 Section 5.2 Remedies. Upon the occurrence and during the continuation of a Termination Event, the Buyer 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 each Originator;
provided, however, that upon the occurrence of a Termination Event described in Section 5.1(d), the Termination Date shall automatically occur, without demand, protest or any notice of any kind, all of which are hereby
expressly waived by each Originator 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 such Originator to the Buyer. The aforementioned rights
and remedies shall be without limitation and shall be in addition to all other rights and remedies of the Buyer and, so long as the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee 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 Originators. Without limiting any other rights that the Buyer may
have hereunder or under applicable law, each Originator hereby agrees to indemnify (and pay upon demand to) the Buyer 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 and disbursements actually incurred (all of the foregoing being collectively referred to as
“Indemnified Amounts”) awarded against and actually paid or actually incurred by any of them arising out of or as a result of this Agreement or the acquisition, either directly or indirectly, by the Buyer of any interest in
the Receivables originated by such Originator, 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 arise out of or as a result of claims of one or more Indemnified Parties against another
Indemnified Party; 
  

 16 

 (c) Indemnified Amounts to the extent the same includes losses in respect of Receivables
originated by such Originator that are uncollectible on account of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor; or 
 (d) taxes imposed by the jurisdiction in which such Indemnified Party’s principal executive office is located, on or measured by the overall net income or gross receipts of such Indemnified Party; 
 provided, however, that nothing contained in this sentence shall limit the liability of such Originator or limit the recourse of the Buyer to such
Originator for amounts otherwise specifically provided to be paid by such Originator under the terms of this Agreement. Without limiting the generality of the foregoing indemnification, but subject in each case to clauses (a), (b) and
(c) above, each Originator shall indemnify the Buyer for Indemnified Amounts relating to or resulting from: 
 (i) any
representation or warranty made by such Originator (or any officers of such Originator) under or in connection with any Purchase Report, this Agreement, any other Transaction Document to which such Originator is a party or any other information or
report delivered by such Originator pursuant hereto or thereto for which the Buyer has not received a Purchase Price Credit that shall have been false or incorrect when made or deemed made; 
 (ii) the failure by such Originator, 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 such Originator to keep or perform any of its obligations, express or implied, with respect to
any Contract; 
 (iii) any failure of such Originator 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 goods 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 goods or service related to such Receivable or the furnishing or
failure to furnish such goods or services; 
  

 17 

 (vi) any Collections received, directly or indirectly by an Originator (or its agent)
which are not promptly remitted to Buyer; 
 (vii) any investigation, litigation or proceeding related to or arising from this
Agreement or any other Transaction Document, the transactions contemplated hereby, such Originator’s use of the proceeds of the Purchase from it hereunder, the ownership of the Receivables originated by such Originator or any other
investigation, litigation or proceeding relating to such Originator in which any Indemnified Party becomes involved as a result of any of the transactions contemplated hereby; 
 (viii) any inability to litigate any claim against any Obligor in respect of any Receivable reflected in any Purchase Report as being an
Eligible 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 to vest and maintain vested in the Buyer, or to transfer to the Buyer, ownership of the Receivables originated by such
Originator and purported to be conveyed to the Buyer hereunder, together with the associated Related Security, in each case, free and clear of any Adverse Claim; 
 (xi) 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 the applicable laws of Canada with respect to any Receivable originated by such Originator and the Related Security with respect thereto, and the proceeds of any thereof, whether at the time of the Purchase from such
Originator hereunder or at any subsequent time; 
 (xii) any action or omission by such Originator which impairs the rights of
the Buyer with respect to any Receivable or reduces the value of any such Receivable (for any reason other than the application of Collections thereto or charge-off of any Receivable as uncollectible) unless the Buyer has received a Purchase Price
Credit therefor; and 
 (xiii) the failure of any Receivable reflected as an Eligible Receivable on any Purchase Report
prepared by such Originator to be an Eligible Receivable at the time acquired by the Buyer. 
 Section 6.2 Other Costs and
Expenses. Each Originator shall pay to the Buyer on demand all reasonable costs and out-of-pocket expenses actually incurred in connection with the preparation, execution and delivery of this Agreement, the transactions contemplated hereby and
the other documents to be delivered hereunder. In addition to the foregoing, each Originator 

  

 18 

 
shall pay, on demand, any and all reasonable costs and expenses, including reasonable counsel fees and expenses, actually incurred by the Buyer (or, at any
time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) in connection with (i) any amendment to or waiver of this Agreement, and/or (ii) the enforcement of this Agreement and the
other documents delivered hereunder following a Termination Event. 
 ARTICLE VII 
 MISCELLANEOUS 
 Section 7.1 Waivers and Amendments. 
 (a) No failure or delay on the part of the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative
Agent as the Buyer’s assignee) 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 each Originator and the Buyer and, to the extent required under the Credit and Security Agreement, the applicable Agent and the Liquidity Banks or the Required Liquidity Banks. At any time while the
Credit and Security Agreement remains in effect, any material amendment, supplement, modification or waiver will require satisfaction of the Rating Agency Condition, if applicable. 
 Section 7.2 Notices. All communications and notices provided for hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other parties hereto at their respective addresses or telecopy numbers set forth on the signature pages hereof or at such other address or telecopy number as such Person may
hereafter specify for the purpose of notice to each of the other parties hereto. Each such notice or other communication shall be effective (a) if given by telecopy, upon the receipt thereof, (b) if given by mail, three (3) Business
Days after the time such communication is deposited in the mail with first class postage prepaid or (c) if given by any other means, when received at the address specified in this Section 7.2. 
 Section 7.3 Protection of Ownership Interests of the Buyer. 
 (a) Each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all instruments and documents, and take all actions, that may be necessary or desirable, or that the Buyer (or,
at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) may request, to perfect, protect or more fully evidence the interest of the Buyer (or, at any time the Credit and Security

  

 19 

 
Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) hereunder, or to enable the Buyer (or, at any time the Credit and
Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) to exercise and enforce their rights and remedies hereunder. At any time following a Termination Event, the Buyer (or, at any time the Credit and Security
Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) may, at such Originator’s sole cost and expense, direct such Originator to notify the Obligors of Receivables of the ownership interests of the Buyer under this
Agreement and may also direct that payments of all amounts due or that become due under any or all Receivables be made directly to the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the
Buyer’s assignee) or the Buyer’s (or such assigns’) designee. 
 (b) If any Originator fails to perform any of its obligations
hereunder, the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) may (but shall not be required to) perform, or cause performance of, such obligations, and the
Buyer’s (or such assignees’) costs and expenses incurred in connection therewith shall be payable by such Originator as provided in Section 6.2. Each Originator irrevocably authorizes the Buyer (and, at any time the Credit and
Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) at any time and from time to time in the sole discretion of the Buyer (or, at any time the Credit and Security Agreement remains in effect, the
Administrative Agent as the Buyer’s assignee), and appoints the Buyer (and, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) as its attorney(ies)-in-fact, to act on behalf
of such Originator (i) to execute on behalf of such Originator as debtor, in the event such Originator fails to timely execute, and to file financing statements necessary in the Buyer’s (or, at any time while the Credit and Security
Agreement remains in effect, the Administrative Agent’s) reasonable opinion to perfect and to maintain the perfection and priority of the interest of the Buyer in the Receivables originated by such Originator and (ii) in the event such
Originator fails to deliver any financing statement requested pursuant to the preceding clause (i), to file a carbon, photographic or other reproduction of this Agreement or any financing statement with respect to the Receivables as a financing
statement in such offices as the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) in their sole discretion deem necessary or desirable to perfect and to maintain the
perfection and priority of the Buyer’s interest in such Receivables. This appointment is coupled with an interest and is irrevocable. 
 Section 7.4 Confidentiality. 
 (a) Each Originator shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of the Fee Letters (under and as defined in the Credit and Security Agreement) and the electronic models and files (including electronic files containing model accounting entries for securitization
transactions) provided by any Agent or any Conduit in connection with the Credit and Security Agreement, provided, however, such information may be disclosed to third parties to the extent such disclosure is (i) required to comply
with any applicable law (including federal and state securities laws) or order of any judicial or administrative proceeding, or (ii) required in response to any summons or 

  

 20 

 
subpoena or in connection with any litigation, provided, further, that such Originator inform such person that such information is sensitive,
proprietary and confidential. Notwithstanding the foregoing, each Originator shall have no obligation of confidentiality in respect of any information which may be generally available to the public or becomes available to the public through no fault
of such Originator or its Affiliates. 
 (b) The Buyer (and, accordingly, each of its assignees) shall maintain, shall cause
each of its employees, officers and agents to maintain, and shall require the Lenders to maintain and to cause each of their respective employees, officers and agents to maintain, the confidentiality of any information obtained by it in respect of
the Receivables (including, without limitation, credit losses and delinquency levels) and any other proprietary or confidential information with respect to Parent, the Obligors, the Receivables, the Originators and the Servicer in communications
with third parties; provided, however, such information may be disclosed to third parties to the extent such disclosure is (i) required to comply with any applicable law (including federal and state securities laws) or order of
any judicial or administrative proceeding, or (ii) required in response to any summons or subpoena or in connection with any litigation, or (iii) to any Person specified in Section 14.5 of the Credit and Security Agreement on the
terms set forth therein. 
 Section 7.5 Bankruptcy Petition. 
 (a) Each Originator and the Buyer covenant and agree that, prior to the date that is one year and one day after the payment in full of all outstanding
senior indebtedness of all Conduits, it will not institute against, or join any other Person in instituting against, any Conduit 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) Each Originator 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 the Buyer under the Credit and Security Agreement, it will not institute against, or join any other Person in instituting against, the Buyer 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 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF GEORGIA. 
 Section 7.7 CONSENT TO JURISDICTION. ORIGINATOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
GEORGIA STATE COURT SITTING IN FULTON COUNTY, GEORGIA IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT 

  

 21 

 
TO THIS AGREEMENT AND ORIGINATOR 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 BUYER (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST ORIGINATOR IN THE COURTS OF ANY OTHER JURISDICTION. 
 Section 7.8 WAIVER OF JURY TRIAL. TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ORIGINATOR PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER OR THEREUNDER. 
 Section 7.9 Integration; Binding Effect; Survival of Terms. 
 (a) The Transaction Documents
contain the final and complete integration of all prior expressions by the parties hereto with respect to the sale and collection of the Receivables and Related Security and shall constitute the entire agreement among the parties hereto with respect
to such subject matter, superseding all prior oral or written understandings with respect to the sale and collection of the Receivables and Related Security. 
 (b) Nothing contained herein or in any other Transaction Document shall be deemed to prohibit or limit any merger or consolidation of an Originator with another Originator so long as any necessary financing statements
are filed, promptly after the effectiveness of such merger or consolidation, under the UCC in all jurisdictions necessary to make the representations and warranties contained in this Agreement true and correct after giving effect to such merger or
consolidation. Nothing contained herein or any other Transaction Document shall be deemed to prohibit or limit any new entity from becoming an Originator hereunder so long as items 2 through 10 of Schedule A attached hereto are satisfied by such
entity. This Agreement shall be binding upon and inure to the benefit of the Originators, the Buyer and their respective successors and permitted assigns (including any trustee in bankruptcy). No Originator may assign any of its rights and
obligations hereunder or any interest herein without the prior written consent of the Buyer; provided, however, that no consent of the Buyer shall be required in connection with an assignment by operation of law to the surviving
Originator in a merger or consolidation described in the first sentence of this Section 7.9(b). The Buyer may pledge or assign at any time its rights and obligations hereunder and interests herein to any other Person without the consent of any
Originator. Without limiting the foregoing, each Originator acknowledges that the Buyer, pursuant to the Credit and Security Agreement, may grant to the Administrative Agent for the benefit of the Secured Parties (under and as defined in the Credit
and Security Agreement), a security interest in the Buyer’s rights, remedies, powers and privileges hereunder. This Agreement shall create and constitute the continuing obligations of 

  

 22 

 
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 any Originator pursuant to Article II; (ii) the indemnification and payment provisions of
Article VI; and (iii) Section 7.4 shall be continuing and shall survive any assignment or termination of this Agreement. 
 Section 7.10 Counterparts; Severability; Section References. This Agreement may be executed in any number of counterparts and by different parties hereto in separate 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. Any provisions of this Agreement which 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. 
 <Signature pages follow> 
  

 23 

 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 in Wilmington, Delaware. 
  

			
	MOHAWK CARPET DISTRIBUTION, L.P.
		
	By:	 	 /s/ Scott R. Veldman

	Name:	 	Scott R. Veldman
	Title:	 	Vice President and Treasurer
		
	Address:	 	 160 S. Industrial Blvd.

 Calhoun, GA 30703

		 	 Attn: Scott R. Veldman

		 	 Phone: (706) 624-2103

		 	 Fax: (706) 624-2052

	
	DAL-TILE CORPORATION
		
	By:	 	 /s/ Scott R. Veldman

	Name:	 	Scott R. Veldman
	Title:	 	Vice President and Treasurer
		
	Address:	 	 160 S. Industrial Blvd.

 Calhoun, GA 30703

		 	 Attn: Scott R. Veldman

		 	 Phone: (706) 624-2103

		 	 Fax: (706) 624-2052

	
	DAL-TILE SSC WEST, INC.
		
	By:	 	 /s/ Scott R. Veldman

	Name:	 	Scott R. Veldman
	Title:	 	Vice President and Treasurer
		
	Address:	 	 160 S. Industrial Blvd.

 Calhoun, GA 30703

		 	 Attn: Scott R. Veldman

		 	 Phone: (706) 624-2103

		 	 Fax: (706) 624-2052

 [Signature Page to the Second Amended and Restated Receivables Purchase and Sale Agreement]

					
	DAL-TILE SSC EAST, INC.
		
	By:	 	 /s/ Scott R. Veldman

	Name:	 	Scott R. Veldman
	Title:	 	Vice President and Treasurer
		
	Address:	 	 160 S. Industrial Blvd.

 Calhoun, GA 30703

		 	 Attn: Scott R. Veldman

		 	 Phone: (706) 624-2103

		 	 Fax: (706) 624-2052

	
	MOHAWK FACTORING, INC.
		
	By:	 	 /s/ John Koach

	Name:	 	John Koach
	Title:	 	Assistant Treasurer and Secretary
			
		 	Address:	 	 300 Delaware Ave.

 Suite 1273 C

 Wilmington, Delaware 19801

		 		 	 Attn: John Koach

		 		 	 Phone: (302) 552-3100

		 		 	 Fax: (302) 552-3128

 [Signature Page to the Amended and Restated Receivables Purchase and Sale Agreement]

 Exhibit I 
 Definitions 
 This is Exhibit I to the Agreement (as hereinafter defined). As used in the Agreement
and the Exhibits and Schedules 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). 
 “Administrative Agent” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “Adverse Claim” means a lien, security interest, charge or encumbrance, or other right or claim in, of or on any Person’s
assets or properties in favor of any other Person. 
 “Agreement” means the Second Amended and Restated Receivables
Purchase and Sale Agreement, dated as of July 28, 2008, among Originators and the Buyer, as the same may be amended, restated or otherwise modified. 
 “BTMU” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “Business Day” means any day on which banks are not authorized or required to close in New York, New York or Atlanta, Georgia, and The Depository Trust Company of New York is open for business, and, if the applicable
Business Day relates to any computation or payment to be made with respect to the LIBO Rate, any day on which dealings in dollar deposits are carried on in the London interbank offering market. 
 “Buyer” has the meaning set forth in the preamble to the Agreement. 
 “Calculation Period” means each fiscal month of the Buyer or portion thereof which elapses during the term of the Agreement. The
first Calculation Period shall commence on the date of the initial Purchase hereunder and the final Calculation Period shall terminate on the Termination Date. For purposes of the use of this term in other definitions in Exhibit I to this
Agreement, Calculation Periods occurring prior to the date of the initial Purchase hereunder shall mean a fiscal month of the Buyer. 
 “Canadian Receivable” means a Receivable owing from an Obligor domiciled in, or organized under the laws of, Canada or one of its political subdivisions. 
 “Change of Control” means the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 30% or more of the outstanding shares of voting stock of Parent, or Parent ceases to own, directly or indirectly, all of
the outstanding shares of voting stock of each Originator. 
  

 3 

 “Co-Agent” has the meaning set forth in the Preliminary Statements to the
Agreement. 
 “Collection Accounts” means those accounts shown on Exhibit III, as the same may be amended from
time to time by the Buyer in accordance with the terms hereof. 
 “Collection Records” means, with respect to any
Receivable, all Invoices and all other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to amounts paid
on or owing in respect of such Receivable. 
 “Collection Services Agreement” means that certain Servicing Agreement
dated as of August 4, 2003 by and between the Buyer and Mohawk Servicing, Inc., as Servicer, providing for the collection and servicing of all Receivables held by the Buyer. 
 “Collections” means, with respect to any Receivable, all cash collections and other cash proceeds in respect of such Receivable,
including, without limitation, all Finance Charges or other related amounts accruing in respect thereof and all cash proceeds of Related Security with respect to such Receivable. 
 “Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take-or-pay contract or application for a letter of credit.

 “Contract” means, with respect to any Receivable, any and all instruments and agreements, purchase orders,
invoices, writings, or other communications pursuant to which such Receivable arises but excluding any Invoice. 
 “Credit and
Collection Policy” means each Originator’s credit and collection policies and practices relating to Contracts and Receivables existing on and as administered historically prior to the date on which it became or becomes a party to
this Agreement and summarized in Exhibit V, as modified from time to time in accordance with the Agreement. 
 “Credit and Security Agreement” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “Dal-Tile” has the meaning set forth in the preamble to the Agreement. 
 “Dal-Tile
East” has the meaning set forth in the preamble to the Agreement. 
 “Dal-Tile West” has the meaning set
forth in the preamble to the Agreement. 
  

 4 

 “Default Fee” means a per annum rate of interest equal to the sum of
(i) the Prime Rate, plus (ii) 2% per annum. 
 “Defaulted Receivable” means a
Receivable: (i) as to which the Obligor thereof has suffered an Event of Bankruptcy; (ii) which, consistent with the Credit and Collection Policy, would be written off Originator’s books as uncollectible; or (iii) as to which any
payment, or part thereof, remains unpaid for 61 days or more from the original due date for such payment. 
 “Delinquent
Receivable” means a Receivable as to which any payment, or part thereof, remains unpaid for 31-60 days from the original due date for such payment. 
 “Discount Factor” means a percentage calculated to provide the Buyer with a reasonable return on its investment in the Receivables originated by each Originator after taking account of
(i) the time value of money based upon the anticipated dates of collection of such Receivables and the cost to the Buyer of financing its investment in such Receivables during such period and (ii) the risk of nonpayment by the Obligors.
Each Originator and the Buyer 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, shall apply only prospectively and shall not affect the Purchase Price payment made prior to such Calculation Period during which such Originator and the Buyer agree to make such change. 
 “Eligible Receivable” means, at any time, a Receivable: 
 (i) the Obligor of which (a) if a natural person, is a resident of the United States or Canada or, if a corporation or other business
organization, is organized under the laws of the United States, Canada or any political subdivision of the United States or Canada and has its chief executive office in the United States or Canada; (b) is not an Affiliate of any of the parties
hereto; and (c) is not a government or a governmental subdivision or agency; provided, however, that in no event may the Canadian Receivables that are included as Eligible Receivables exceed 3% of total Receivables at any time,

 (ii) which is not a Defaulted Receivable, 
 (iii) which was not a Delinquent Receivable on (A) the date of Purchase (if such Receivable was in existence on the applicable
Initial Cutoff Date), or (B) the date on which such Receivable came into existence (in all other cases), 
 (iv) which
(A) by its terms is due and payable within 91 days of the original billing date therefor; provided, however, notwithstanding anything herein to contrary, any Receivable which by its terms is due and payable within 92-120 days of the
original billing date thereof shall be included as an Eligible Receivable, provided that the Outstanding Balance of all such Receivables shall not exceed 2.5% of the total Outstanding 

  

 5 

 
Balance of all Eligible Receivables, (B) has not had its payment terms extended more than once, and (C) will not, when added to all other Eligible
Receivables, cause the weighted average of the payment terms for all Eligible Receivables to exceed 50 days, 
 (v) which is
an “account,” a “payment intangible,” a “general intangible” or “chattel paper” within the meaning of Article 9 of the UCC in the applicable jurisdiction, and is not evidenced by an “instrument”
within the meaning of Article 9 of the UCC, 
 (vi) which is denominated and payable only in United States Dollars or Canadian
Dollars in the United States or Canada, 
 (vii) which is in full force and effect and constitutes the legal, valid and
binding obligation of the related Obligor enforceable against such Obligor in accordance with its terms, 
 (viii) which does
not contain a confidentiality provision that purports to restrict the ability of the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) to exercise its rights under this
Agreement, including, without limitation, its right to review the Contract or Invoice applicable thereto, 
 (ix) which
represents an obligation to pay a specified sum of money, contingent only upon (A) the sale of goods or the provision of services by the applicable Originator (which sale has been consummated or services have been performed), and
(B) satisfaction by such Originator of any applicable warranty claims which have not yet been made or asserted, 
 (x)
which does not contravene any law, rule or regulation applicable thereto (including, without limitation, any law, rule and regulation relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), 
 (xi) which satisfies all applicable requirements of the applicable Credit and Collection
Policy in all material respects, 
 (xii) which was generated in the ordinary course of the applicable Originator’s
business, 
 (xiii) which arises solely from the sale (and not the lease) of goods or the provision of services to the related
Obligor by the applicable Originator or a predecessor to such Originator, and not by any other Person (in whole or in part), 
  

 6 

 (xiv) which is not the subject of, to the Originator’s knowledge, any dispute,
counterclaim, right of rescission, set-off, counterclaim or any other defense (including defenses arising out of violations of usury laws) of the applicable Obligor against the applicable Originator or any other Adverse Claim, and the Obligor
thereon holds no right as against such Originator to cause such Originator to repurchase the goods or merchandise the sale of which shall have given rise to such Receivable (except with respect to sale discounts effected pursuant to the Contract, or
defective goods returned in accordance with the terms of the Contract) and which requires that all or part of such Receivables be charged off in accordance with the Credit and Collections Policy; provided, however, that
if such dispute, offset, counterclaim or defense affects only a portion of the Outstanding Balance of such Receivable, then such Receivable may be deemed an Eligible Receivable to the extent of the portion of such Outstanding Balance which is not so
affected, 
 (xv) as to which the applicable Originator has satisfied and fully performed all obligations on its part with
respect to such Receivable required to be fulfilled by it, and no further action is required to be performed by any Person with respect thereto other than payment thereon by the applicable Obligor (excluding any warranty obligations for which no
claim exists or is know to exist), and 
 (xvi) as to which each of the representations and warranties contained in Sections
2.1(i), (l) and (s) is true and correct. 
 “ERISA” means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any rule or regulation issued thereunder. 
 “ERISA Affiliate” means any
trade or business (whether or not incorporated) under common control with any Originator within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to
Section 412 of the Code). 
 “ERISA Event” means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by any Originator or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001 (a) (2) of ERISA) or a
cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by any Originator or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer
Plan; or (f) the imposition of any liability under Tide IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Originator or any ERISA Affiliate. 
  

 7 

 “Event of Bankruptcy” shall be deemed to have occurred with respect to a Person
if either: 
 (a) a case or other proceeding shall be commenced, without the application or consent of such Person, in any
court, seeking the liquidation, reorganization, debt arrangement, dissolution, winding up, or composition or readjustment of debts of such Person, the appointment of a trustee, receiver, custodian, liquidator, assignee, sequestrator or the like for
such Person or all or substantially all of its assets, or any similar action with respect to such Person under any law relating to bankruptcy, insolvency, reorganization, winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of 60 consecutive days; or an order for relief in respect of such Person shall be entered in an involuntary case under the federal bankruptcy laws or other similar laws now or
hereafter in effect; or 
 (b) such Person shall commence a voluntary case or other proceeding under any applicable
bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other similar law now or hereafter in effect, or shall consent to the appointment of or taking possession by a receiver, liquidator, assignee, trustee (other than a trustee
under a deed of trust, indenture or similar instrument), custodian, sequestrator (or other similar official) for, such Person or for any substantial part of its property, or shall make any general assignment for the benefit of creditors, or shall be
adjudicated insolvent, or admit in writing its inability to pay its debts generally as they become due, or, if a corporation or similar entity, its board of directors shall vote to implement any of the foregoing. 
 “Excluded Receivable” means a Receivable for which (i) any of Kmart Corporation (including without limitation, Kmart
Corporation d/b/a Kmart Fashions), Builders Square, Inc. or Sourcing & Technical Services, Inc., is the Obligor and (ii) any Obligor which is an Obligor designated in writing by an Originator to Buyer and approved in writing by the
Administrative Agent and the Co-Agents with respect to Receivables owing by such Obligor that arises on or after the date specified such written approval of such designation. 
 “Factored Receivable” means, with respect to any Originator, any right to payment for goods sold or services performed by such
Originator existing on or after the applicable Initial Cutoff Date which is sold or pledged to any factor and designated on such Originator’s accounting system with code “C”, “D”, “S”, “1” or any other
code identified as such in writing by the Originator to the Buyer (and, as long as the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee), or which directs that payment be made to a Person other
than the Buyer. 
 “Finance Charges” means, with respect to any Contract, any finance, interest, late payment charges
or similar charges owing by an Obligor pursuant to such Contract. 
  

 8 

 “Indebtedness” of a Person means such Person’s (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade),
(iii) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter owned or acquired by such Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) capitalized lease obligations, (vi) net liabilities under interest rate swap, exchange or cap agreements, (vii) Contingent Obligations and (viii) liabilities in respect of unfunded vested benefits under plans
covered by Title IV of ERISA. 
 “Initial Cutoff Date” means, as to each Originator, the close of business on the
Business Day immediately prior to the date on which such Originator became a party to the Existing Agreement or this Agreement, as applicable. 
 “Invoice” means any paper or electronic invoice evidencing any Receivable. 
 “Lock-Boxes” means those lock-boxes shown on Exhibit III, as the same may be amended from time to time by the Buyer in accordance with the terms hereof. 
 “Material Adverse Effect” means a material adverse effect on (i) the financial condition or results of operations of Parent
and its Subsidiaries, considered as a whole, (ii) the ability of any Originator to perform its obligations under this Agreement or any other Transaction Document to which such Originator is a party, (iii) the legality, validity or
enforceability of this Agreement or any other Transaction Document to which such Originator is a party, (iv) any Originator’s, the Buyer’s, any Agent’s or any Lender’s interest in the Receivables generally or in any
significant portion of the Receivables or the Related Security with respect thereto, or (v) the collectibility of the Receivables generally or of any significant portion of the Receivables. 
 “Material Subsidiary” means, as of the date of any determination thereof, any Subsidiary that either: (a) owns assets having
a book value equal to or greater than 5% of the consolidated total assets shown on the consolidated balance sheet of Parent and its consolidated subsidiaries, or (b) had net income for any prior period of four consecutive fiscal quarters equal
to or greater than 5% of the Parent’s and its consolidated subsidiaries consolidated net income shown on the statements of earnings for the same four fiscal quarter period. 
 “Mohawk Distribution” has the meaning set forth in the preamble to the Agreement. 
 “Monthly Reporting Date” means the 18th day of each calendar month hereafter (or if any such day is not a Business Day, the next
succeeding Business Day thereafter). 
 “Multiemployer Plan” means a “multiemployer plan,” within the
meaning of Section 4001(a)(3) of ERISA, to which any Originator or any ERISA Affiliate makes, is making, or is obligated to make contributions or, during the preceding three calendar years, has made, or been obligated to make, contributions.

  

 9 

 “Obligor” means a Person obligated to make payments on a Receivable. 

“Organizational Documents” means, for any Person, the documents for its formation and organization, which, for example,
(a) for a corporation are its corporate charter and bylaws, (b) for a partnership are its certificate of partnership (if applicable) and partnership agreement, (c) for a limited liability company are its certificate of formation or
organization and its operating agreement, regulations or the like and (d) for a trust is the trust agreement, declaration of trust, indenture or bylaws under which it is created. 
 “Original Balance” means, with respect to any Receivable coming into existence after the applicable Initial Cutoff Date, the
Outstanding Balance of such Receivable on the date it was created. 
 “Originator” has the meaning set forth in the
preamble to the Agreement. 
 “Other Records” means, with respect to any Receivable: (a) all Contracts and
(b) all other documents, books, records and other information (including, without limitation, computer programs, tapes, disks, punch cards, data processing software and related property and rights) relating to the creditworthiness of any
Obligor in respect thereof. 
 “Outstanding Balance” of any Receivable at any time means the then outstanding
principal balance thereof. 
 “Parent” means Mohawk Industries, Inc., a Delaware corporation, and its successors.

 “PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto. 
 “Pension Plan” means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA which any Originator
sponsors or maintains, or to which it makes, is making, or is obligated to make contributions, or in the case of a multiple employer plan (as described in Section 4064(a) of ERISA) has made contributions at any time during the immediately
preceding five plan years. 
 “Person” means an individual, partnership, corporation (including a business trust),
limited liability company, joint stock company, trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof. 
 “Plan” means an employee benefit plan (as defined in Section 3(3) of ERISA) which any Originator or any of its ERISA
Affiliates sponsors or maintains or to which any Originator or any of its ERISA Affiliates makes, is making, or is obligated to make contributions and includes any Pension Plan, other than a Plan maintained outside the United States primarily for
the benefit of Persons who are not U.S. residents. 
  

 10 

 “Purchase” means the purchase by the Buyer from an Originator pursuant to
Section 1.1(a) of the Agreement of the Receivables originated by such Originator and the Related Security related thereto, together with all related rights in connection therewith. 
 “Purchase Price” means, with respect to the Purchase from each Originator, the aggregate price to be paid by the Buyer to such
Originator for such Purchase in accordance with Section 1.2 of the Agreement for the Receivables originated by such Originator and the associated Related Security being sold to the Buyer, 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. 
 “Purchase Report” has the meaning set forth in
Section 1.1(b) of the Agreement. 
 “Rating Agency Condition” means, at any time the Credit and Security
Agreement remains in effect, the Rating Agency Condition as defined therein. 
 “Receivable” means all indebtedness
and other obligations owed to an Originator, at the times it arises and before giving effect to any transfer or conveyance under the Agreement, arising in connection with the sale of goods or the rendering of services by such Originator or a
predecessor (including, without limitation, any indebtedness, obligation or interest constituting an account, instrument, chattel paper or general intangible, if any) together with the obligation, if any, to pay any Finance Charges with respect
thereto and all proceeds thereof; provided, however, in no event shall the term “Receivable” include any Factored Receivable, Excluded Receivable or any Receivable coming into existence after the Termination
Date. All Receivables are identified with the legend pay to Buyer or similar language. For purposes of this Agreement, indebtedness and other rights and obligations arising from any one transaction, including, without limitation, indebtedness and
other rights and obligations represented by an individual invoice, shall constitute a Receivable separate from a Receivable consisting of the indebtedness and other rights and obligations arising from any other transaction; provided,
further, that any indebtedness, rights or obligations referred to in the immediately preceding sentence shall be a Receivable regardless of whether the account debtor or such Originator treats such indebtedness, rights or obligations
as a separate payment obligation. 
 “Related Security” means, with respect to any Receivable: 
 (i) all of the applicable Originator’s interest, if any, in the goods (including returned or repossessed goods), the sale of which by
such Originator gave rise to such Receivable, 
 (ii) all other security interests or liens and property subject thereto from
time to time, if any, purporting to secure payment of such Receivable, together with all financing statements and security agreements describing any collateral securing such Receivable, 
  

 11 

 (iii) all guaranties, letters of credit, credit insurance and other agreements or
arrangements of whatever character from time to time supporting payment of such Receivable, 
 (iv) all service contracts and
agreements, if any, associated with such Receivable, 
 (v) all Collections and Collection Records related to such Receivable,
and 
 (vi) all other proceeds and insurance proceeds of any of the foregoing or of any Receivable. 
 “Reportable Event” means any of the events set forth in Section 4043(c) of ERISA or the regulations thereunder, other than
any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. 
 “Responsible Financial Officer” of Parent means any of its chief financial officer, vice president & corporate controller or vice president & treasurer, acting singly. 
 “Servicer” means Mohawk Servicing, Inc. and its permitted successors and assigns. 
 “Settlement Date” means the second Business Day after each Monthly Reporting Date. 
 “STRH” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “Subsidiary” of a Person means (i) any corporation more than 50% of the outstanding securities having ordinary voting power
of which shall at the time be owned or controlled, directly or indirectly, by such Person or by one or more of its Subsidiaries or by such Person and one or more of its Subsidiaries, or (ii) any partnership, association, limited liability
company, joint venture or similar business organization more than 50% of the ownership interests having ordinary voting power of which shall at the time be so owned or controlled. 
 “Termination Date” means the earliest to occur of (i) the date on which the Buyer is unable to pay the Purchase Price for
any Receivable in accordance with Section 1.2, (ii) the Business Day immediately prior to the occurrence of a Termination Event set forth in Section 5.1(d), (iii) the Business Day specified in a written notice from
the Buyer (or, at any time the Credit and Security Agreement remains in effect, the Administrative Agent as the Buyer’s assignee) to the Originators following the occurrence of any other Termination Event, (iv) the date which is 5 Business
Days after the Buyer’s receipt of written notice from any Originator that it wishes to terminate sales under this Agreement, and (v) the date which is 5 Business Days after each Originator receives written notice that the Buyer wishes to
terminate purchases under this Agreement. 
  

 12 

 “Termination Event” has the meaning set forth in Section 5.1 of the
Agreement. 
 “TPF” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “TPF Agent” has the meaning set forth in the Preliminary Statements to the Agreement. 
 “Transaction Documents” means, collectively, this Agreement, the Collection Services Agreement, and all Purchase Reports.

 “Unmatured Termination Event” means an event which, with the passage of time or the giving of notice, or both,
would constitute a Termination Event. 
 “Victory” has the meaning set forth in the Preliminary Statements to the
Agreement. 
 “Victory Agent” has the meaning set forth in the Preliminary Statements 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 Georgia, and not specifically defined herein, are used herein as defined in such Article 9. 
  

 13Contract of Sale & Security Agreement

 Exhibit 10.1 
 

 
  

 CONTRACT OF SALE & SECURITY AGREEMENT 
 This Contract of Sale and Security Agreement dated for purposes of reference August 1, 2008 is between the undersigned, Tully’s Coffee Corporation, hereinafter
called “CLIENT”, and “Northrim Funding Services, a division of Northrim Bank, hereinafter called “NFS/BANK”, agree as follows: 
 PURPOSE OF AGREEMENT & GENERAL UNDERSTANDINGS: 
  

	1.	CLIENT desires to obtain short-term operating capital funding by selling to NFS/BANK ALL of CLIENT’S Accounts Receivable and all rights securing payment of
such Accounts Receivable. Subject to the terms and conditions of this Agreement, NFS/BANK agrees to purchase ALL of CLIENT’S Accounts Receivable, (XXX) with recourse
(            ) without recourse, from time to time at a discount below face value of such Accounts Receivable. 

  

	2.	Each party understands and agrees that ALL of CLIENT’S Accounts Receivable (including credit memo’s and invoices, excluding purchase orders and
“pre-billings”), whether now existing or hereafter created by CLIENT, are to be sold to NFS/BANK hereunder; provided, however, the maximum amount funded by NFS/BANK shall be limited to the amount of the
Purchase Formula for the funding of ALL of CLIENT’S Acceptable/Eligible Accounts or the amount specified in Section 49 below, whichever is less. 

  

	3.	Prior to the occurrence of an Event of Default, CLIENT shall be responsible for collecting ALL of CLIENT’S Accounts Receivable. 

  

	4.	NFS/BANK shall maintain the database of CLIENT’S Accounts Receivable from which Acceptable/Eligible Accounts shall be determined and the amount of the Purchase
Formula shall be calculated. The amount of the Purchase Formula shall be determined from time to time by NFS/BANK in its discretion. CLIENT agrees, on a timely basis, to transmit to NFS/BANK all data necessary for
NFS/BANK to maintain an accurate and timely record of all CLIENT’S Accounts Receivable. CLIENT further agrees, on a timely basis, to provide to NFS/BANK such reports from CLIENT’S accounting systems that
NFS/BANK may require to permit the accurate and timely reconciliation of NFS/BANK’S database of CLIENT’S Accounts Receivable to that maintained by CLIENT. 

  

	5.	Subject to the terms and conditions of this Agreement, CLIENT may request a funding against the purchase of Accounts Receivable hereunder; provided that after giving
effect to such request, the total amount funded by NFS/BANK to CLIENT for the purchase of Accounts Receivable hereunder will not exceed the amount of the Purchase Formula for the funding of ALL of the Acceptable/Eligible Accounts or
the amount specified in Section 49 below, whichever is less. 

  

	6.	The fees payable by CLIENT hereunder shall be calculated on the amounts funded by NFS/BANK for the purchase of CLIENT’S Accounts Receivable. Except as
otherwise agreed in writing, CLIENT shall not be charged additional fees calculated on the face amount of the invoices supporting Accounts Receivable purchased. 

 DEFINITIONS: 
  

	7.	“Account Receivable” means any right of payment from a customer of CLIENT, whether or not earned by performance, for (a) goods sold or leased and delivered to
such a customer of CLIENT or (b) services rendered to a customer of CLIENT, in each case whether now existing or hereafter arising. 

  

	8.	“Acceptable/Eligible Account” means an Account Receivable (specific invoice or specific debtor) created by CLIENT in the ordinary course of its business, whether
now existing or hereafter created by CLIENT, conforming to the Warranties and terms set forth herein that has not been outstanding for more than 100 DAYS from the date of invoice for such Account Receivable, has been underwritten and
approved by NFS/BANK, and has not been reduced from the original amount billed by, credit memo, offset, adjustment of any kind, or partial payment subsequent to invoice date. 

  

	9.	“Client Deposit Account” means deposit account no. 153910272993 maintained by CLIENT at US Bank. 

  

	10.	“Client Liability” means, at any time, the total amount funded by NFS/BANK to CLIENT for the purchase of Accounts Receivable hereunder.

  

	11.	“Collateral” means the intangible or tangible property given as collateral security to NFS/BANK by CLIENT for any obligations and liabilities of
CLIENT to NFS/BANK under this Agreement, including the property described on Exhibit A attached hereto. 

  

			
	Form Date 11/04	  	                     Page 1
  

 Acknowledgement
                         

 

 
  

	12.	“Credit Problem” means Customer/Debtor is unable to pay his debts because of cash flow problems or insolvency. 

  

	13.	“Customer/Debtor” means a customer of CLIENT or other person or party who owes payment to CLIENT. 

  

	14.	“Customer/Debtor Dispute” means any claim by a Customer/Debtor against CLIENT, of any kind whatsoever, valid or invalid, that reduces the amount collectible from
Customer/Debtor by NFS/BANK. 

  

	15.	“Event of Default” has the meaning given in the section of this Agreement titled “DEFAULT.” 

  

	16.	“Funding Availability Report” means a report provided by NFS/BANK setting forth as of the date of such report, the amount of the Purchase Formula, the Client
Liability amount and the amount available to CLIENT for funding against the purchase of Accounts Receivable hereunder. 

  

	17.	“Lock Box” means post office lockbox no. 50245, Bellevue, WA 98015-0245, established and maintained for CLIENT at NFS/BANK (or other lock box service
provider approved by NFS/BANK) through which lockbox services are provided to CLIENT. 

  

	18.	“NFS/Bank Account” means a deposit account maintained by NFS/BANK in its own name. 

  

	19.	“Purchase Formula” means at any time, and amount equal to 130.00% of the net amount of all Acceptable/Eligible Accounts. 

  

	20.	“Schedule of Accounts” means one or more written assignments of Accounts Receivable and associated lien rights prepared by CLIENT on forms provided by
NFS/BANK. 

  

	21.	“Warrant” means to guarantee, as a material element of this Agreement. 

 ACCOUNTING & FEES: 
  

	22.	Amounts funded by NFS/BANK to CLIENT for the purchase of Accounts Receivable hereunder are subject to a daily fee equal to the prime rate reported in the
“Money Rates” column or section of The Wall Street Journal as being the base rate on corporate loans at larger U.S. Money Center Banks on such date (the “Index Rate”) + 6% /360 calculated on the Client Liability on
such date as determined by NFS/BANK and set forth in the Funding Availability Report provided to CLIENT for such date. The calculation period will usually be 1 calendar day except for weekends and or weeks where holidays or other
non-operating days prevent the fee from being taken on a daily basis. In the event The Wall Street Journal ceases publication of the prime rate, then the “Index Rate” shall be such substantially similar interest rate selected by
NFS/BANK. 

  

	23.	Except as otherwise agreed in writing, fees payable by CLIENT to NFS/BANK shall be payable in arrears on Wednesday of each week unless such date is not a business day
in which case payment shall be made on the next following business day. CLIENT agrees that on each day that fees are payable by CLIENT to NFS/BANK, CLIENT shall be deemed to have requested a funding against the purchase
of Accounts Receivable hereunder in the amount of the fees payable on such day. 

  

	24.	NFS/BANK agrees to provide to CLIENT on each business day, via fax or e-mail, a Funding Availability Report form setting forth the “net” due NFS/BANK
for the purposes of making funds available to CLIENT hereunder. The “net” reflects the liability due NFS/BANK less the value of funds held in the NFS/Bank Account which have not yet been applied to Client Liability.

  

	25.	CLIENT understands and agrees that all payments received by NFS/BANK in respect of the Accounts Receivable will be held on the NFS/Bank Account for a period of 3
(Three) business days before being applied to the Client Liability to allow for the application of collected funds. 

  

	26.	CLIENT may request a funding against the purchase of Accounts Receivable hereunder on any business day that that it receives a Funding Availability Report form from
NFS/BANK. Provided that CLIENT completes, acknowledges and returns the Funding Availability Report form to NFS/BANK, via fax or e-mail, with the proper approved CLIENT authorized signature not later than 11:45 a.m.
(Seattle time) on the day such Funding Availability Report form is received, subject to the terms and conditions of this Agreement, NFS/BANK agrees to deposit the proceeds of the requested funding into the Client Deposit Account by wire
transfer or otherwise, on the date of such request. 

 LOCK BOX PROCESSING: 
  

	27.	All checks or other evidences of payment received in the Lock Box, shall be scanned into a digital image file, and reported to the CLIENT using e-mail and attaching the
scanned (check images) document file for the checks or other evidences of payment received. NFS/BANK (or other lock box service provider approved by NFS/BANK) will deposit into the NFS/Bank Account all payments received through the
Lock Box on the same business day checks or other evidences of payment are received and processed through the Lock Box. 

  

			
	Form Date 11/04	  	                     Page 2
  

 Acknowledgement
                         

 

 
  

	28.	Provided that NFS/BANK shall have received from CLIENT, either by electronic format or via hard copy, all data necessary for NFS/BANK to maintain an accurate
and timely record of CLIENT’S Accounts Receivable, NFS/BANK agrees to apply payments deposited into the NFS/Bank Account to the active Account Receivable invoices on the first business day following the date of such payments.
Until such time as NFS/BANK shall have received from CLIENT the data necessary to maintain an accurate and timely record of CLIENT’S Accounts Receivable, all payments deposited into the NFS/Bank Account shall remain
unapplied. 

  

	29.	Mistaken, incorrect and/or erroneous Account Receivable invoices submitted by CLIENT to NFS/BANK may at the discretion of NFS/BANK be deemed an Account
Receivable that is subject to Customer/Debtor Dispute and such Account Receivable shall cease to be an Acceptable/Eligible Account. 

 CLIENT COVENANTS & CONDITIONS: 
  

	30.	CLIENT agrees to sell to NFS/BANK ALL of CLIENT’S Accounts Receivable and rights securing payment of such Accounts Receivable. CLIENT understands
and agrees that the maximum amount funded by NFS/BANK for the purchase ALL of CLIENT’S Accounts Receivable (and all rights securing payment of such Accounts Receivable) shall be limited to the amount of the Purchase Formula for
the funding of ALL of the Acceptable/Eligible Accounts or the amount specified in Section 49 below, whichever is less. 

  

	31.	CLIENT will provide to NFS/BANK the (            ) ORIGINAL (invoice) together with one copy
thereof, or (XXX) COPY (invoice) of the invoice supporting each Account Receivable and, if requested by NFS/BANK, a copy of the bill of lading contract, purchase order, purchase order number, and/or any other supporting documentation
corresponding to such Account Receivable or otherwise appropriate to the business of CLIENT. 

  

	32.	CLIENT agrees to prepare, execute and deliver to NFS/BANK a Schedule of Accounts for ALL of CLIENT’S Accounts Receivable and rights to payment securing
payment of such Accounts Receivable. The execution and delivery of a Schedule of Accounts Receivable shall transfer to NFS/BANK all of CLIENT’S right, title and ownership to ALL of CLIENT’S Accounts Receivable
described in such Schedule of Accounts and all rights to payment securing payment of such Accounts Receivable. CLIENT understands and agrees that no Account Receivable shall be deemed an Acceptable/Eligible Account unless NFS/BANK
receives from CLIENT notice of such Account Receivable, either by electronic format or via hard copy, supported by a Schedule of Accounts signed by the CLIENT. 

  

	33.	CLIENT agrees, and by this Agreement NFS/BANK is authorized, to properly mark the supporting documentation corresponding to each Account Receivable to indicate that
such Account Receivable has been assigned and sold to NFS/BANK, and NFS/BANK is authorized to notify Customer/Debtor of said sale and assignment. NFS/BANK in its discretion shall determine what constitutes the proper marking of
supporting documentation, which may be limited to using the post office box no. for the Lock Box or it could include a full notification to the Customer/Debtor indicating the Account Receivable has been assigned and sold to NFS/BANK.

  

	34.	CLIENT represents and Warrants to and agrees with NFS/BANK that: 

  

	 	a.	CLIENT is sole and absolute owner of each and every Account Receivable and all rights securing payment of such Accounts Receivable (including mechanic’s liens and rights
to payment under any stop notices, or bonded stop notices), sold and assigned to NFS/BANK hereunder, and CLIENT has full legal right, power and authority to sell and assign such Accounts Receivable and other rights to NFS/BANK
hereunder. 

  

	 	b.	All Accounts Receivable sold and assigned to NFS/BANK hereunder shall represent a bona fide and true sale of goods delivered to and accepted by a Customer/Debtor or
performance of services rendered to a Customer/Debtor. No Account Receivable sold and assigned to NFS/BANK hereunder is contingent upon the fulfillment or the goods sold and the goods cannot be returned under a sub provision of a purchase
order for failure to achieve sell through by the Customer/Debtor. 

  

	 	c.	No Account Receivable sold and assigned to NFS/BANK hereunder is subject to a joint check agreement. 

  

	 	d.	CLIENT is an ongoing business concern and is not insolvent (as such term is used in the Uniform Fraudulent Transfer Act). To CLIENT’S knowledge and belief; no
Customer/Debtor obligated on any Account Receivable sold and assigned to NFS/BANK hereunder is insolvent. 

  

	 	e.	Except as expressly set forth on the face of the invoice corresponding to such Account Receivable, the terms for payment of each Account Receivable sold and assigned to
NFS/BANK hereunder is Net 30 days. No Account Receivable sold and assigned to NFS/BANK hereunder is contingent upon the fulfillment by CLIENT of any further performance of any nature whatsoever. 

  

	 	f.	CLIENT agrees to not accept any returns or grant any allowances or credits greater than $400.00 in respect of any Account Receivable sold and assigned to NFS/BANK
hereunder without the prior written approval of NFS/BANK. There are no known setoffs, Customer/Debtor Disputes, adverse claims, defenses, and/or liens whatsoever against the payment of any Account Receivable sold and assigned to
NFS/BANK hereunder and no mechanic’s liens with respect to any such Accounts Receivable have been assigned or encumbered by CLIENT in any manner whatsoever. 

  

			
	Form Date 11/04	  	                     Page 3
  

 Acknowledgement
                         

 

 
  

	 	g.	Immediately upon sale and assignment of an Account Receivable to NFS/BANK hereunder, CLIENT will make proper entries on its books and records disclosing that such
Account Receivable has been assigned and sold to NFS/BANK. 

  

	 	h.	CLIENT will post no payments, cash, or credit memo’s unless it is reflected in a payment/collections report from NFS/BANK. 

  

	 	i.	CLIENT will promptly notify NFS/BANK in writing of any proposed change in CLIENT’S place of business, name, type of legal entity, organizational
structure, jurisdiction of organization, record-keeping location, and/or as to any additional place of business, or expiration of any special license(s), or transfer of assets, or technology, to a third party, or proposed change in ownership in
excess of fifteen percent, (15%), of outstanding shares or equity; 

  

	 	j.	CLIENT does not own, control, manage, participate in management, or have any involvement and/or association whatsoever with the business of any Customer/Debtor obligated on
any Account Receivable sold and assigned to NFS/BANK hereunder. 

  

	 	k.	There are no UCC-1 financing statements now on file in any public office that names or has been signed by CLIENT as the debtor and covers accounts (including the Accounts
Receivable), chattel paper, documents, general Intangibles, instruments or inventory (including work-in-process) of CLIENT, except the financing statement or statements filed or to be filed in respect to this Agreement, or those statements
now on file that have been disclosed in writing by CLIENT to NFS/BANK prior to the date of this Agreement. 

  

	 	l.	CLIENT will not authorize any person or party to file any financing statement that names CLIENT as the debtor and covers accounts (including the Accounts Receivable),
chattel paper, documents, general Intangibles, instruments or inventory (including work-in-process) of CLIENT, except the financing statement or statements filed or to be filed in respect to this Agreement. 

  

	 	m.	CLIENT is not delinquent in paying any taxes (Federal, State and/or Local), CLIENT has not been subject to any tax levy or lien by any governmental entity and there
are no tax levies and/or liens now on file in any public office tax that affecting CLIENT, other than those delinquencies, levies and/or liens which have been disclosed by CLIENT to NFS/BANK prior to the date of this Agreement.

  

	 	n.	All records, financial statements, books, or other documents provided to NFS/BANK by CLIENT at any time, whether before or after the signing of this Agreement, are
true and accurate in all material respects. 

  

	 	o.	CLIENT has served or caused to be served all preliminary 10-day notices required by applicable law to perfect or enforce any mechanic’s lien applicable to Accounts
Receivable sold and assigned to NFS/BANK hereunder to insure perfection of ownership for NFS/BANK, and the information contained on those preliminary 10-day notices is true, correct, and properly recorded, to CLIENT’S
knowledge and belief; waivers and releases for all labor, services, equipment, or material of CLIENT and others will be submitted on NFS/BANK’s form concurrent with Accounts Receivable. 

  

	35.	CLIENT and NFS/BANK agree that NFS/BANK will have (XXX) FULL RECOURSE or
(            ) Limited Recourse against CLIENT in respect of Accounts Receivable sold and assigned to NFS/BANK hereunder and CLIENT shall be liable to
repay to NFS/BANK all amounts funded by NFS/BANK to CLIENT in consideration for the sale and assignment of Accounts Receivable to NFS/BANK hereunder. 

  

	36.	All Accounts Receivable shall be the sole property of NFS/BANK, but if for any reason CLIENT shall receive any payment in respect of an Account Receivable; CLIENT
shall promptly notify NFS/BANK of such payment, shall hold any check, draft, money or other evidences of payment so received in trust and for the benefit of NFS/BANK, and shall pay over such checks or other evidences of payment
in-kind, or money, to NFS/BANK promptly and without delay. 

  

	37.	CLIENT will not deposit any funds received from a Customer/Debtor as payment on an invoice supporting an Account Receivable sold and assigned to NFS/BANK hereunder
(whether a full or partial payment or a Customer/Debtor deposit) to any account other than an account maintained by CLIENT at NFS/BANK or other account approved by NFS/BANK. 

  

	38.	CLIENT will cause all Account Receivable invoices to bear the address of the Lock Box as the “REMIT TO” address, and will cause all Customer/Debtors to make ALL
remittances for payment on ALL Accounts Receivable to the Lock Box. 

  

	39.	CLIENT agrees to provide NFS/BANK with periodic bank records and statements, accounts receivable agings, accounts payable agings, journals, related checking or
transaction NFS/BANK account records, and other information as requested by NFS/BANK from time to time. 

  

			
	Form Date 11/04	  	                     Page 4
  

 Acknowledgement
                         

 

 
  

	40.	CLIENT is properly licensed and authorized to operate the business of Tully’s Coffee Corporation, under the trade name of N/A, and CLIENT’S trade name
has been properly filed and published as required by the laws of the State of Washington. 

  

	41.	CLIENT has obtained all the necessary and proper licensing necessary to conduct business and operate legally, and conform with the laws regarding construction, hazardous
waste, labor issues, and special permit requirements. 

  

	42.	CLIENT will not sell any Accounts Receivable, or pledge any Accounts Receivable as security to any person or party other than NFS/BANK, except specific Accounts
Receivable which have been subordinated and/or released by NFS/BANK in writing. NFS/BANK agrees to provide such subordinations on non-eligible Accounts Receivable or specific invoices, or releases where appropriate in a commercially
reasonable time and manner. 

  

	43.	CLIENT will not transfer, pledge, or give a security interest of the Accounts Receivable sold or Collateral granted to NFS/BANK to any other party.

  

	44.	CLIENT will not change, or modify the terms of any invoice, bill of lading contract, purchase order, and/or any other documentation supporting any Account Receivable sold and
assigned to NFS/BANK without the prior written approval of NFS/BANK. NFS/BANK agrees to provide a prompt response to any request by CLIENT to change or modify such invoices. For example, CLIENT may not extend
credit to a Customer/Debtor beyond Net 30 days or the time set forth on the face of purchased invoice without the prior written approval of NFS/BANK. 

  

	45.	CLIENT will immediately notify NFS/BANK of any attachment or any other legal process levied against CLIENT. Failure to notify NFS/BANK in a commercially
reasonable manner shall constitute an Event of Default. 

  

	46.	CLIENT will immediately notify NFS/BANK of Customer/Debtor Disputes greater than $400.00 in total for any one Customer/Debtor. 

 POWER OF ATTORNEY: 
  

	47.	In order to carry out the purposes of this Agreement, CLIENT irrevocably appoints NFS/BANK, or any person designated by NFS/BANK, as its special
attorney-in-fact, or agent, with power to: 

  

	 	a.	Strike out the address of CLIENT on all invoices mailed to Customer/Debtors and place on the invoice the address of the Lock Box and/or the address of NFS/BANK.

  

	 	b.	Receive, direct and forward, open, and dispose of all mail addressed to CLIENT or to CLIENT’S fictitious trade name to the address of the Lock Box and/or the
address of NFS/BANK. 

  

	 	c.	Endorse the name of CLIENT or CLIENT’S fictitious trade name on any checks or other evidences of payment that may come into the possession of NFS/BANK on
Accounts Receivable sold and assigned to NFS/BANK hereunder and on any other documents supporting or otherwise relating to Accounts Receivable sold and assigned to NFS/BANK hereunder. 

  

	 	d.	In CLIENT’S name, or otherwise, demand, sue for, collect, and give release for any and all monies due, or to become due on Accounts Receivable sold and assigned
to NFS/BANK hereunder. 

  

	 	e.	Do any and all things necessary and proper to carry out the purpose intended by this Agreement. 

  

	 	f.	Execute any documents necessary to perfect or to continue any security interest and without further authorization from CLIENT file in any relevant jurisdiction any initial
financing statements (including fixture filings) and amendments thereto that contain the information required by the Uniform Commercial Code of each applicable jurisdiction for the filing of any financing statement or amendment.

  

	48.	The authority granted NFS/BANK shall remain in full force and effect until the Client Liability and all other obligations and liabilities of CLIENT to NFS/BANK
under this Agreement have been indefeasibly paid in full. 

 NFS/BANK COVENANTS: 
  

	49.	Subject to the terms and conditions of this Agreement, NFS/BANK agrees to fund against the purchase of Accounts Receivable hereunder an amount not to exceed the sum of
($5,000,000.00) Five Million and 00/100 or the Purchase Formula for the purchase of ALL of the Acceptable/Eligible Accounts, whichever is less. 

  

	50.	This Agreement shall have an initial term ending October 31, 2008 unless terminated by either party giving not less than thirty (30) days prior written notice to
the other party. 

  

	51.	NFS/BANK shall identify in writing all Acceptable/Eligible Accounts and provide to CLIENT, upon request, a written statement thereof. 

  

			
	Form Date 11/04	  	                     Page 5
  

 Acknowledgement
                         

 

 
  

 COLLATERAL: 
  

	52.	As collateral security for the payment of the Client Liability and all other obligations and liabilities of CLIENT to NFS/BANK under this Agreement, whether now owing
or hereafter arising, CLIENT hereby grants to NFS/BANK a security interest in ALL of CLIENT’S Accounts Receivable AND the following described property: 

 See Exhibit A attached 
  
  

	53.	CLIENT will maintain such insurance covering CLIENT’S business and/or the property; and the specific collateral granted to NFS/BANK. Each such policy of
insurance shall name NFS/BANK as an additional insured thereunder as its interests may appear and, in the case of each casualty insurance policy, contain a loss payable clause or endorsement that names NFS/BANK as the loss payee
thereunder and provides for at least thirty (30) days prior written notice to NFS/BANK of the cancellation of such policy. 

  

	54.	CLIENT agrees to execute any and all documents and do any and all acts which NFS/BANK may request to perfect and maintain the perfection of the security interest of
NFS/BANK in the Collateral. 

 DEFAULT: 
  

	55.	The occurrence of any one or more of the following shall constitute an event of default hereunder (each, an “Event of Default”): 

  

	 	a.	If CLIENT shall fail to pay any amount of indebtedness to NFS/BANK when owing; 

  

	 	b.	If CLIENT shall be in breach of any term, provision, Warranty, or representation under this Agreement, or any other agreement related hereto; 

  

	 	c.	If bankruptcy or insolvency proceedings shall be instituted by or against CLIENT; 

  

	 	d.	If any Account Receivable sold and assigned to NFS/BANK hereunder or any Collateral shall be attached, levied upon, seized in any legal proceeding, and not released within 5
business days thereof; 

  

	 	e.	If CLIENT shall cease doing business and there shall exist any indebtedness or commitments by CLIENT to NFS/BANK; 

  

	 	f.	If any Accounts Receivable, documents, statements, or other writings submitted by CLIENT to NFS/BANK prove false or inaccurate in any material respect;

  

	 	g.	If CLIENT has contributed to, or aggravated any Customer/Debtor Dispute, the bankruptcy or insolvency of any Customer/Debtor obligate on any Account Receivable sold and
assigned to NFS/BANK hereunder and/or such Customer/Debtor’s ability and/or willingness to pay any such Account Receivable; 

  

	 	h.	If any judgment or tax levy or lien shall be rendered against CLIENT and such judgment or tax levy or lien shall continue without being discharged, vacated, released or
execution thereon stayed pending appeal for a period of 30 consecutive days; 

  

	 	i.	If NFS/BANK with commercially reasonable cause and in good faith determines that it’s ownership of the purchased Accounts Receivable or its security interest in the
Collateral is impaired for any reason whatsoever; 

  

	 	j.	This Agreement is terminated by either party prior to the end of its initial term; or 

  

	 	k.	Any change in CLIENT’S place of business, name, type of legal entity, organizational structure, jurisdiction of organization, record-keeping location, and/or as
to any additional place of business, or expiration of any special license(s), or transfer of assets, or technology, to a third party, or proposed change in ownership in excess of fifteen percent, (15%), of outstanding shares or equity.

 REMEDIES AFTER DEFAULT: 
  

	56.	Upon the occurrence of an Event of Default and at any time thereafter, NFS/BANK may do any one or more of the following: 

  

	 	a.	Declare the Client Liability and all other obligations and liabilities of CLIENT to NFS/BANK under this Agreement immediately due and payable;

  

	 	b.	Notify any and all Customer/Debtors and take possession of the Accounts Receivable and Collateral and collect any receivables or funds paid to CLIENT all without judicial
process; 

  

	 	c.	Require CLIENT to assemble the Collateral and the records pertaining to the Accounts Receivable and other Collateral, and make them available to NFS/BANK at a place
designated by NFS/BANK; 

  

	 	d.	Enter the premises of CLIENT and take possession of the Collateral and of the records pertaining to the Accounts Receivable and other Collateral; 

  

			
	Form Date 11/04	  	                     Page 6
  

 Acknowledgement
                         

 

 
  

	 	e.	Grant extensions, compromise claims and settle Accounts Receivable for less than face value, all without prior notice to CLIENT; 

  

	 	f.	Use, in connection with any assembly or disposition of the Collateral, any trademark, trade name, trade style, copyright, patent right or technical process used or utilized by
CLIENT; 

  

	 	g.	Return any surplus realized to CLIENT after deduction of reasonable expenses, attorney’s fees for collection work or on appeal, collection costs, independent third party
auditors, incurred by NFS/BANK in resolving such Event of Default(s); 

  

	 	h.	Hold CLIENT liable for any deficiency; 

  

	 	i.	Establish a reserve from the collection of Accounts Receivable to meet reasonable legal expenses associated with a future defense resulting from an action brought against
NFS/BANK by CLIENT, Customer/Debtors, or other third party, as a result of an action of default; 

  

	 	j.	Cause an Injunction against CLIENT taking any action with regard to the Accounts Receivable or other Collateral; and 

  

	 	k.	Receive, direct and forward, open, and dispose of all mail addressed to CLIENT at any address used by CLIENT to receive mail. 

  

	57.	Without limiting the foregoing, if bankruptcy or insolvency proceedings shall be instituted by or against CLIENT, the Client Liability and all other obligations and
liabilities of CLIENT to NFS/BANK under this Agreement shall become immediately due and payable. 

 GENERAL:

  

	58.	After termination CLIENT remains fully responsible to NFS/BANK for all obligations and liabilities existing, or which may yet arise in connection with the Accounts
Receivable that remain unpaid or unsatisfied, including offsets or disgorgements from an action in bankruptcy. 

  

	59.	At such time as the Client Liability and all other obligations and liabilities of CLIENT to NFS/BANK under this Agreement (other than contingent expense reimbursement
and indemnification provisions) have been indefeasibly paid in full, NFS/BANK agrees, at the cost and expense of CLIENT, to provide CLIENT with a written assignment of all the Accounts Receivable that remain unpaid or
unsatisfied at such time. 

  

	60.	If during the term hereof CLIENT fails to make any payment required, NFS/BANK may at its discretion pay the same and charge CLIENT therefore with interest
thereon at the interest rate specified in Section 22 above. 

  

	61.	CLIENT will not, under any circumstances, or in any manner whatsoever, interfere with any of NFS/BANK’S rights under this Agreement. Specifically, upon the
occurrence of an Event of Default, CLIENT shall not interfere with any collection efforts undertaken by NFS/BANK by communicating with Customer/Debtors or otherwise interfering with NFS/BANK’S collection of the Accounts
Receivable. 

  

	62.	CLIENT will furnish NFS/BANK upon request satisfactory proof of payment and/or compliance with all Federal, State and/or Local tax requirements.

  

	63.	In the event that legal action, including arbitration, is taken by CLIENT or NFS/BANK to enforce this Agreement, the losing party will pay any and all legal expenses
and reasonable attorney’s fees, paralegal fees, staff overtime expense, travel costs, costs on appeal, or other reasonable collection costs, that the prevailing party may incur as a result of such legal action. 

  

	64.	CLIENT shall hold NFS/BANK harmless against any liability, damages, loss, attorneys’ fees and costs of any type due to any action by a Customer/Debtor arising
from NFS/BANK’S collecting or attempting to collect any Accounts Receivable so long as these collections are performed in a commercially reasonable manner and in compliance with all applicable laws, rules and regulations. This indemnity
shall survive termination of this Agreement. 

  

	65.	This Agreement inures to the benefit of and is binding upon the heirs, executors, administrators, successors and assigns of the parties thereto. 

  

	66.	All rights, remedies and powers granted to NFS/BANK in this Agreement, or in any note, or other agreement made by CLIENT in connection with this Agreement are
cumulative and may be exercised singularly or concurrently with such other rights as NFS/BANK may have. These rights may be exercised from time to time as to all or any part of the Accounts Receivable and/or the Collateral as NFS/BANK
in its discretion may determine. 

  

	67.	This Agreement may not be amended or modified except by written agreement of the parties thereto. NFS/BANK may not waive its rights and remedies unless the waiver is in
writing and signed by NFS/BANK. A waiver by NFS/BANK of a right, or remedy under this Agreement on one occasion is not a waiver of the right, or remedy on any subsequent occasion. 

  

			
	Form Date 11/04	  	                     Page 7
  

 Acknowledgement
                         

 

 
  

	68.	This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, excluding its conflicts of laws rules. CLIENT hereby consents to the
exclusive jurisdiction of the State of Washington in any dispute arising hereunder or related hereto. Venue for any actions shall be in King County, Washington. 

  

	69.	This Agreement is solely for the benefit of NFS/BANK and CLIENT and there are no other persons or parties who are intended to be benefited by this Agreement.
CLIENT will not pledge the credit of NFS/BANK to any other person, or party for any purpose whatsoever. 

  

	70.	If any provision of this Agreement shall be declared illegal or contrary to law, it is agreed that such provision shall be disregarded and this Agreement shall continue in force as
though such provision had not been incorporated herein. 

  

	71.	This Agreement, together with the other written agreements entered into by the parties in connection with this Agreement contains the entire agreement between the parties.

  

	72.	This Agreement becomes effective when it is accepted and executed by the authorized officers of NFS/BANK. Execution of this document may contain multiple signature pages;
each shall be considered, when combined, as one signed and executed document. 

 Executed this
             day of                     , 20
    . 
 At: Seattle, Washington. 
  

			
	Tully’s Coffee Corporation
		
	By:	 	 
	Title:	 	 
		
	By:	 	 
	Title:	 	 

 Accepted this              day of
                    , 20     . 
 At: Bellevue, Washington. 
  

			
	Northrim Funding Services, a division of Northrim Bank
		
	By:	 	 
	Title:	 	 

  

			
	Form Date 11/04	  	                     Page 8
  

 Acknowledgement
                         

 

 
  

 Exhibit A 
 SECURITY AGREEMENT – ACCOUNTS 
 CLIENT, for consideration of this Agreement, to secure the payment of the
Client Liability and all other obligations and liabilities of CLIENT to NFS/BANK under this Agreement, hereby grants to NFS/BANK a security interest in the following property, and any and all property of a like type now owned or hereafter
acquired by the Client, together with all additions, substitutions, and proceeds therefrom, and all increases, renewals, and replacements of all or any part thereof (hereinafter called the “Collateral”): 
 All of clients accounts, contract rights, chattel paper, instruments, general intangibles, and rights to payment of every kind, together with all cash
and non-cash proceeds thereof, now due or at any time hereafter coming due to Client; all interest of the Client in any goods, the sale or lease of which shall have given or shall give rise to any of the foregoing including goods refused or returned
to Client, wherever located. 
  

			
	Form Date 11/04	  	                     Page 9
  

 Acknowledgement
                         

 

 
  

 INVENTORY SECURITY AGREEMENT 
 Client: Tully’s Coffee Corporation 
 Client Address: 3100 Airport Way South 
                             Seattle WA 98134 
 Secured Party: Northrim Funding Services, a division of Northrim Bank, hereafter referred to as (NFS/BANK); 
 Secured Party Address is: 170 120th Avenue N.E., P O Box 50245 Bellevue, WA. 98015-0245. 
 COLLATERAL: 
 Client, for consideration of funding by NFS/BANK, hereby grants to the NFS/ BANK a security interest in the following property, and any and all
property of a like type now owned or hereafter acquired by CLIENT, together with all additions, substitutions, proceeds, and products there from, and all increases, parts, fittings, accessories, equipment, special tools, renewals, and
replacements of all or any part thereof (hereinafter called the ‘Collateral’): 
 All inventory, including raw materials, work in process, finished
goods, and materials used or consumed in CLIENT’s business, held for sale or lease or to be furnished under service contracts, whether now owned or hereafter acquired and all products thereof, whether in the possession of the CLIENT,
warehouseman, bailee, or any other person, wherever located. 
 OBLIGATIONS SECURED: 
 This Security Agreement shall secure: 
  

	1.	the payment of all liabilities due NFS/BANK per the contract of sale and agreement dated, August 1, 2008 executed and delivered by CLIENT to NFS/BANK for $5,000,000.00
(The Maximum Purchase Amount) 

  

	2.	any and all advances, to purchase Accounts or provide fund operating capital for CLIENT 

  

	3.	all other liabilities (primary, secondary, direct, contingent, sole, joint, or several) due or to become due or which may be hereafter contracted or acquired, for CLIENT to
NFS/BANK; and performance by CLIENT of the agreements hereinafter set forth. 

 WARRANTIES AND COVENANTS OF THE CLIENT:

  

	4.	Except for the security interest granted hereby, CLIENT is the owner of the Collateral free from any prior lien, security interest, or encumbrance; CLIENT has the
right to make this Agreement; and the CLIENT will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein. 

  

	5.	The CLIENT will not transfer or encumber the Collateral or any interest therein without the prior written consent of NFS/BANK, provided, however, that until default,
CLIENT may sell the Collateral in the ordinary course of business. So long as any liability to NFS/BANK is outstanding, CLIENT will not, without the prior written consent of NFS/BANK, borrow from anyone except
NFS/BANK or grant any security interest in any account to anyone except NFS/BANK. Further, CLIENT will not permit the Collateral to be attached or replevined. 

  

	6.	The Collateral will be located at the CLIENT’S business address(‘s) in the ordinary course of business. 

  

	7.	CLIENT shall not remove the Collateral from said location(s) without the prior written consent of NFS/BANK. 

  

	8.	CLIENT will pay all taxes and assessments of every nature that may be levied or assessed against the Collateral. 

  

	9.	The CLIENT will keep the Collateral at all times insured against risk of loss or damage by fire (including so-called extended coverage), theft, and such other casualties as
NFS/BANK may reasonably require, all in such amounts, under such forms of policies, upon such terms, for such periods, and written by such companies or underwriters as NFS/BANK may approve, losses in all cases to be payable to the
NFS/BANK and the CLIENT as their interests may appear. All policies of insurance shall provide for at least ten (10) days prior written notice of cancellation to NFS/BANK, and the CLIENT shall furnish the
NFS/BANK with certificates of such insurance or other evidence satisfactory to the NFS/BANK as to compliance with the provisions of this paragraph. NFS/BANK may act as attorney for the CLIENT in making, adjusting, or
settling claims under or canceling such insurance and endorsing the CLIENT’S name on any drafts drawn up by insurers of the Collateral. 

  

	10.	The Collateral is in good condition, and CLIENT will at his expense keep the same in good condition and from time to time, forthwith, replace and repair all such parts of the
Collateral as may be broken, worn out, or damaged without allowing any lien to be created upon the Collateral on account of such replacement or repairs, and will not waste or destroy the Collateral, and NFS/BANK may examine and inspect the
Collateral at any time, wherever located. 

  

			
		  	                     Page 2
  

 

 
  

	11.	CLIENT will not use the Collateral in violation of any applicable statutes, regulations, or ordinances. 

  

	12.	If CLIENT is a corporation, its Certificate or Articles of Incorporation and Bylaws do not prohibit any term or condition of this Agreement, and when executed this Agreement
shall be a binding obligation of the corporation. 

  

	13.	CLIENT will notify NFS/BANK, in writing, prior to the time CLIENT changes his name or, in the case of an organization, its name, identity or corporate structure.

  

	14.	CLIENT will: 

  

	 	a.	maintain the Collateral in such quantities that at all times the Collateral is at least equal in value to the Obligations to NFS/BANK; 

  

	 	b.	sell the Collateral only in the ordinary course of business; 

  

	 	c.	furnish NFS/BANK at such interval as NFS/BANK may prescribe, with a CLIENT’S Certificate (in such form as NFS/BANK may from time to time specify)
showing the aggregate cost and wholesale market value of its inventory; 

  

	 	d.	keep accurate and complete records of the Collateral; 

  

	 	e.	give NFS/BANK such financial statements and reports and other data concerning its accounts, contracts, collections, collateral, and other matters as NFS/BANK may from
time to time specify, and permit NFS/BANK or its nominee to examine all of CLIENT’S records relating thereto at any time, to make extracts therefrom; 

  

	 	f.	at NFS/BANK’S option, deposit the proceeds of all sales of Collateral in a special account established for that purpose with NFS/BANK; and

  

	 	g.	at NFS/BANK’S request, notify accounts of CLIENT that their accounts receivable have been assigned to NFS/BANK and shall be paid to
NFS/BANK. 

  

	 	h.	CLIENT agrees that NFS/BANK shall have full power to notify account CLIENT’S, collect, compromise, endorse, sell, or otherwise deal with proceeds in its
own name or that of CLIENT at any time. NFS/BANK may apply cash proceeds to the payment of any Obligations, or may release such cash proceeds to CLIENT 

 EVENTS OF DEFAULT: 
  

	15.	CLIENT will be in default under this Agreement upon the happening of any of the following events or conditions: 

  

	 	a.	Default in the payment or performance of any obligation, covenant, or liability contained or referred to herein or in any contract evidencing the same or in any other agreement
securing the same; 

  

	 	b.	The making or furnishing of any warranty, representation, or statement to NFS/BANK by or on behalf of the CLIENT which proves to have been false in any material
respect when made or furnished; 

  

	 	c.	Loss, theft damage, destruction, sale, or encumbrance to or of any of the Collateral, or the making of any levy, seizure, or attachment thereof or thereon; 

 

	 	d.	Death, dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or
the commencement of any proceeding under any bankruptcy or insolvency laws of, by, or against CLIENT or any guarantor or surety for CLIENT. 

  

	 	e.	Failure to perform any of the conditions and requirements of the contract between CLIENT and NFS/BANK referenced above, dated July 17, 2008. 

 RIGHTS UPON DEFAULT: 
  

	16.	Upon default and at any time thereafter, or if it deems itself insecure, NFS/BANK may declare all obligations secured hereby immediately due and payable, and NFS/BANK
shall have all the rights and remedies of a NFS/BANK under Article 9 of the Uniform Commercial Code or other applicable law and all the rights provided herein, in the contracts and agreements evidencing the obligations secured hereby, or in
any other applicable security or agreement, all of which rights and remedies shall, to the full extent permitted by law, be cumulative 

  

	17.	NFS/BANK may require CLIENT to assemble the Collateral and make it available to NFS/BANK at a place to be designated by NFS/BANK, which is reasonably
convenient to both parties. Any notice of sale, disposition, or other intended action by NFS/BANK, sent to CLIENT at the address specified above, or such other address of CLIENT as may from time to time be shown on
NFS/BANK’S records, at least five (5) days prior to such action, shall constitute reasonable notice to CLIENT. Expenses of retaking, holding, preparing for sale, selling, or the like shall include NFS/BANK’S
reasonable attorney’s fees and legal expenses, and the same, together with all advances made by NFS/BANK on behalf of the CLIENT, shall be part of the Obligations secured hereby. 

 GENERAL PROVISIONS: 
  

	18.	No waiver by NFS/BANK of any default shall operate as a waiver of any other default or of the same default on a future occasion. The taking of this Security Agreement shall
not waive or impair any other security or contractual rights NFS/BANK may have or hereafter acquire for the payment of the above liability, nor shall the taking of any such additional security waive or impair this Security Agreement; but said
NFS/BANK may resort to any security it may have in the order it may deem proper, and not withstanding any collateral security, NFS/BANK shall retain its rights of setoff against CLIENT. 

  

			
		  	                     Page 3

 

 
  

	19.	NFS/BANK is hereby appointed CLIENT’S attorney in fact, at NFS/BANK’S option and CLIENT’S expense, to do all acts and things which
NFS/BANK may deem necessary to perfect and continue to perfect the security interest created by this Security Agreement and to protect the Collateral. 

  

	20.	At its option, but without obligation to the CLIENT, NFS/BANK may discharge taxes, liens, security interests, or other encumbrances at any time levied or placed on the
Collateral; may place and pay for insurance thereon; may order and pay for the repair, maintenance, and preservation thereof; and may pay any necessary filing or recording fees. The CLIENT agrees to reimburse NFS/BANK on demand for
payment made or any expense incurred by NFS/BANK pursuant to the foregoing authorization. 

  

	21.	Until default, CLIENT may have possession of the Collateral and use it in any lawful manner not inconsistent with this Agreement or any policy of insurance thereon, and upon
default NFS/BANK shall have immediate right to possession of the Collateral, provided, however, that CLIENT agrees that NFS/BANK may perfect its interest in the Collateral by possession. 

  

	22.	All rights of NFS/BANK hereunder shall inure to the benefit of its successors and assigns; and all promises and duties of CLIENT shall bind his legal representatives,
successors, or assigns. 

  

	23.	Except as otherwise provided by the Uniform Commercial Code, CLIENT releases NFS/BANK from all claims for loss or damage caused by an act or omission on the part of
NFS/BANK, its officers, agents, and employees, except willful misconduct. 

  

	24.	Should any provision of this Agreement be deemed unlawful or unenforceable, said provision shall be deemed several and apart from all other provisions of this Agreement and all
remaining provisions of this Agreement shall be fully enforceable. 

  

	25.	A carbon or photographic copy or other reproduction of this Security Agreement or any financing statement prepared in connection therewith may be filed or recorded as a financing
statement to perfect the security interest described herein. 

  

	26.	This Agreement shall be governed by and interpreted in accordance with the laws of the State of Washington . Further, the place where this Agreement is entered into, and the place
of performance and transaction of business shall be deemed to be the State of Washington and in the event of litigation, the exclusive forum, venue, and place of jurisdiction shall be the State of Washington, King County. 

DATED this              day of
             ,             . 
  

			
	Tully’s Coffee Corporation
		
	By:	 	 
	Title:	 	 

  

			
		  	                     Page 4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00145-of-00352.parquet"}]]