<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarterly Period Ended July 3, 1994
Commission File Number 0-12016
------------------------------
INTERFACE, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
GEORGIA 58-1451243
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ORCHARD HILL ROAD, P.O. BOX 1503, LAGRANGE, GEORGIA 30241
---------------------------------------------------------
(Address of principal executive offices and zip code)
(706) 882-1891
----------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---
Shares outstanding of each of the registrant's classes of common stock at
July 29, 1994:
Class Number of Shares
- - ---------------------------------------------- ----------------
Class A Common Stock, $.10 par value per share 15,109,328
Class B Common Stock, $.10 par value per share 3,082,025
Page 1 of ____________ Pages
The Exhibit Index appears at page _____.
<PAGE> 2
INTERFACE, INC.
Index
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. FINANCIAL INFORMATION
Item 1. Consolidated Condensed Financial Statements
Balance Sheets - July 3, 1994 and January 2, 1994 3
Statements of Income - Three Months and Six Months
Ended July 3, 1994 and July 4, 1993 4
Statements of Cash Flows -
Six Months Ended July 3, 1994 and July 4, 1993 5
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in the Rights of the Company's Security
Holders 10
Item 3. Defaults by the Company on Its Senior Securities 10
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 10
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
(In thousands)
- - ------------------------------------------------------------------------ July 3, January 2,
ASSETS 1994 1994
- - ------------------------------------------------------------------------ --------- ---------
<S> <C> <C>
CURRENT ASSETS:
Cash and Cash Equivalents $ 1,921 $ 4,674
Escrowed and Restricted Funds 2,695 4,015
Accounts Receivable 134,300 124,170
Inventories 139,042 116,041
Deferred Tax Asset 2,539 2,539
Prepaid Expenses 16,057 15,078
-------- --------
TOTAL CURRENT ASSETS 296,554 266,517
PROPERTY AND EQUIPMENT, less
accumulated depreciation 150,654 145,125
EXCESS OF COST OVER NET ASSETS ACQUIRED 202,378 195,143
OTHER ASSETS 35,966 35,534
-------- --------
$685,552 $642,319
======== ========
LIABILITIES AND COMMON SHAREHOLDERS' EQUITY
- - -----------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts Payable 62,413 56,043
Accrued Expenses 45,327 52,744
Current Maturities of Long-Term Debt 16,900 17,155
-------- --------
TOTAL CURRENT LIABILITIES 124,640 125,942
LONG-TERM DEBT, less current maturities 204,656 187,712
CONVERTIBLE SUBORDINATED DEBENTURES 103,925 103,925
DEFERRED INCOME TAXES 19,390 17,856
-------- --------
TOTAL LIABILITIES 452,611 435,435
-------- --------
Redeemable Preferred Stock 25,000 25,000
Common Stock:
Class A 1,871 1,793
Class B 308 311
Additional Paid-In Capital 94,240 83,989
Retained Earnings 129,467 125,960
Foreign Currency Translation Adjustment (199) (12,423)
Treasury Stock, 3,600
Class A Shares, at Cost (17,746) (17,746)
-------- --------
$685,552 $642,319
======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
(In thousands except per share amounts)
Three Months Ended Six Months Ended
-------------------- --------------------
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Sales $181,665 $150,045 $342,384 $283,713
Cost of Sales 126,117 102,602 238,492 195,035
-------- -------- -------- --------
Gross Profit on Sales 55,548 47,443 103,892 88,678
Selling, General and Administrative Expense 43,408 36,726 81,313 69,258
-------- -------- -------- --------
Operating Income 12,140 10,717 22,579 19,420
Other (Expense) Income - Net (6,342) (6,412) (12,386) (11,722)
-------- -------- -------- --------
Income before Taxes on Income 5,798 4,305 10,193 7,698
Taxes on Income 2,087 1,508 3,670 2,697
-------- -------- -------- --------
Net Income 3,711 2,797 6,523 5,001
Less: Preferred Dividends 437 53 875 53
-------- -------- -------- --------
Net Income Applicable to Common Shareholders $ 3,274 $ 2,744 $ 5,648 $ 4,948
======== ======== ======== ========
Primary Earnings Per Common Share $ 0.18 $ 0.16 $ 0.32 $ 0.29
======== ======== ======== ========
Weighted Average Common Shares Outstanding 18,175 17,265 17,834 17,265
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
INTERFACE, INC. AND SUBSIDIARIES
Consolidated Condensed Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
-----------------------------------
July 3, July 4,
(In thousands) 1994 1993
- - -------------- --------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 6,523 $ 5,001
Adjustment to reconcile net income
to cash provided by operating activities:
Depreciation and amortization 14,357 11,993
Deferred income taxes 970 (27)
Cash provided by (used for):
Accounts receivable (4,385) 4,519
Inventories (13,156) (2,504)
Prepaid and other 217 (4,097)
Accounts payable and accrued expenses (10,455) (6,324)
--------- ---------
(5,929) 8,561
--------- ---------
INVESTING ACTIVITIES:
Capital expenditures (9,182) (6,805)
Acquisitions of businesses (643) (14,920)
Other 2,511 (1,236)
--------- ---------
(7,314) (22,961)
--------- ---------
FINANCING ACTIVITIES:
Net borrowing of long-term debt 12,734 15,144
Issuance of common stock 453 0
Dividends paid (3,015) (2,072)
--------- ---------
10,172 13,072
--------- ---------
Net cash provided by operating,
investing and financing activities (3,071) (1,328)
Effect of exchange rate changes on cash 318 (93)
--------- ---------
CASH AND CASH EQUIVALENTS:
Net increase (decrease) during the period (2,753) (1,421)
Balance at beginning of period 4,674 5,824
--------- ---------
Balance at end of period $ 1,921 $ 4,403
========= =========
</TABLE>
See accompanying notes to consolidated condensed financial statements.
5
<PAGE> 6
INTERFACE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
NOTE 1 - CONDENSED FOOTNOTES
As contemplated by the Securities and Exchange Commission instructions
to Form 10-Q, the following footnotes have been condensed and, therefore, do
not contain all disclosures required in connection with annual financial
statements. Reference should be made to the notes to the Company's year-end
financial statements contained in its Annual Report to Shareholders for the
fiscal year ended January 2, 1994, as filed with the Securities and Exchange
Commission.
NOTE 2 - INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
July 3, January 2,
1994 1994
-------- ----------
<S> <C> <C>
Finished Goods $ 76,363 $ 64,497
Work-in-Process 24,564 20,010
Raw Materials 38,116 31,534
-------- --------
$139,042 $116,041
======== ========
</TABLE>
NOTE 3 - BUSINESS ACQUISITIONS
On March 29, 1994, the Company acquired 100% of the outstanding shares
of Prince Street Technologies, Ltd. ("PST"), a broadloom carpet producer
located in Atlanta, Georgia. The Company issued 674,953 shares of Class A
Common Stock in exchange for 100% of the outstanding shares of PST. The
transaction has been accounted for as a purchase, and the operations of PST are
included in the consolidated results of the Company from the date of the
acquisition.
NOTE 4 - EARNINGS PER SHARE AND DIVIDENDS
Earnings per share are computed by dividing net income applicable to
common shareholders by the combined weighted average number of shares of Class A
and Class B common stock outstanding during each year. The computation does not
include a negligible dilutive effect of stock options. Neither the Convertible
Debentures issued in September 1988 nor the Preferred Stock issued in June 1993
were determined to be common stock equivalents. In computing primary earnings
per share, the preferred stock dividend reduces income
6
<PAGE> 7
INTERFACE, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
applicable to common shareholders. For the periods ended July 3, 1994 and July
4, 1993, fully diluted earnings per common share were antidilutive. For the
purposes of computing earnings per share and dividends paid per share, the
Company is treating as treasury stock (and therefore not outstanding) the
shares that are owned by a wholly-owned subsidiary (3,600,000 Class A shares,
recorded at cost).
________________________________________________________________________
The financial information included in this report has been prepared by
the Company, without audit, and should not be relied upon to the same extent as
audited financial statements. In the opinion of management, the financial
information included in this report contains all adjustments (all of which are
normal and recurring) necessary for a fair presentation of the results for the
interim periods. Nevertheless, the results shown for interim periods are not
necessarily indicative of results to be expected for the year.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS. For the three month and six month periods
ended July 3, 1994, the Company's net sales increased $31.6 million (21.1%) and
$58.7 million (20.7%), respectively, compared with the same periods in 1993.
The increase was primarily attributable to (i) sales generated by Bentley
Mills, Inc., which was acquired during June 1993, (ii) sales generated by
Prince Street Technologies, Ltd., which was acquired during March 1994, (iii)
increased sales volume in the Company's carpet operations in Europe and
Southeast Asia, and (iv) continued improvement in unit volume in the Company's
interior fabric and chemical operations. These increases were offset somewhat
by the strengthening of the U.S. Dollar, the Company's reporting currency,
against certain key European currencies (particularly the Dutch guilder), and a
decrease in sales volume in Japan, which continues to experience a recessionary
economic climate.
Cost of sales increased as a percentage of sales for the three and six
month periods ended July 3, 1994, compared with the same periods in 1993. The
increase was due primarily to (i) increased manufacturing costs in the
Company's interior fabrics division, and (ii) the acquisitions of Bentley Mills
and Prince Street Technologies, which, historically, had higher cost of sales
than the Company.
Selling, general and administrative expenses as a percentage of sales
decreased to 23.9% and 23.7%, respectively, for the three month and six month
periods ended July 3, 1994, compared to 24.5% and 23.7% for the same periods in
1993, primarily as a result of (i) the acquisition of Bentley, which had lower
selling, general and administrative costs than the Company, and (ii) the
continuation of cost controls measures initiated in prior years, which reduced
discretionary marketing cost and fixed overhead expenditures.
For the three month and six month periods ended July 3, 1994, the
Company's other expense decreased $.1 million and increased $.7 million,
respectively, compared to the same periods in 1993, primarily due to an
increase in bank debt coupled with the increase in U.S. interest rates.
Due, by and large, to the aforementioned factors, coupled with the
dividends paid on the Series A Preferred Shares, the Company's net income
increased 19.3% to $3.3 million and 14.1% to $5.6 million, respectively, for
the three months and six months ended July 3, 1994, compared to the same
periods in 1993.
LIQUIDITY AND CAPITAL RESOURCES. The primary uses of cash during the
period have been (i) $5.9 million for operations, (ii) $9.2 for additions to
property and equipment in the Company's manufacturing facilities, (iii) $.6
associated with the acquisition of Prince Street Technologies, Ltd., and (iv)
$3.0 million for dividends
8
<PAGE> 9
paid. These uses were funded, in part, by $12.7 million from long-term
financing and $1.3 million from a reduction in escrowed and restricted funds
requirements.
The Company, as of July 3, 1994, recognized a $12.2 million decrease
in foreign currency translation adjustment compared to that of January 2, 1994.
This improvement in translation adjustment was largely due to a significant
quarter end strengthening of the British pound sterling and the Dutch Guilder
compared to the U.S. dollar. The adjustment to shareholders' equity was
converted by the guidelines of the Financial Accounting Standards Board (FASB)
52.
In June 1994, the Company amended its existing revolving credit and
term loan facilities. The amendment increased the revolving credit facilities
by $20.0 million, reduced the interest calculation from LIBOR plus 1.5% to
LIBOR plus 1.0%, reduced the commitment fees payable by the Company, and
amended certain financial covenants.
Management believes that the cash provided by operations and available
under long-term loan commitments will provide adequate funds for current
commitments and other requirements in the foreseeable future.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not aware of any material pending legal proceedings
involving it or any of its property.
ITEM 2. CHANGES IN THE RIGHTS OF THE COMPANY'S SECURITY HOLDERS
None
ITEM 3. DEFAULTS BY THE COMPANY ON ITS SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Company held its annual meeting of shareholders on May 17,
1994.
(b) N/A
(c) The matters considered at the annual meeting, and the votes
cast for, against or withheld, as well as the number of
abstentions, relating to each matter, are as follows:
(i) Election of the following directors:
<TABLE>
<CAPTION>
CLASS A FOR WITHHELD
------- --- --------
<S> <C> <C>
Carl I. Gable 10,637,724 97,237
Arie Glimmerveen 10,628,624 106,337
J. Smith Lanier, II 10,629,326 105,635
Leonard G. Saulter 10,629,724 105,237
David G. Thomas 10,637,224 97,737
Clarinus C. Th. van Andel 10,638,124 96,837
</TABLE>
<TABLE>
<CAPTION>
CLASS B FOR WITHHELD
------- --- --------
<S> <C> <C>
Ray C. Anderson 2,753,996 0
Brian L. DeMoura 2,753,996 0
Charles R. Eitel 2,753,996 0
David Milton 2,753,996 0
Royce R. Renfroe 2,753,996 0
Don E. Russell 2,753,996 0
C. Edward Terry 2,753,996 0
</TABLE>
10
<PAGE> 11
(ii) Proposal to amend the Company's 1993 Key Employee
Stock Option Plan to increase the number of shares
authorized to be issued thereunder by 500,000 shares.
<TABLE>
<S> <C>
For 12,855,827
Against 593,066
Abstain 379,483
</TABLE>
(iii) Proposal submitted by a shareholder requesting
implementation of the MacBride Principles concerning
employment practices of the Company's subsidiary that
has a facility in Northern Ireland.
<TABLE>
<S> <C>
For 1,212,371
Against 10,637,146
Abstain 712,505
</TABLE>
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are filed with this report:
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
------ ----------------------
<S> <C>
10.1 Second Amendment to Second Amended and Restated Credit Agreement, dated June 13, 1994, among the Company
(and certain of its direct and indirect subsidiaries), Trust Company Bank and The First National Bank of
Chicago.
10.2 Third Amendment to Revolving Credit Loan Agreement, dated as of June 15, 1994, between Interface Flooring
Systems, Inc. and Trust Company Bank.
10.3 Employment Agreement of David Milton.
10.4 Employment Agreement of Brian L. DeMoura.
</TABLE>
(b) No reports on Form 8-K were filed during the quarter ended
July 3, 1994.
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERFACE, INC.
Date: August 12, 1994 By:/s/Daniel T. Hendrix
-----------------------------
Daniel T. Hendrix
Vice President
(Principal Financial Officer)
12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Exhibit Page No.
<S> <C>
10.1 Second Amendment to Second Amended and Restated Credit Agreement, dated June 13,
1994, among the Company (and certain of its direct and indirect subsidiaries),
Trust Company Bank and The First National Bank of Chicago.
10.2 Third Amendment to Revolving Credit Loan Agreement, dated as of June 15, 1994,
between Interface Flooring Systems, Inc. and Trust Company Bank.
10.3 Employment Agreement of David Milton.
10.4 Employment Agreement of Brian L. DeMoura.
</TABLE>
13
<PAGE> 1
EXHIBIT 10.1
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT made and entered into as of June 13, 1994, by and among INTERFACE,
INC., a Georgia corporation ("Interface"), INTERFACE SCHERPENZEEL B.V.
(formerly Heuga Nederland B.V.), a "besloten vennootschap met beperkte
aansprakelijkheid" (private company with limited liability) incorporated and
existing under the laws of The Netherlands with its registered seat in
Scherpenzeel, Gld., The Netherlands ("Heuga Nederland"), AYLESBURY RESIDUAL
LIMITED (formerly Heuga UK Limited), a private company limited by shares
organized and existing under the laws of England and Wales ("Heuga UK"),
INTERFACE EUROPE LTD. (formerly Interface Flooring Systems Limited), a private
company limited by shares organized and existing under the laws of England and
Wales ("IFSL"; Interface, Heuga Nederland, Heuga UK, and IFSL referred to
collectively herein as the "Borrowers"), TRUST COMPANY BANK, a banking
corporation organized under the laws of the State of Georgia ("TCB"), THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association ("FNBC"), the other
banks and lending institutions listed on the signature pages hereof, and any
assignees of TCB, FNBC, or such other banks and lending institutions which
become "Lenders" as provided herein (TCB, FNBC, and such other banks, lending
institutions, and assignees referred to collectively herein as the "Lenders"),
TRUST COMPANY BANK, in its capacity as agent for those Lenders having Revolving
Loan Commitments or Term Loan Commitments, or both, or having outstanding
Revolving Loans or Term Loans, or both, as provided herein, and each successor
agent for such Lenders as may be appointed from time to time pursuant to
Article XI hereof (the "Domestic Agent"), THE FIRST NATIONAL BANK OF CHICAGO,
in its capacity as agent for those Lenders having outstanding Multicurrency
Loan Commitments or having outstanding Multicurrency Loans as provided herein,
and each successor agent for such Lenders as may be appointed from time to time
pursuant to Article XI hereof (the "Multicurrency Agent"; the Domestic Agent
and the Multicurrency Agent referred to collectively herein as the
"Co-Agents"), and TRUST COMPANY BANK, in its capacity as collateral agent for
the Co-Agents and Lenders and each successor collateral agent as may be
appointed from time to time pursuant to Article XI hereof (the "Collateral
Agent");
W I T N E S S E T H:
WHEREAS, Interface, Heuga Nederland, Heuga UK, IFSL, the
Co-Agents, the Collateral Agent, and the Lenders are parties to a certain
Second Amended and Restated Credit Agreement dated as of June 11, 1993, as
amended by that certain First Amendment to Second Amended and Restated Credit
Agreement dated as of December 1, 1993 (as so amended, the "Credit Agreement");
<PAGE> 2
WHEREAS, Interface has requested that certain of the Lenders
increase their respective Revolving Loan Commitments and Multicurrency Loan
Commitment, and that the Lenders agree to amend certain other provisions of the
Credit Agreement;
WHEREAS, the Co-Agents, the Collateral Agent, and the Lenders
have agreed to such increases in the Revolving Loan Commitments and
Multicurrency Loan Commitment and the other amendments to the Credit Agreement,
as more particularly set forth in this Second Amendment, on the terms and
subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, Interface, Heuga Nederland, Heuga UK, IFSL,
the Lenders, the Co-Agents and the Collateral Agent agree as follows:
1. DEFINED TERMS. Except as otherwise expressly defined herein, each
capitalized term used in this Second Amendment that is defined in the Credit
Agreement shall be used herein with the meaning assigned to such capitalized
term in the Credit Agreement.
2. AMENDMENTS TO SECTION 1.01 ("DEFINITIONS").
(a) Section 1.01 of the Credit Agreement is hereby amended by
adding the following defined terms in proper alphabetical order:
"FNBC Replacement Multicurrency Note" shall mean the
promissory note evidencing all Multicurrency Loans previously made by
FNBC and outstanding on the Second Amendment Effective Date, and all
Multicurrency Loans to be made by FNBC pursuant to its increased
Multicurrency Loan Commitment as provided in Paragraph 4 of the Second
Amendment to Credit Agreement, substantially in the form attached to
the Second Amendment to Credit Agreement as Exhibit C-2.
"FNBC Supplemental Revolving Credit Note" shall mean,
collectively, the promissory notes evidencing the Revolving Loans to
be made by FNBC pursuant to the increase in its Revolving Loan
Commitment as provided in Paragraph 3 of the Second Amendment to
Credit Agreement, substantially in the form attached to the Second
Amendment to Credit Agreement as Exhibit B-2.
"FUNBG Replacement Revolving Credit Note" shall mean the
promissory note evidencing all Revolving Loans previously made by
First Union National Bank of Georgia
2
<PAGE> 3
("FUNBG") and outstanding on the Second Amendment Effective Date, and
all Revolving Loans to be made by FUNBG pursuant to its increased
Revolving Loan Commitment as provided in Paragraph 3 of the Second
Amendment to Credit Agreement, substantially in the form attached to
the Second Amendment to Credit Agreement as Exhibit B-3.
"Second Amendment Effective Date" shall mean the date on which
all conditions and requirements for the effectiveness of the Second
Amendment to Credit Agreement have been satisfied as provided in
Paragraph 13 of the Second Amendment to Credit Agreement.
"Second Amendment to Credit Agreement" shall mean that certain
Second Amendment to Second Amended and Restated Credit Agreement dated
as of June __, 1994, among the Borrowers, the Lenders listed therein,
the Co-Agents, and the Collateral Agent.
(b) The definitions of the terms "Applicable Margin", "Borrowers",
"Fixed Charge Coverage Ratio", "Funded Debt", "Guarantors", "Multicurrency
Notes", "Pledged Stock", and "Revolving Credit Notes" in Section 1.01 of the
Credit Agreement are hereby amended by deleting such definitions in their
entirety and substituting in lieu thereof the following definitions for such
terms:
"Applicable Margin" shall mean, with respect to all
outstanding Borrowings through the Second Amendment Effective Date,
the applicable percentage determined as set forth in this Agreement
prior to giving effect to the Second Amendment to Credit Agreement
and, with respect to all outstanding Borrowings during any of
Interface's fiscal quarters from and after the Second Amendment
Effective Date, the percentage determined for such fiscal quarter from
the chart set forth below based on Interface's Interest Coverage Ratio
and Leverage Ratio determined as of the last day of the second fiscal
quarter immediately preceding the then current fiscal quarter:
3
<PAGE> 4
INTEREST COVERAGE RATIO
<TABLE>
<CAPTION>
LESS THAN GREATER THAN GREATER THAN
OR EQUAL 3.0:1.00 AND LESS OR EQUAL
LEVERAGE RATIO TO 3.0:1.0 THAN 5.0:1.0 TO 5.0:1.0
- - -------------- ---------- ----------------- ------------
<S> <C> <C> <C>
Greater than or
equal to 50% 1.000% 0.875% 0.750%
Greater than 35%
and less than
50% 0.875% 0.750% 0.500%
Less than or
equal to 35% 0.750% 0.500% 0.375%
</TABLE>
provided, however, if Interface fails to deliver its financial statements for
such second preceding fiscal quarter pursuant to Section 8.07 prior to the
first day of the then-current fiscal quarter, the Applicable Margin with
respect to Borrowings during such current fiscal quarter shall be 1.000%.
"Borrowers" shall mean, (i) with respect to the Term Loans and
Revolving Loans, Interface, and (ii) collectively, with respect to the
Multicurrency Loans, Heuga Nederland and IFSL, and their respective
successors and permitted assigns.
"Fixed Charge Coverage Ratio" shall mean, as of the last day
of any fiscal quarter of Interface, the ratio of (A) the sum, for the
immediately preceding four fiscal quarters, of the amounts of (i)
Consolidated EBITA, (ii) aggregate depreciation expense, and (iii)
aggregate rent expense, to (B) the sum of the amounts of (i) the
aggregate Consolidated Interest Expense for the immediately preceding
four fiscal quarters, (ii) the aggregate rent expense for the
immediately preceding four fiscal quarters, (iii) the next four
succeeding required principal payments on the Term Loans pursuant to
Section 2.02(b), and (iv) all regularly scheduled principal payments
on other Indebtedness (including, without limitation, those portions
of payments with respect to capital leases in the nature of principal
payments) of the Consolidated Companies as permitted under Section
9.01 for the next four succeeding fiscal quarters.
"Funded Debt" shall mean all Indebtedness for money borrowed,
Indebtedness evidenced or secured by purchase money Liens, capitalized
leases, conditional sales contracts and similar title retention debt
instruments, and Indebtedness evidenced by bonds, debentures, notes or
other similar instruments, including all current maturities of
4
<PAGE> 5
such Indebtedness. The calculation of Funded Debt shall include all
Funded Debt of the Consolidated Companies, plus all Funded Debt of
other Persons to the extent guaranteed by a Consolidated Company, to
the extent supported by a letter of credit issued for the account of a
Consolidated Company, or as to which and to the extent which a
Consolidated Company or its assets otherwise have become liable for
payment thereof.
"Guarantors" shall mean, collectively, Interface, Guilford of
Maine, Inc., Guilford (Delaware) Inc., Interface Flooring Systems,
Inc., Rockland React-Rite Inc., Interface Research Corporation,
Interface Europe, Inc., Pandel, Inc., Interface Asia-Pacific, Inc.,
Bentley, Prince Street, and all other Material Subsidiaries that are
not Foreign Subsidiaries, and their respective successors and
permitted assigns.
"Multicurrency Notes" shall mean, collectively, the promissory
notes evidencing the Multicurrency Loans in the form attached hereto
as Exhibit C, together with the FNBC Replacement Multicurrency Note.
"Pledged Stock" shall mean, collectively, (i) all issued and
outstanding capital stock, together with all warrants, stock options,
and other purchase and conversion rights with respect to such capital
stock, of each of Guilford of Maine, Inc., Guilford (Delaware) Inc.,
Interface Flooring Systems, Inc., Interface Research Corporation,
Rockland React-Rite, Inc., Pandel, Inc., Interface Europe, Inc.,
Interface Asia-Pacific, Inc., Bentley, Prince Street, and all other
Material Subsidiaries of Interface organized in the United States, and
(ii) 66% of all issued and outstanding capital stock, together with
66% of all warrants, stock options, and other purchase and conversion
rights with respect to such capital stock, of IFSL, Interface Europe
B.V., Interface Heuga Singapore Pte Ltd., Guilford of Maine (Canada),
Inc., Interface Flooring Systems (Canada), Inc., Interface Heuga Japan
Ltd., Interface Heuga Hong Kong Ltd., Interface Heuga Australia Pty
Limited, and all other Material Subsidiaries that are Foreign
Subsidiaries directly owned by Interface and/or one or more other
Subsidiaries organized in the United States.
"Revolving Credit Notes" shall mean, collectively, the
promissory notes evidencing the Revolving Loans in the form attached
hereto as Exhibit B, together with the FUNBG Replacement Revolving
Credit Note and the FNBC Supplemental Revolving Credit Note.
5
<PAGE> 6
3. AMENDMENT TO ARTICLE III ("REVOLVING LOANS"). Article III of the
Credit Agreement is hereby amended by adding to said Article III an additional
Section 3.05, as follows:
SECTION 3.05. INCREASE IN REVOLVING LOAN COMMITMENTS.
(a) On the Second Amendment Effective Date, the aggregate
Revolving Loan Commitments of the Lenders shall be increased from
$80,000,000 in aggregate principal amount to $95,000,000 in aggregate
principal amount, with such increase resulting from the following
actions: (1) the issuance by FNBC of a new Revolving Loan Commitment
in the principal amount of $11,000,000, and (2) the increase by FUNBG
of its Revolving Loan Commitment from $8,683,041 to $12,683,041.
After giving effect to the foregoing actions, the Revolving Loan
Commitments for the Lenders shall be as set forth on the signature
pages to the Second Amendment to Credit Agreement, and all Borrowings
of Revolving Loans pursuant to Section 5.01(a), and all continuations
and conversions of outstanding Revolving Loans pursuant to Section
5.01(b), occurring on and after the Second Amendment Effective Date
shall be made on the basis of such revised Commitments. At the time
of the first such continuation or conversion, occurring on or after
the Second Amendment Effective Date, of each outstanding Revolving
Loan that had been borrowed or previously continued or converted prior
to the Second Amendment Effective Date (i) there shall be paid to the
Domestic Agent, by each Lender whose Pro Rata Share of the Revolving
Loan Commitments has increased on the Second Amendment Effective Date,
a principal amount sufficient to cause such Lender's Pro Rata Share of
such outstanding Revolving Loans being so continued or converted to be
increased to a percentage equal to such Lender's Pro Rata Share of the
Revolving Loan Commitments as in effect on and after the Second
Amendment Effective Date, and for all purposes of this Agreement from
and after the date of such payment, such additional principal amount
shall be deemed to have been borrowed by Interface from such Lender,
and (ii) there shall be repaid to each Lender whose Pro Rata Share of
the Revolving Loan Commitments has decreased on the Second Amendment
Effective Date, from the principal amounts paid to the Domestic Agent
pursuant to the preceding clause (i), a principal amount sufficient to
cause such Lender's Pro Rata Share of such outstanding Revolving Loans
being so continued or converted to be reduced to a percentage equal to
such Lender's Pro Rata Share of the Revolving Loan Commitments as in
effect on and after the Second Amendment Effective Date, and such
amount shall thereupon be deemed to have been repaid by Interface to
such Lender (without penalty or
6
<PAGE> 7
premium). Similar payments with respect to all Revolving Loans
outstanding on the Second Amendment Effective Date as Base Rate Loans
shall be made on the Second Amendment Effective Date. Each repayment
by Interface, occurring on or after the Second Amendment Effective
Date, of outstanding Revolving Loans that had been borrowed prior to
the Second Amendment Effective Date, and have not previously been so
continued or converted on or after the Second Amendment Effective
Date, shall be paid to the Lenders in accordance with their respective
Pro Rata Shares of the Revolving Loan Commitments as in effect prior
to the Second Amendment Effective Date.
(b) Interface's obligations to pay the principal of, and
interest on, all Revolving Loans under the FUNBG Replacement Revolving
Credit Note and the FNBC Supplemental Revolving Credit Note shall be
evidenced by the records of the Domestic Agent and such Lender and by
the FUNBG Replacement Revolving Credit Note or FNBC Supplemental
Revolving Credit Note, as the case may be, payable to such Lender
completed in conformity with this Agreement.
(c) From and after the Second Amendment Effective Date,
all references in this Agreement to the Revolving Loan Commitments
shall be deemed to include the Revolving Loan Commitments as increased
by this Section 3.05 (subject, however, to subsequent increases or
decreases from time to time as a result of any reduction thereof
pursuant to Section 3.03 or 3.04, any assignment thereof pursuant to
Section 12.06, or any amendment thereof pursuant to Section 12.02).
4. AMENDMENT TO ARTICLE IV ("MULTICURRENCY LOANS"). Article IV of the
Credit Agreement is hereby amended by adding to said Article IV a new Section
4.05, as follows:
SECTION 4.05. INCREASE IN MULTICURRENCY LOAN COMMITMENTS.
(a) On the Second Amendment Effective Date, the aggregate
Multicurrency Loan Commitments of the Lenders shall be increased from
$45,000,000 in aggregate principal amount to $50,000,000 in aggregate
principal amount, with such increase resulting from the increase by
FNBC of its Multicurrency Loan Commitment from $5,800,000 to
$10,800,000. After giving effect to the foregoing increase, the
Multicurrency Loan Commitments for the Lenders shall be as set forth
on the signature pages to the Second Amendment to Credit Agreement,
and all Borrowings of Multicurrency Loans pursuant to Section 5.01(a),
and all continuations and
7
<PAGE> 8
conversions of outstanding Multicurrency Loans pursuant to Section
5.01(b), occurring on and after the Second Amendment Effective Date
shall be made on the basis of such revised Commitments. At the time
of the first such continuation or conversion, occurring on or after
the Second Amendment Effective Date, of each outstanding Multicurrency
Loan that had been borrowed or previously continued or converted prior
to the Second Amendment Effective Date (i) there shall be paid to the
Multicurrency Agent, by each Lender whose Pro Rata Share of the
Multicurrency Loan Commitments has increased on the Second Amendment
Effective Date, a principal amount sufficient to cause such Lender's
Pro Rata Share of such outstanding Multicurrency Loans being so
continued or converted to be increased to a percentage equal to such
Lender's Pro Rata Share of the Multicurrency Loan Commitments as in
effect on and after the Second Amendment Effective Date, and for all
purposes of this Agreement from and after the date of such payment,
such additional principal amount shall be deemed to have been borrowed
by Interface from such Lender, and (ii) there shall be repaid to each
Lender whose Pro Rata Share of the Multicurrency Loan Commitments has
decreased on the Second Amendment Effective Date, from the principal
amounts paid to the Multicurrency Agent pursuant to the preceding
clause (i), a principal amount sufficient to cause such Lender's Pro
Rata Share of such outstanding Multicurrency Loans being so continued
or converted to be reduced to a percentage equal to such Lender's Pro
Rata Share of the Multicurrency Loan Commitments as in effect on and
after the Second Amendment Effective Date, and such amount shall
thereupon be deemed to have been repaid by Interface to such Lender
(without penalty or premium). Similar payments with respect to all
Multicurrency Loans outstanding on the Second Amendment Effective Date
as Base Rate Loans shall be made on the Second Amendment Effective
Date. Each repayment by Interface, occurring on or after the Second
Amendment Effective Date, of outstanding Multicurrency Loans that had
been borrowed prior to the Second Amendment Effective Date, and have
not previously been so continued or converted on or after the Second
Amendment Effective Date, shall be paid to the Lenders in accordance
with their respective Pro Rata Shares of the Multicurrency Loan
Commitments as in effect prior to the Second Amendment Effective Date.
(b) The Borrowers' obligations to pay the principal of,
and interest on, all Multicurrency Loans to FNBC pursuant to its
increased Multicurrency Loan Commitment shall be evidenced by the
records of the Multicurrency Agent
8
<PAGE> 9
and such Lender and by the FNBC Replacement Multicurrency Note payable
to such Lender completed in conformity with this Agreement.
(c) From and after the Second Amendment Effective Date,
all references in this Agreement to the Multicurrency Loan Commitments
shall be deemed to include the Multicurrency Loan Commitments as
increased by this Section 4.05 (subject, however, to subsequent
increases or decreases from time to time as a result of any reduction
thereof pursuant to Section 4.03 or 4.04, any assignment thereof
pursuant to Section 12.06, or any amendment thereof pursuant to
Section 12.02).
5. AMENDMENT TO SECTION 5.05 ("FEES"). Subsections (c), (d), and (e) of
Section 5.05 of the Credit Agreement are hereby amended by deleting said
subsections in their entirety, and substituting the following subsections (c),
(d), and (e) in lieu thereof:
(c) Interface shall pay to the Domestic Agent, for the
account of and distribution of the respective Pro Rata Share to each
Revolving Lender, a commitment fee (i) for the period commencing on
the Closing Date to but excluding the Second Amendment Effective Date
computed at a rate equal to one-half of one percent (0.500%) per
annum, and (ii) for the period commencing on the Second Amendment
Effective Date to and including the Final Maturity Date computed at a
rate equal to three-eighths of one percent (0.375%) per annum, in each
case calculated on the average daily unused portion of the Revolving
Loan Commitments of such Lenders, such fee being payable quarterly in
arrears on the last calendar day of each fiscal quarter of Interface,
and on the Final Maturity Date.
(d) The Borrowers shall pay to the Multicurrency Agent,
for the account of and distribution of the respective Pro Rata Share
to the Multicurrency Lenders, a commitment fee (i) for the period
commencing on the Closing Date to but excluding the Second Amendment
Effective Date computed at a rate equal to one-half of one percent
(0.500%) per annum, and (ii) for the period commencing on the Second
Amendment Effective Date to and including the Final Maturity Date
computed at a rate equal to three-eighths of one percent (0.375%) per
annum, in each case calculated on the average daily unused portion of
the Multicurrency Loan Commitments of such Multicurrency Lenders
(based on the Dollar Equivalent of such unused portion and calculated
in the manner set forth in the second sentence of Section 4.01(a)),
such fee being payable quarterly in arrears on the last
9
<PAGE> 10
calendar day of each fiscal quarter of Interface, and on the Final
Maturity Date.
(e) On the Second Amendment Effective Date, Interface and
the other Borrowers shall pay to (i) FNBC a fee in the amount of
$20,000 for the issuance by such Lender of its Revolving Loan
Commitment and the increase in its Multicurrency Loan Commitment
pursuant to Sections 3.05 and 4.05, and (ii) FUNBG a fee in the
amount of $5,000 for the issuance by such Lender of the increase in
its Revolving Loan Commitment pursuant to Section 3.05.
6. AMENDMENTS TO SECTION 8.07 ("REPORTING COVENANTS").
(a) Subsection (a) of Section 8.07 of the Credit Agreement is
hereby amended by deleting the words "90 days" from the first sentence of said
subsection (a) and substituting in lieu thereof the words "120 days."
(b) Subsection (b) of Section 8.07 of the Credit Agreement is
hereby amended by deleting the words "45 days" from the first sentence of said
subsection (b) and substituting in lieu thereof the words "60 days."
Except as expressly amended hereby, subsections (a) and (b) of Section 8.07
shall continue in effect in accordance with the terms thereof.
7. AMENDMENT TO SECTION 8.09 ("FINANCIAL COVENANTS"). Subsection (c) of
Section 8.09 of the Credit Agreement is hereby amended by deleting from said
subsection (c) the designated periods and applicable minimum Fixed Charge
Coverage Ratios and substituting in lieu thereof the following designated
periods and minimum Fixed Charge Coverage Ratios:
<TABLE>
<CAPTION>
Minimum Fixed
Charge Coverage
Period Ratio
------ --------------
<S> <C>
January 3, 1994 through
December 31, 1995 1.25:1.00
January 1, 1996 and
thereafter 1.50:1.00
</TABLE>
Except as expressly amended hereby, subsection (c) of Section 8.09 shall
continue in effect in accordance with the terms thereof.
10
<PAGE> 11
8. AMENDMENT TO SECTION 9.01 ("INDEBTEDNESS"). Section 9.01 of the
Credit Agreement is hereby amended by deleting subsection (k) of said Section
9.01 and substituting in lieu thereof the following subsections (k) and (l):
(k) Indebtedness of Prince Street arising from the
factoring arrangement more particularly described on Schedule 9.03
attached to the Second Amendment to Credit Agreement, as such
Indebtedness may be outstanding prior to May 1, 1995; and
(l) Other Indebtedness not to exceed $3,000,000 at any
one time outstanding.
Except as expressly amended hereby, said Section 9.01 shall continue in effect
in accordance with its terms.
9. AMENDMENT TO SCHEDULE 9.02 ("EXISTING LIENS"). Schedule 9.02 to the
Credit Agreement is hereby amended by adding to said Schedule 9.02 the
information set forth on the Supplement to Schedule 9.02 attached to this
Second Amendment, but such Supplement shall only be effective through April 30,
1995, at which time the Liens described in such Supplement shall no longer be
permitted pursuant to the terms of Section 9.02(a) of the Credit Agreement.
10. AMENDMENT TO SECTION 9.03 ("MERGERS, ACQUISITIONS, SALES, ETC.").
Clause (iv) of Section 9.03 of the Credit Agreement is hereby amended by
deleting said clause (iv) in its entirety and substituting the following in
lieu thereof:
(iv) sales of accounts receivable (x) by Interface
Flooring Systems, Inc. pursuant to the Factoring Agreement with
BancBoston Financial Company identified on Schedule 9.02 or pursuant to
a replacement factoring arrangement on terms consistent with such
Factoring Agreement as in effect on June 22, 1993, (y) by Foreign
Subsidiaries pursuant to similar factoring arrangements in each case
providing for sales of accounts on terms substantially consistent with
the Factoring Agreement described in the preceding clause (x), and (z)
by Prince Street pursuant to the factoring arrangement more
particularly described on the Supplement to Schedule 9.02 attached to
the Second Amendment to Credit Agreement, but only through April 30,
1995, or
Except as expressly amended hereby, said Section 9.03 shall continue in effect
in accordance with its terms.
11. WAIVER OF EVENT OF DEFAULT. Upon the execution and delivery of this
Second Amendment by those Lenders constituting the
11
<PAGE> 12
Required Lenders under the terms of the Credit Agreement, whether or not the
Second Amendment Effective Date shall then have occurred or shall thereafter
occur, any Default or Event of Default that may have occurred or existed as of
April 3, 1994, as a result of Interface's failure to maintain as of such date
the minimum Fixed Charge Coverage Ratio required to be maintained pursuant to
Section 8.09(c) of the Credit Agreement, shall be waived without further action
on the part of the Lenders.
12. AMENDMENT FEE. Interface agrees to pay to the Domestic Agent, for the
benefit of each Lender, on the Second Amendment Effective Date, an amendment
fee equal to $5,000 for each such Lender.
13. CONDITIONS PRECEDENT TO EFFECTIVENESS OF SECOND AMENDMENT. Except as
otherwise provided in Paragraph 11 above, this Second Amendment shall not
become effective or have any force or effect until such time as the Co-Agents
shall have received the following documents in form and substance satisfactory
in all respects to the Co-Agents:
(a) The counterparts of this Second Amendment as executed
and delivered by each of the Borrowers, the Lenders, the Co- Agents,
and the Collateral Agent, and as acknowledged by each of the
Guarantors;
(b) The duly completed and executed FNBC Replacement
Multicurrency Note and FNBC Supplemental Revolving Credit Note;
(c) The duly completed and executed FUNBG Replacement
Revolving Credit Note;
(d) The certificate of the Secretary or an Assistant
Secretary of each of the Borrowers (or, in the case of any Foreign
Subsidiary, a comparable company officer) attaching and certifying
copies of the resolutions of the boards of directors (or, in the case
of any Foreign Subsidiary, the comparable governing body of such
entity) of the Borrowers, authorizing the execution, delivery and
performance of this Second Amendment, including, without limitation,
the increases in the Revolving Loan Commitments and Multicurrency Loan
Commitments;
(e) The certificate of the Secretary or an Assistant
Secretary of each of the Borrowers (or, in the case of any Foreign
Subsidiary, a comparable company officer) certifying (i) the name,
title and true signature of each officer of such entities executing
this Second Amendment and all other documents being executed and
delivered in connection
12
<PAGE> 13
herewith, and (ii) whether there have been any amendments in the
certificates or articles of incorporation or bylaws (or comparable
organizational documents of Foreign Subsidiaries) since June 22, 1993
and, if so, attaching copies of all such amendments;
(f) The favorable opinions of (i) Kilpatrick & Cody,
United States counsel to the Borrowers, (ii) Paisner & Co., United
Kingdom counsel to Heuga UK and IFSL, and (iii) Loeff Clays & Verbeke,
Netherlands counsel to Heuga Nederland, in each case addressed to the
Co-Agents and each of the Lenders, and covering such matters with
respect to the Borrowers and this Second Amendment as either Co-Agent
or any Lender may reasonably request; and
(g) Such other documents with respect to the Borrowers,
this Second Amendment, and all corporate proceedings and other legal
matters in connection with the authorization, legality, validity, and
enforceability hereof as either Co-Agent shall reasonably request.
In addition to the foregoing, the following conditions shall have been
satisfied or shall exist to the satisfaction of the Co-Agents:
(h) The fees required to be paid pursuant to Section
5.05(e) of the Credit Agreement, as amended hereby, and by Paragraph
12 of this Second Amendment, shall have been paid in full;
(i) All reasonable out-of-pocket costs and expenses of
the Co-Agents (including, without limitation, the reasonable fees and
disbursements of counsel) incurred in connection with this Second
Amendment and the transactions contemplated hereby shall have been
paid in full;
(j) The representations and warranties of the Borrowers
as set forth in Paragraph 14 of this Second Amendment shall be true
and correct; and
(k) All outstanding Multicurrency Loans and other
obligations owed by Heuga UK as a Borrower under the Credit Agreement
shall have been paid in full.
14. REPRESENTATIONS AND WARRANTIES. Each of Interface (as to itself and
all other Consolidated Companies, whether or not Interface is a Borrower
hereunder) and each of the other Borrowers (as to itself and all of its
Subsidiaries) represents and warrants (after giving effect to the waiver set
forth in Paragraph 11 of this Second Amendment) to the Lenders as follows:
13
<PAGE> 14
(a) All representations and warranties set forth in the Credit
Agreement are true and correct in all material respects with the same effect as
though such representations and warranties have been made on and as of the date
hereof (except that the representation and warranty set forth in Section 7.19
of the Credit Agreement shall not be deemed to relate to any time subsequent
to the date of the initial Loans under the Credit Agreement);
(b) No Default or Event of Default has occurred and is continuing
on the date hereof; and
(c) Since the date of the most recent financial statements of the
Consolidated Companies submitted to the Lenders pursuant to Section 8.07(b),
there has been no change which has had or could reasonably be expected to have
a Materially Adverse Effect (whether or not any notice with respect to such
change has otherwise been furnished to the Lenders pursuant to Section 8.07).
15. REFERENCES TO CREDIT AGREEMENT. On and after the Second Amendment
Effective Date, each and every reference in the Credit Documents to the Credit
Agreement shall be deemed to refer to and mean the Credit Agreement as amended
by this Second Amendment. The Borrowers further confirm and agree that (i)
except as expressly amended herein, the Credit Agreement remains in full force
and effect in accordance with its terms, and (ii) all other Credit Documents
remain in full force and effect in accordance with their respective terms.
16. COUNTERPARTS. This Second Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
17. MISCELLANEOUS. This Second Amendment and the rights and obligations
of the parties hereunder shall be construed in accordance with and be governed
by the law (without giving effect to the conflict of law principles thereof) of
the State of Georgia. This Second Amendment shall be binding on and shall
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be duly executed and delivered in Atlanta, Georgia, by their duly
authorized officers as of the day and year first above written.
INTERFACE, INC.
By:
---------------------------
Daniel T. Hendrix
Vice President
INTERFACE SCHERPENZEEL B.V.
(FORMERLY HEUGA NEDERLAND B.V.)
By:
---------------------------
Daniel T. Hendrix
Attorney-in-Fact
AYLESBURY RESIDUAL LIMITED
(FORMERLY HEUGA UK LIMITED)
By:
---------------------------
Daniel T. Hendrix
Attorney-in-Fact
INTERFACE EUROPE LTD.
(FORMERLY INTERFACE FLOORING
SYSTEMS LIMITED)
By:
---------------------------
Daniel T. Hendrix
Attorney-in-Fact
15
<PAGE> 16
TRUST COMPANY BANK,
AS DOMESTIC AGENT AND
COLLATERAL AGENT
By:
--------------------------
Name:
-------------------
Title:
-------------------
By:
--------------------------
Name:
-------------------
Title:
-------------------
THE FIRST NATIONAL BANK
OF CHICAGO, AS
MULTICURRENCY AGENT
By:
--------------------------
Name:
-------------------
Title:
-------------------
16
<PAGE> 17
TRUST COMPANY BANK
By:
--------------------------
Name:
-------------------
Title:
-------------------
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 8,888,889 11.111111%
REVOLVING LOAN COMMITMENT: $ 12,056,054 12.690583%
MULTICURRENCY LOAN COMMITMENT: $ 4,055,057 8.110114%
TOTAL COMMITMENT: $ 25,000,000 11.11%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 8,166,667 11.111111%
SERIES B TERM LOAN COMMITMENT: $ 5,500,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 10,152,466 12.690583%
MULTICURRENCY LOAN COMMITMENT: $ 3,649,551 8.110114%
TOTAL COMMITMENT: $ 27,468,684 10.838462%
</TABLE>
17
<PAGE> 18
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 7,054,850 11.110000%
SERIES B TERM LOAN COMMITMENT: $ 4,950,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 10,152,467 10.686807%
MULTICURRENCY LOAN COMMITMENT: $ 3,649,551 7.299102%
TOTAL COMMITMENT: $ 25,806,868 10.002662%
</TABLE>
18
<PAGE> 19
THE FIRST NATIONAL BANK
OF CHICAGO
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 3,555,556 4.444445%
REVOLVING LOAN COMMITMENT: $ 0 0.000000%
MULTICURRENCY LOAN COMMITMENT: $ 6,444,444 12.888888%
TOTAL COMMITMENT: $ 10,000,000 4.44%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 3,266,667 4.444445%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 0 0.000000%
MULTICURRENCY LOAN COMMITMENT: $ 5,800,000 12.888888%
TOTAL COMMITMENT: $ 9,066,667 3.585069%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 2,819,400 4.440000%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 11,000,000 11.578947%
MULTICURRENCY LOAN COMMITMENT: $ 10,800,000 21.600000%
TOTAL COMMITMENT: $ 24,619,400 9.542403%
</TABLE>
19
<PAGE> 20
ABN AMRO BANK N.V.
By:
--------------------------
Name:
-------------------
Title:
-------------------
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 8,000,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 0 0.000000%
MULTICURRENCY LOAN COMMITMENT: $ 14,500,000 29.000000%
TOTAL COMMITMENT: $ 22,500,000 10.00%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 7,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 0 0.000000%
MULTICURRENCY LOAN COMMITMENT: $ 13,050,000 29.000000%
TOTAL COMMITMENT: $ 20,400,000 8.066406%
</TABLE>
20
<PAGE> 21
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 6,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 0 0.000000%
MULTICURRENCY LOAN COMMITMENT: $ 13,050,000 26.100000%
TOTAL COMMITMENT: $ 19,400,000 7.519380%
</TABLE>
21
<PAGE> 22
THE FIRST NATIONAL BANK OF
BOSTON
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 6,755,555 8.444444%
REVOLVING LOAN COMMITMENT: $ 4,822,422 5.076234%
MULTICURRENCY LOAN COMMITMENT: $ 7,422,023 14.844046%
TOTAL COMMITMENT: $ 19,000,000 8.44%
</TABLE>
22
<PAGE> 23
THE FIRST NATIONAL BANK OF
BOSTON - (CONTINUED)
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 6,206,666 8.444444%
SERIES B TERM LOAN COMMITMENT $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 4,060,987 5.076234%
MULTICURRENCY LOAN COMMITMENT: $ 6,679,821 14.844046%
TOTAL COMMITMENT: $ 21,347,474 8.421094%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 5,359,400 8.440000%
SERIES B TERM LOAN COMMITMENT $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 4,060,987 4.274723%
MULTICURRENCY LOAN COMMITMENT: $ 6,679,821 13.359642%
TOTAL COMMITMENT: $ 20,060,208 7.775274%
</TABLE>
23
<PAGE> 24
BANK SOUTH, N.A.
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 4,266,667 5.333334%
REVOLVING LOAN COMMITMENT: $ 7,733,333 8.140351%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 12,000,000 5.33%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 3,920,000 5.333334%
SERIES B TERM LOAN COMMITMENT: $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 6,512,280 8.140351%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 14,832,280 5.845943%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 3,384,550 5.330000%
SERIES B TERM LOAN COMMITMENT: $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 6,512,280 6.855032%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 13,856,830 5.370864%
</TABLE>
24
<PAGE> 25
THE BANK OF TOKYO LTD.,
ATLANTA AGENCY
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 2,844,444 3.555555%
REVOLVING LOAN COMMITMENT: $ 5,155,556 5.426901%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 8,000,000 3.56%
</TABLE>
25
<PAGE> 26
THE BANK OF TOKYO LTD.,
ATLANTA AGENCY (CONTINUED)
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 2,613,333 3.555555%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 4,341,521 5.426901%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 6,954,854 2.743532%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 2,260,600 3.560000%
SERIES B TERM LOAN COMMITMENT: $ 0 0.000000%
REVOLVING LOAN COMMITMENT: $ 4,341,521 4.570022%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 6,602,121 2.558962%
</TABLE>
26
<PAGE> 27
CIBC, INC.
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 5,688,889 7.111111%
REVOLVING LOAN COMMITMENT: $ 10,311,111 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 16,000,000 7.11%
</TABLE>
27
<PAGE> 28
CIBC, INC. (CONTINUED)
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 5,226,667 7.111111%
SERIES B TERM LOAN COMMITMENT: $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 8,683,041 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 18,309,708 7.222764%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 4,514,850 7.110000%
SERIES B TERM LOAN COMMITMENT: $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 8,683,041 9.140043%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 17,157,891 6.650345%
</TABLE>
28
<PAGE> 29
CONTINENTAL BANK N.A.
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 5,688,889 7.111111%
REVOLVING LOAN COMMITMENT: $ 10,311,111 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 16,000,000 7.11%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 5,226,667 7.111111%
SERIES B TERM LOAN COMMITMENT: $ 9,900,000 18.000000%
REVOLVING LOAN COMMITMENT: $ 8,683,041 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 23,809,708 9.370111%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 4,514,850 7.110000%
SERIES B TERM LOAN COMMITMENT: $ 8,910,000 18.000000%
REVOLVING LOAN COMMITMENT: $ 8,683,041 9.140043%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 22,107,891 8.568950%
</TABLE>
29
<PAGE> 30
CREDITANSTALT-BANKVERIEN
By:
--------------------------
Name:
-------------------
Title:
-------------------
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 8,000,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 14,500,000 15.263158%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 22,500,000 10.00%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 7,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 12,210,526 15.263158%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 23,960,526 9.457237%
</TABLE>
30
<PAGE> 31
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 6,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 12,210,526 12.853185%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 22,520,526 8.728886%
</TABLE>
31
<PAGE> 32
THE DAIWA BANK, LIMITED
By:
--------------------------
Name:
-------------------
Title:
-------------------
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 4,622,222 5.777778%
REVOLVING LOAN COMMITMENT: $ 8,377,778 8.818714%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 13,000,000 5.78%
</TABLE>
32
<PAGE> 33
THE DAIWA BANK, LIMITED - CONTINUED
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 4,246,666 5.777778%
SERIES B TERM LOAN COMMITMENT: $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 7,054,971 8.818714%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 15,701,637 6.193940%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 3,670,300 5.780000%
SERIES B TERM LOAN COMMITMENT: $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 7,054,971 7.426285%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 14,685,271 5.691966%
</TABLE>
33
<PAGE> 34
FIRST UNION NATIONAL
BANK OF GEORGIA
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 5,688,889 7.111111%
REVOLVING LOAN COMMITMENT: $ 10,311,111 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 16,000,000 7.11%
</TABLE>
34
<PAGE> 35
FIRST UNION NATIONAL
BANK OF GEORGIA - CONTINUED
<TABLE>
<S> <C> <C>
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 5,226,667 7.111111%
SERIES B TERM LOAN COMMITMENT: $ 7,700,000 14.000000%
REVOLVING LOAN COMMITMENT: $ 8,683,041 10.853801%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 21,609,708 8.524540%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 4,514,850 7.110000%
SERIES B TERM LOAN COMMITMENT: $ 6,930,000 14.000000%
REVOLVING LOAN COMMITMENT: $ 12,683,041 13.350569%
MULTICURRENCY LOAN COMMITMENT: $ 0 0.000000%
TOTAL COMMITMENT: $ 24,127,891 9.351896%
</TABLE>
35
<PAGE> 36
NATIONSBANK OF NORTH CAROLINA,
N.A.
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 8,000,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 5,710,762 6.011328%
MULTICURRENCY LOAN COMMITMENT: $ 8,789,238 17.578476%
TOTAL COMMITMENT: $ 22,500,000 10.00%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 7,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 4,400,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 4,809,063 6.011328%
MULTICURRENCY LOAN COMMITMENT: $ 7,910,314 17.578476%
TOTAL COMMITMENT: $ 24,469,377 9.656007%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 6,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 3,960,000 8.000000%
REVOLVING LOAN COMMITMENT: $ 4,809,063 5.062172%
MULTICURRENCY LOAN COMMITMENT: $ 7,910,314 15.820628%
TOTAL COMMITMENT: $ 23,029,377 8.926115%
</TABLE>
36
<PAGE> 37
WACHOVIA BANK OF GEORGIA, N.A.
By:
--------------------------
Name:
-------------------
Title:
-------------------
<TABLE>
<CAPTION>
PRIOR TO SECOND CLOSING DATE
PRO RATA
AMOUNT SHARE
------ --------
<S> <C> <C>
TERM LOAN COMMITMENT: $ 8,000,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 5,710,762 6.011328%
MULTICURRENCY LOAN COMMITMENT: $ 8,789,238 17.578476%
TOTAL COMMITMENT: $ 22,500,000 10.00%
ON AND AFTER SECOND CLOSING DATE
SERIES A TERM LOAN COMMITMENT: $ 7,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 5,500,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 4,809,063 6.011328%
MULTICURRENCY LOAN COMMITMENT: $ 7,910,314 17.578476%
TOTAL COMMITMENT: $ 25,569,377 10.085694%
ON AND AFTER SECOND AMENDMENT EFFECTIVE DATE
SERIES A TERM LOAN COMMITMENT: $ 6,350,000 10.000000%
SERIES B TERM LOAN COMMITMENT: $ 4,950,000 10.000000%
REVOLVING LOAN COMMITMENT: $ 4,809,063 5.062172%
MULTICURRENCY LOAN COMMITMENT: $ 7,910,314 15.820628%
TOTAL COMMITMENT: $ 24,019,377 9.309836%
</TABLE>
37
<PAGE> 38
SUPPLEMENT TO SCHEDULE 9.02
EXISTING LIENS
E. PRINCE STREET TECHNOLOGIES, LTD.
1. Liens on accounts receivable pursuant to the Factoring Agreement (Net)
dated January 13, 1988 executed by Prince Street Technologies, Ltd. in
favor of Citizens & Southern Commercial Corporation, as amended on
February 13, 1992
1
<PAGE> 39
CONSENT AND ACKNOWLEDGMENT
Each of the undersigned hereby (i) acknowledges and confirms its
agreement to the foregoing Second Amendment to Second Amended and Restated
Credit Agreement dated as of June __, 1994, including without limitation, the
increases in the Revolving Loan Commitments and Multicurrency Loan Commitments
as provided therein, and (ii) restates and reaffirms its obligations under each
of their respective Guaranty Agreements and all other Credit Documents (as such
terms are defined in the Second Amended and Restated Credit Agreement) to which
it is a party, including without limitation, all such obligations with respect
to the additional Revolving Loans and Multicurrency Loans that may be made
thereunder.
IN WITNESS WHEREOF, each of the undersigned has executed and delivered
this Consent and Acknowledgment effective as of June __, 1994.
INTERFACE, INC.
By:
-------------------------------
Title:
-------------------------
GUILFORD OF MAINE, INC.
By:
-------------------------------
Title:
-------------------------
GUILFORD (DELAWARE) INC.
By:
-------------------------------
Title:
-------------------------
1
<PAGE> 40
INTERFACE FLOORING SYSTEMS, INC.
By:
-------------------------------
Title:
-------------------------
ROCKLAND REACT-RITE, INC.
By:
-------------------------------
Title:
-------------------------
INTERFACE RESEARCH CORPORATION
By:
-------------------------------
Title:
-------------------------
INTERFACE EUROPE, INC.
By:
-------------------------------
Title:
-------------------------
PANDEL, INC.
By:
-------------------------------
Title:
-------------------------
2
<PAGE> 41
INTERFACE ASIA-PACIFIC, INC.
By:
-------------------------------
Title:
-------------------------
BENTLEY MILLS, INC.
By:
-------------------------------
Title:
-------------------------
PRINCE STREET TECHNOLOGIES, LTD.
By:
-------------------------------
Title:
-------------------------
3
<PAGE> 1
EXHIBIT 10.2
EXECUTION COUNTERPART
THIRD AMENDMENT TO REVOLVING CREDIT LOAN AGREEMENT
This Third Amendment to Revolving Credit Loan Agreement dated
as of June 15, 1994 (the "Third Amendment") by and among INTERFACE FLOORING
SYSTEMS, INC., a corporation organized and existing under the laws of the State
of Georgia (the "Borrower"), TRUST COMPANY BANK, Georgia banking corporation
(the "Bank") and for the purposes of consenting to this Third Amendment,
INTERFACE, INC., a Georgia corporation ("Interface").
W I T N E S S E T H:
WHEREAS, the Borrower, the Bank and Interface are parties to
that certain Revolving Credit Loan Agreement dated as of August 5, 1991, as
amended by that certain First Amendment to Revolving Credit Agreement dated as
of June 30, 1992 and as further amended by that certain Second Amendment to
Revolving Credit Agreement dated as of August 5, 1993, pursuant to which the
Bank agreed to make to the Borrower certain revolving credit loans in an
aggregate principal amount at any one time outstanding not to exceed
$4,250,000.00 (as amended, the "Loan Agreement"); and
WHEREAS, the Borrower and Interface have requested and the
Bank has agreed, subject to the terms and conditions hereof, to replace the
Prime Rate borrowing option provided by the Loan Agreement with an overnight
"cost of funds" borrowing option; and
WHEREAS, the Borrower, Interface and the Bank wish to amend
the Loan Agreement to incorporate the new pricing options and to make certain
other modifications as more particularly set forth below;
NOW, THEREFORE, for and in consideration of the sum of Ten
Dollars ($10.00) in hand paid by Borrower and Interface and the Bank and for
further good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Section 1.01 of the Loan Agreement is hereby amended
as follows, with each of the following inserted in the proper alphabetical
order:
(a) The definition of "Borrowing" is hereby
deleted in its entirety and the following substituted in lieu thereof:
`"Borrowing" shall mean a borrowing under the
Commitment, which may be either a Prime Rate Borrowing,
<PAGE> 2
a Cost of Funds Rate Borrowing, a Secondary C/D Rate
Borrowing or a Eurodollar Borrowing.'
(b) The following definitions of "Cost of Funds Rate"
and "Cost of Funds Rate Borrowing" are hereby added immediately
following the definition of "Contractual Obligations":
'"Cost of Funds Rate" shall mean the rate of interest
per annum quoted by the Bank as its overnight cost of funds
rate for a certain overnight period, which rate of interest
may be accepted or rejected by the Borrower as provided in
Sections 2.02 and 2.03 of this Agreement."
"Cost of Funds Rate Borrowing" shall mean any
Borrowing hereunder which bears interest at the Cost of
Funds Rate."'
2. The Loan Agreement is hereby amended by deleting Sections
2.02, 2.03, 2.04 and 2.05 thereof in their entirety and substituting the
following in lieu thereof:
"SECTION 2.02. Interest on Revolving Credit Note. Interest
shall accrue on the unpaid principal amount of each Borrowing under
the Commitment at the following per annum rates, which may be selected
by the Borrower subject to and in accordance with the terms of this
Agreement:
(i) the Cost of Funds Rate quoted by the Bank and
accepted by the Borrower in accordance with Section 2.03 hereof plus
an additional one percent (1.0%) per annum; or
(ii) LIBOR for Interest Periods of 1, 2, 3 or 6 months,
plus an additional three quarters of one percent (.750%) per annum; or
(iii) the Secondary C/D Rate for Interest Periods of 30,
60, 90 or 180 days, plus an additional three quarters of one percent
(.750%) per annum;
provided, however, that the Borrower may not select a rate based on
LIBOR or the Secondary C/D Rate if the Borrower knows as of the date
of such selection that the Interest Period with respect thereto would
extend beyond the Termination Date. At no time shall the number of
Borrowings outstanding under this Agreement with different interest
rates and/or Interest Periods ending on different days exceed five
(5); provided however, that all Cost of Funds Rate Borrowings shall be
treated as one Borrowing and in the event that the outstanding
Borrowings hereunder are converted to Prime Rate Borrowings as
provided in Sections
2
<PAGE> 3
2.04 or 2.09 hereof, all Prime Rate Borrowings shall be treated as one
Borrowing.
While the Revolving Credit Note shall be dated the
date of this Agreement and shall be in an original principal amount
equal to the amount of the Commitment, interest shall be payable only
with respect to the aggregate Borrowings outstanding thereunder and
said Revolving Credit Note shall be enforceable with respect to
Borrower's obligation to pay principal thereon only to the extent of
the unpaid principal amount of Borrowings outstanding thereunder.
SECTION 2.03. Method of Borrowing Under the Commitment. The
Borrower shall give the Bank written or telephonic notice (promptly
confirmed in writing) of any requested Borrowing under the Commitment
(a "Notice of Borrowing") specifying (i) the amount of the Borrowing,
(ii) the date the proposed Borrowing is to be made (which shall be a
Business Day), (iii) whether the Borrowing will be a Secondary C/D
Rate Borrowing or a Eurodollar Borrowing or if the Borrower is
requesting a quote for a Cost of Funds Rate Borrowing, and (iv) in the
case of a Eurodollar Borrowing or a Secondary C/D Rate Borrowing, the
duration of the initial Interest Period applicable thereto. Each
Notice of Borrowing shall be given to the Bank (i) with respect to any
Eurodollar Borrowing, not later than 11:00 A.M. (Atlanta, Georgia
time) on the third Business Day preceding the day of such requested
Eurodollar Borrowing, (ii) with respect to any Secondary C/D Rate
Borrowing, not later than 11:00 A.M. (Atlanta, Georgia time) on the
second Business Day preceding the day of such requested Secondary C/D
Rate Borrowing, and (iii) with respect to any request for Cost of
Funds Rate Borrowing, not later than 11:00 A.M. (Atlanta, Georgia
time) on the day of such requested Borrowing. Upon receipt of a
request for a quotation for a Cost of Funds Rate Borrowing, the Bank
shall promptly quote to the Borrower the applicable Cost of Funds Rate
for the period extending from the date of such request to the next
Business Day and the Borrower shall immediately accept or reject such
request. The Bank shall be entitled to rely on any telephonic Notice
of Borrowing which it believes in good faith to have been given by a
duly authorized officer or employee of the Borrower and any advances
made by the Bank based on such telephonic notice shall, when deposited
by the Bank to the Borrower's account no. 8800787742 at Trust Company
Bank, be Borrowings for all purposes hereunder.
SECTION 2.04. Selection of Successive Interest Rates and
Interest Periods. The Borrower may, on the last day of the Interest
Period relating thereto, convert any Eurodollar Borrowing or Secondary
C/D Rate Borrowing, as the case may be, into a Eurodollar Borrowing, a
Secondary C/D Rate
3
<PAGE> 4
Borrowing or, subject to the procedure set forth above, a Cost of
Funds Rate Borrowing, or continue a Eurodollar Borrowing or Secondary
C/D Rate Borrowing, as the case may be, in the same aggregate
principal amount. The Borrower may at any time convert a Cost of
Funds Rate Borrowing into a Eurodollar Borrowing or a Secondary C/D
Rate Borrowing. The Borrower shall give the Bank telephonic notice
(promptly confirmed in writing) of any such continuation or conversion
(a "Notice of Continuation/Conversion") at least two Business Days
prior to a conversion or continuation of any Borrowing (other than a
continuation of a Cost of Funds Rate Borrowing), such notice to
specify whether the Borrowing is to be continued as or converted to a
Secondary C/D Rate Borrowing or a Eurodollar Borrowing or converted to
a Cost of Funds Rate Borrowing, subject to the acceptance by the
Borrower on the date thereof of the applicable Cost of Funds Rate and,
if applicable, the Interest Period selected by the Borrower for such
Borrowing. If the Bank does not receive timely notice of any
succeeding interest rate and/or Interest Period selected by the
Borrower as provided for herein or if the Borrower selects an interest
rate for an Interest Period which is not available under Section 2.02
or Section 2.10, any outstanding Borrowing for which the Borrower
failed to select an interest rate and/or Interest Period or selected
an interest rate for an Interest Period which is not available under
Section 2.02 or 2.10, shall be converted to a Prime Rate Borrowing and
the Bank shall promptly notify the Borrower by telephone, which notice
shall be promptly confirmed in writing (including telex) to the
Borrower, of such conversion.
SECTION 2.05. Revolving Credit Note Interest Payment Dates.
Interest on the Revolving Credit Note shall be payable (i) on the last
day of the relevant Interest Period for Eurodollar Borrowings and
Secondary C/D Rate Borrowings;provided, however, in any case where the
Interest Period of an Eurodollar Borrowing or a Secondary C/D Rate
Borrowing exceeds 3 months or 90 days, respectively, interest shall be
payable on the last day of each of the three month or 90-day periods,
as the case may be, comprising such Interest Period as well as on the
last day of such Interest Period, (ii) on the last day of each
calendar quarter, in arrears, commencing September 30, 1991 for Prime
Rate Borrowings and Cost of Funds Rate Borrowings, and (iii) on the
Termination Date, whether by acceleration or otherwise.'
3. Section 2.15 of the Loan Agreement is hereby amended
by deleting the words "the interest rate otherwise in effect from time to time
for Prime Rate Borrowings pursuant to Section 2.02" commencing on the eighth
line thereof and substituting in lieu thereof "Prime Rate as in effect from
time to time."
4
<PAGE> 5
4. This Third Amendment shall be effective upon the
receipt of the Bank of a duly executed counterpart of this Third Amendment in
its office in Atlanta, Georgia. Upon such receipt all references to the Loan
Agreement shall mean the Loan Agreement as amended by this Third Amendment.
Except as expressly provided in this Third Amendment, the execution and
delivery of this Third Amendment does not and will not amend, modify or
supplement any provision of, or constitute a consent to or waiver of the
noncompliance with the provisions of the Loan Agreement and, except as
specifically provided in this Third Amendment, the Loan Agreement shall remain
in force and effect.
5. This Third Amendment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
6. This Third Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia without regard to
the conflict of laws principles thereof.
5
<PAGE> 6
IN WITNESS WHEREOF the parties hereto have caused this Third
Amendment to be executed and delivered by their duly authorized officers as of
the day and year first above written.
INTERFACE FLOORING SYSTEMS, INC.
By:
-----------------------------
Title:
------------------------
TRUST COMPANY BANK
By:
-----------------------------
Title:
------------------------
By:
-----------------------------
Title:
------------------------
ACKNOWLEDGED, ACCEPTED AND AGREED
AS OF THE 15th DAY OF JUNE, 1994:
INTERFACE, INC.
By:
-----------------------------
Title:
------------------------
6
<PAGE> 7
THE UNDERSIGNED GUARANTORS HEREBY CONSENT AND AGREE TO THE TERMS OF THE
FOREGOING THIRD AMENDMENT AND HEREBY RATIFY AND CONFIRM THE GUARANTY AGREEMENTS
AS OF THE ___ DAY OF JUNE, 1994:
INTERFACE, INC.
By:
-----------------------------
Title:
------------------------
INTERFACE EUROPE, INC., formerly,
Interface International, Inc.
By:
-----------------------------
Title:
------------------------
ROCKLAND REACT-RITE, INC.
By:
-----------------------------
Title:
------------------------
INTERFACE RESEARCH CORPORATION
By:
-----------------------------
Title:
------------------------
PANDEL, INC.
By:
-----------------------------
Title:
------------------------
7
<PAGE> 1
EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 2th day of
July, 1994, by and between INTERFACE, INC., a corporation organized under the
laws of the State of Georgia, U.S.A. (the "Company"), and DAVID MILTON, a U.S.
citizen currently residing in Hong Kong ("Executive").
For and in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. Subject to the terms and conditions of this
Agreement, Executive shall be employed by the Company as a Senior Vice
President of the Company and President of Interface Asia-Pacific, Inc., and
shall perform such duties and functions for the Company and its subsidiaries
and affiliates as shall be specified from time to time by the Chief Executive
Officer or Board of Directors of the Company; Executive hereby accepts such
employment and agrees to perform such executive duties as may be assigned to
him. Executive also consents to serve, if elected, as a director of the
Company with such additional compensation, if any, which is payable to
directors similarly situated. Executive may be promoted to a higher position
than Senior Vice President of the Company but he may not be demoted or given a
lesser title.
2. Duties. Executive shall devote his full business related time
and best efforts to accomplishing such executive duties as may be requested by
the Chief Executive Officer ("CEO") of the Company acting under authorization
from the Board of Directors of the Company. Unless otherwise mutually agreed
between Executive and the Company, the location of Executive's employment shall
be Hong Kong.
3. Avoidance of Conflict of Interest. While employed by the
Company, Executive shall not engage in any other business without the prior
written consent of the Company. Without limiting the foregoing, Executive
shall not serve as a principal, partner, employee, officer or director of, or
consultant to, any other business or entity conducting business for profit
without the prior written approval of the Company. In addition, under no
circumstances will Executive have any financial interest in any competitor of
the Company; provided, however, that Executive may invest in no more than 2% of
the outstanding stock or securities of any competitor whose stock or securities
are traded on a national stock exchange of any country.
4. Term. The term of Executive's employment under this Agreement
shall commence on the date noted above and shall continue until Executive's
65th birthday (October 19, 2000) unless earlier terminated under Paragraph 5
below.
5. Termination. Executive's employment with the Company may be
terminated as follows:
(a) Executive may voluntarily terminate his employment hereunder at
any time, effective 60 days after delivery to the Company of his signed,
written resignation; provided, however, Executive shall not terminate his
employment hereunder without Company's consent prior to January 1, 1997, unless
Company
<PAGE> 2
has materially breached its obligations hereunder and has failed to cure or
begin diligent efforts to cure such breach within 30 days of receiving from
Executive written notice of such breach and a demand that it be cured.
(b) Subject to the terms of Paragraphs 5(c) and (d) below, the
Company may terminate Executive's employment hereunder, in its sole discretion,
whether with or without just cause, at any time upon written notice to
Executive.
(c) If prior to January 1, 1997, Company terminates Executive's
employment without just cause as defined in Paragraph 5(d) below, Executive
shall be entitled to continue to receive, less all applicable withholdings, all
salary, bonus or incentive compensation, and benefits payable to Executive
under this Agreement and under Executive's Interface, Inc. Offshore Stock
Option Agreement (the "Stock Option Agreement"), and shall be entitled to
continued vesting of all rights under the Stock Option Agreement and any
Pension Plan and any Key Employee Stock Option Plan or other benefit plan or
plans in which Executive is a participant, from the effective date of
termination without cause through January 1, 1997. This payment shall be in
lieu of any and all other payments or compensation of any nature whatsoever to
which Executive might otherwise be entitled from Company, other than
Executive's vested rights under existing Company pension plans, stock option
plans and any other benefit plans in which Executive is a participant. To be
entitled to receive this compensation, Executive shall sign whatever additional
release of claims, confidentiality agreements and other documents Company may
reasonably request of Executive at the time of payment, and for so long as
Executive is entitled to the benefits of such compensation Executive shall
cooperate fully with and devote his best efforts to providing assistance
requested by the Company. The parties agree that one intention of this
provision is to insure that Executive vests fully in the Stock Option
Agreement, and any Pension Plan, Key Employee Stock Option Plan and other
benefit plans if he is terminated other than for "just cause" pursuant to
Paragraph 5(d) below or other than as a result of death or disability.
Executive hereby agrees and acknowledges that if he voluntarily resigns from
his employment, or is terminated for just cause, or, after January 1, 1997 is
terminated without just cause upon 60 days prior written notice from Company
(or with 60 days' pay and benefits in lieu of notice), then he shall be
entitled to no payment or compensation whatsoever from the Company other than
as may be due him through his last day of employment and from Company benefit
plans in which he continues to have a vested interest. If Executive's
employment is terminated due to Executive's death or disability (as defined in
the Company's long-term disability plan or insurance policy), Executive shall
be entitled to no payment or compensation other than as provided by the
Company's short and long-term disability plan or, in the case of death, its
life insurance payment policy in effect for executives of Executive's level;
provided however, Executive or his estate, as the case may be, shall not by
operation of this sentence forfeit any rights in which he is vested at the time
of his death or disability.
(d) The Company, for just cause, may immediately terminate
Executive's employment hereunder at any time upon delivery of written notice to
Executive. For purposes of this Agreement, the phrase "for just cause" shall
mean: (i)Executive's refusal or repeated failure to follow the reasonable
lawful directions
<PAGE> 3
of the Company, (ii) Executive's material fraud, malfeasance, gross negligence,
or willful misconduct with respect to business affairs of the Company, (iii)
Executive's refusal or repeated failure to follow the established reasonable
and lawful policies of the Company applicable to persons occupying the same or
similar position,(iv) Executive's material breach of this Agreement, or (v)
Executive's conviction of a felony or crime involving moral turpitude. A
termination of Executive with cause based on clause (i), (iii), or (iv) of the
preceding sentence shall take effect 30 days after the Executive receives from
Company written notice of intent to terminate and Company's description of the
alleged cause,unless Executive shall, during such 30-day period, remedy the
events or circumstances constituting cause; provided, however, that such
termination shall take effect immediately upon the giving of written notice of
termination with cause under any of such clauses if the Company shall have
determined in good faith that such events or circumstances are not remediable
(which determination shall be stated in such notice).
Upon termination of Executive's employment for any reason whatsoever
(whether voluntary on the part of Executive, for just cause, or other reasons),
the obligations of Executive pursuant to Paragraphs 7 (including Exhibit "A")
and 8 hereof shall survive and remain in effect.
6. Compensation and Benefits. During the term of Executive's
employment with the Company hereunder:
(a) Continuity. Executive shall receive a salary of $200,000 per
year and shall continue to receive his current benefits and such bonus as the
CEO or Board of Directors shall deem appropriate, subject to such increases as
are determined appropriate by the Compensation Committee of the Company or the
CEO;
(b) Other Benefits. Executive shall be entitled to vacation with
pay, life insurance, health insurance and such other employee benefits as he
may be entitled to receive in accordance with the established plans and
policies of the Company, as in effect from time to time; and
(c) Tax Equalization. In the event Executive is relocated from Hong
Kong to another country at the Company's request, the Company and Executive
will cooperate in good faith to agree on such adjustments to Executive's
compensation and benefits package as are appropriate to provide consistent
after tax income to Executive, while also acting in the best interests of the
Company.
(d) Change of Control. If the Company grants to any Company Vice
Presidentor Senior Vice President rights under an agreement activated by a
change in control of the Company, this Agreement shall be amended to
incorporate herein all terms of such an agreement, except to the extent they
conflict with the terms hereof.
7. Confidentiality and Work Product. Executive agrees to execute
and be bound by the terms and conditions of the Employee Agreement Regarding
Confidentiality and Work Product attached hereto as Exhibit "A", which is
- 3 -
<PAGE> 4
acknowledged to have been effective since January 1, 1992, and is hereby made a
part of this Agreement.
8. Restrictions on Post-Employment Activities. Executive covenants
and agrees that in any circumstance in which Executive's employment ceases and
he is entitled to continue receiving benefits hereunder, then for the period he
is entitled to receive such benefits and for a period of 12 months thereafter,
he will not, directly or indirectly, on his own behalf or on behalf of any
other person or entity:
(i) Solicit the patronage or business of any person or entity
located within the geographical area served by the Company's
subsidiary over which Executive exerted control ("Protected
Customers") and which was a customer of the Company during the term of
Executive's employment, or of any of the prospective Protected
Customers of the Company solicited or called upon by the Company
within two years prior to the termination of Executive's employment,
for the purpose of selling or providing (or attempting to sell or
provide) to any such Protected Customer or prospective Protected
Customer any product or service substantially similar to or
competitive with any product or service sold or offered by the Company
during the term of Executive's employment by the Company; or
(ii) Solicit for employment or hire any person who is then
employed by the Company (whether such employment is pursuant to a
written contract with the Company or otherwise), or induce or attempt
to induce any such person to leave the employment of the Company for
any reason.
If Executive's employment is terminated by the Company for just cause,
the term of the covenants contained in this Paragraph 8 shall be for 24 months
after such termination, rather than 12 months.
If Executive has any doubts as to whether a person or entity is a
customer or prospective customer which he is restricted from soliciting as
provided in covenant (i) above, Executive will submit a written request to the
Chief Executive Officer, Chief Financial Officer, or General Counsel of the
Company for clarification and afford the Company at least 10 calendar days
(from the receipt of such request) to respond before taking any action with
respect to such person or entity. Executive agrees that any violation by him
of one or both of covenants (i) and (ii) above shall automatically toll the
post-termination time period relating to such covenant(s) for the amount of
time that the violation continues. Executive further acknowledges and agrees
that the covenants contained herein are reasonable and necessary to protect the
legitimate business interests of the Company.
9. Injunctive Relief. Executive acknowledges that any breach of
the terms of Paragraphs 7 (including Exhibit "A") or 8 hereof would result in
material damage to the Company, although it might be difficult to establish the
monetary value of the damage. Executive therefore agrees that the Company, in
addition to
- 4 -
<PAGE> 5
any other rights and remedies available to it, shall be entitled to obtain an
immediate injunction (whether temporary or permanent) from any court of
appropriate jurisdiction in the event of any such breach thereof by Executive,
or threatened breach which the Company in good faith believes will or is likely
to result in irreparable harm to Company..
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia and
the federal laws of the United States of America, without regard to rules
relating to the conflict of laws. Executive hereby consents to the
jurisdiction of the Superior Court of Fulton County, Georgia and the U.S.
District Court in Atlanta, Georgia and hereby waives any objection he might
otherwise have to jurisdiction and venue in such courts in the event either is
requested to resolve a dispute between the parties.
11. Notices. All notices, consents and other communications
required or authorized to be given by either party to the other under this
Agreement shall be in writing and shall be deemed to have been given or
submitted upon actual receipt if delivered in person or by facsimile
transmission, and upon the earlier of actual receipt or the expiration of 7
days after mailing if sent by registered or certified mail, (express delivery)
postage prepaid to the parties at the following addresses:
To The Company: Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, Georgia 30339
Fax No.: 404/956-9764
Attn: Ray C. Anderson
With A Copy To: Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, Georgia 30339
Fax No.: 404/956-9764
Attn: David W. Porter
To Executive: David Milton
1 Albany Road, Apartment #30-C
Hong Kong
Fax No.: 011/852 810-6474
Either party may change its address (and fax number) for purposes of notices
under this Agreement by providing notice to the other party in the manner set
forth above.
12. Failure to Enforce. The failure of either party hereto at any
time, or for any period of time, to enforce any of the provisions of this
Agreement shall not be construed as a waiver of such provision(s) or of the
right of such party thereafter to enforce each and every such provision.
- 5 -
<PAGE> 6
13. Binding Effect. This Agreement shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns, and Executive
and his heirs and personal representatives. Any business entity or person
succeeding to substantially all of the business of the Company by purchase,
merger, consolidation, sale of asset, or otherwise shall be bound by and shall
adopt and assume this Agreement and the Company shall obtain the assumption of
this Agreement by such successor.
14. Entire Agreement. This Agreement (together with the Exhibits
hereto) supersedes all prior discussions and agreements between the parties and
constitutes the sole and entire agreement between the Company and Executive
with respect to the subject matter hereof. This Agreement shall not be
modified or amended except pursuant to a written document signed by the parties
hereto.
15. Severability. Executive acknowledges and agrees that the
Company's various rights and remedies referenced in this Agreement are
cumulative and nonexclusive of one another, and that Executive's covenants and
agreements contained herein are severable and independent of one another.
Executive agrees that the existence of any claim by him against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to enforcement by the Company of any or all of such covenants or
agreements of Executive hereunder. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, it is the intention of the parties that the remaining provisions
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their respective names as of the date first written above.
INTERFACE, INC.
By: /s/ Ray C. Anderson [SEAL]
-------------------------
Ray C. Anderson
President
Attest: /s/ David W. Porter [SEAL]
--------------------
Secretary
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
- 6 -
<PAGE> 7
WITNESS: EXECUTIVE
/s/ David W. Porter /s/ David Milton
- - ---------------------------- ----------------------
[Signature] David Milton
David W. Porter
- - ----------------------------
[Print Name]
5326 W. Bank Drive
- - ----------------------------
[Print Address]
Marietta, Georgia 30068
- - ----------------------------
- 7 -
<PAGE> 8
EXHIBIT "A"
EMPLOYEE AGREEMENT REGARDING CONFIDENTIALITY
AND WORK PRODUCT
During the course of my employment, the Company has furnished or
disclosed (or may furnish or disclose) to me certain Confidential Information
related to its business. I also may invent, develop, produce, write or
generate Confidential Information and Work Product which might be of great
value to its competitors. I acknowledge that the continuing ability of the
Company to engage successfully in its business and provide goods and services
on a competitive basis depends, in part, upon maintenance of the secrecy of the
Confidential Information and protection of its rights in Work Product.
Therefore, as part of the consideration for the compensation paid or
to be paid me for my services during the course of my employment, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, I covenant and agree with and in favor of the Company as
follows:
1. DEFINITIONS. The following terms, whenever used in this Agreement,
shall have the respective meanings set forth below:
Company -- Interface, Inc. and its direct and indirect subsidiaries
and affiliated companies (including, without limitation, Interface
Flooring Systems, Inc.), individually and collectively. (References
herein to EMPLOYER shall mean the particular company by which I am
employed.)
Confidential Information -- (i) All Trade Secrets (as defined below),
and (ii) any other information that is material to the Company and not
generally available to the public, including, without limitation,
information concerning the Company's methods and plans of operation,
production processes, marketing and sales strategies, research and
development, know-how, computer programming, style and design
technology and plans, non-published product specifications, patent
applications, product and raw material costs, pricing strategies,
business plans, financial data, personnel records, suppliers and
customers (whether or not such information constitutes a Trade
Secret).
Trade Secret -- Information of or about the Company that would be
considered a trade secret under Georgia law; namely, that information
which (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable through proper
means by, other persons who can obtain economic value from its
disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Such
information constituting Trade Secrets may include, but shall not be
limited to, technical or nontechnical data, a formula, pattern,
compilation, program, device, method, technique, drawing or process,
financial data or plans, product plans, or a list of actual or
potential customers or suppliers.
Nondisclosure Period -- (i) With respect to any Trade Secret, the
period of my employment with Employer and for so long afterwards as
the pertinent information or data remains a Trade Secret; and (ii)
with respect to Confidential Information that does not constitute a
Trade Secret, the period of my employment with Employer and for a
period of two years thereafter.
Work Product -- (i) All writings, tapes, recordings, computer programs
and other works in any tangible medium of expression, regardless of
the form of medium, and (ii) all inventions or ideas in the nature of
a new design, machine, process, method of manufacture, composition of
matter or formula, or any new and useful improvements thereof, that
relate to the business conducted by the Company and have been or are
conceived, prepared or developed by me (in whole or in part, alone or
in conjunction with others) during the term of my employment with
Employer.
2. CONFIDENTIALITY. During the applicable Nondisclosure Period, I will
neither use (except as necessary to perform my obligations to Employer) nor
disclose to any other person or entity (except employees of the Company
authorized to receive such information) any Confidential Information without
the prior written consent of an executive officer of Employer to do so. The
foregoing obligations shall apply with regard to all Confidential Information
known to me, including such Confidential Information first disclosed to (or
known by) me prior to the date of this Agreement. The limited duration of the
Nondisclosure Period shall not operate
A-1
<PAGE> 9
or be construed as affording me any right or license to use any Confidential
Information (or Work Product) at the end of such Nondisclosure Period, or as a
waiver by the Company of the rights and benefits available to it under laws
governing the protection and enforceability of patents, copyrights and other
intellectual property.
3. EXCEPTIONS. The foregoing confidentiality obligations shall not apply
to: (i) any information that, through no fault of mine, shall have become
disclosed in the public domain through publications of general circulation,
(ii) any information received by me in good faith from a third party who has
the legitimate possession of and unrestricted right to disclose such
information, and (iii) any information that I can demonstrate through prior
written records to have been within my legitimate possession prior to the time
of my first employment with Employer. If I am unsure as to whether any
particular information or data constitutes Confidential Information, or as to
the applicable Nondisclosure Period, I will submit a written request to an
executive officer of Employer for clarification and afford Employer at least 20
days (from the date of receipt of such request) to respond before disclosing or
personally using such information or data.
4. RIGHTS TO WORK PRODUCT. The Work Product, and all patents, copyrights
and other rights, titles and interests whatsoever in and to the Work Product,
shall be owned solely, irrevocably and exclusively throughout the world by
Employer as works made for hire. If and to the extent any court or agency
should conclude that the Work Product (or any portion thereof) does not
constitute or qualify as "work made for hire", I hereby (without further
consideration) assign, grant and deliver unto Employer (or its designee),
solely, irrevocably and exclusively throughout the world, all rights, titles
and interests whatsoever (whether presently in existence or arising in the
future) in and to the Work Product. I will execute and deliver such additional
grants, assignments, transfer instruments and other documents as Employer from
time to time (whether during or subsequent to my employment) reasonably may
request for the purpose of evidencing, perfecting, enforcing, registering or
defending its complete, exclusive, perpetual and worldwide ownership of all
such rights, titles and interest in and to the Work Product, or to effect the
transfer of any such rights, titles and interests to designees of Employer. I
hereby irrevocably constitute and appoint Employer as my agent and
attorney-in-fact (with full power of substitution) to execute and deliver, in
my name, place and stead, any and all such assignments or other instruments
(including, without limitation, applications for U.S. and foreign patents)
which I shall fail or refuse promptly to execute and deliver, this power and
agency being coupled with an interest and being irrevocable. Without limiting
the preceding provisions of this paragraph, I acknowledge and agree that the
Company may edit, modify, use, publish and exploit the Work Product (and any
portion thereof) in all media and in such manner as the Company in its
discretion may determine.
5. RETURN OF INFORMATION. Upon request by an executive officer of
Employer at any time, and in any event upon termination of my employment for
any reason, I will deliver to an executive officer of Employer all written
materials and records and all other tangible items (such as tools and devices)
in my possession or under my control that constitute or embody Confidential
Information or Work Product, or that otherwise are the property of the Company
or relate to the affairs of the Company, and will keep no copies or duplicates
thereof except as may be expressly authorized in writing at that time by an
executive officer of Employer.
6. INJUNCTIVE RELIEF. I acknowledge that any breach of the terms of this
Agreement would result in material damage to the Company, although it might be
difficult to establish the monetary value of the damage. I therefore agree
that the Company, in addition to any other rights and remedies available to it,
shall be entitled to injunctive relief by a court of appropriate jurisdiction
in the event of my breach or threatened breach of any term of this Agreement.
7. GENERAL MATTERS. (a) All rights and restrictions contained herein may
be exercised and shall be applicable and binding only to the extent that they
do not violate applicable law. If any term of this Agreement shall be held to
be illegal, invalid or unenforceable by a court of competent jurisdiction, the
remaining terms hereof shall remain in full force and effect. (b) This
Agreement does not create in me any rights of continued employment, and
whatever rights Employer may have to terminate my employment are not affected
hereby. (c) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia (USA). (d) The covenants and
agreements set forth herein shall inure to the benefit of the Company and its
successors and assigns, and shall be binding upon me and my heirs, personal
representatives and assigns.
I have executed this Agreement on the 1st day of January, 1992.
READ, UNDERSTOOD AND AGREED:
/s/ David W. Porter /s/ David Milton
- - ---------------------- ------------------------
Witness David Milton
A-2
<PAGE> 1
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 7th day of
March, 1994, by and between GUILFORD OF MAINE, INC., a corporation organized
under the laws of the State of Delaware, U.S.A. (the "Company"), and BRIAN L.
DEMOURA, currently a resident of Orangeburg, South Carolina ("Employee").
WHEREAS, the Company desires to employ Employee in the capacity of
President; and
WHEREAS, Employee desires to be employed by the Company under the terms
set forth below.
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee as of March 7,
1994 (the "Effective Date"), and Employee hereby accepts such employment, upon
the terms and subject to the conditions hereinafter set forth.
2. Duties. Employee shall be the President of the Company. After
May 31, 1994, Employee shall devote his full time and best efforts to
accomplishing such tasks as may be requested by the Board of Directors of the
Company and shall perform such tasks in a manner satisfactory to the Company.
Prior to that date, Employee shall devote so much of his time as is possible to
such tasks, it being acknowledged that Employee is spending part of his time in
the employment of Fashion Fabrics of America through May 31, 1994, unless
Employee is sooner released therefrom.
3. Avoidance of Conflict of Interest. While employed by the
Company, and except as noted in Paragraph 2 above, Employee shall not engage in
any other business without the prior written consent of the Company. Without
limiting the foregoing, Employee shall not serve as a principal, partner,
employee, officer or director of, or consultant to, any other business or
entity conducting business for profit without the prior written approval of the
Company. In addition, under no circumstances will Employee have any financial
interest in any competitor of the Company; provided, however, that Employee may
invest in no more than 2% of the outstanding stock or securities of any
competitor whose stock or securities are traded on a national stock exchange of
any country.
4. Term. The term of Employee's employment under this Agreement
shall commence on the Effective Date and shall continue until terminated under
Section 5 below.
<PAGE> 2
5. Termination. Employee's employment with the Company may be
terminated as follows:
(a) Employee may voluntarily terminate his employment hereunder at
any time, effective 60 days after delivery to the Company of his signed,
written resignation.
(b) Subject to the terms of Paragraphs 5(c) and (d) below, the
Company may terminate Employee's employment hereunder, in its sole discretion,
whether with or without just cause, at any time upon written notice to
Employee, it being clearly understood and agreed that Employee's employment
hereunder is "at will".
(c) If Company terminates Employee's employment without just cause
as defined in Paragraph 5(d) below, Employee shall be entitled to receive
employment termination compensation in an amount equal to the total of
Employee's most recent annual gross income as reflected on the most recent
Internal Revenue Service Form W-2 statement of annual income issued to Employee
by Company. This sum shall be paid in equal monthly installments, less
withholding for federal and state taxes, F.I.C.A., and any other applicable
withholdings, for 12 months after the effective date of Employee's termination.
This payment shall be in lieu of any and all other payments or compensation of
any nature whatsoever to which Employee might otherwise be entitled from
Company, other than Employee's vested rights under existing Company pension
plans and stock option plans or written contracts. To be entitled to receive
this compensation, Employee shall sign whatever additional release of claim and
confidentiality agreements Company may reasonably request of Employee at the
time of payment. Employee hereby agrees and acknowledges that if he
voluntarily resigns from his employment or if terminated for just cause, he
shall be entitled to no payment or compensation whatsoever from the Company
other than as may be due him through his last day of employment and from
Company pension, option, or other benefit plans to the extent he has a vested
interest in them.
(d) The Company, for just cause, may immediately terminate
Employee's employment hereunder at any time upon delivery of written notice to
Employee. For purposes of this Agreement, the term "for just cause" shall
mean: (i) Employee's conviction of, or admission of guilt with respect to, any
crime, or any misdemeanor involving moral turpitude; (ii) Employee's dishonesty
or fraud with respect to the business affairs of the Company, or outside of the
business affairs of the Company if such conduct might reasonably be expected
(as determined by the Company's Board of Directors) to impair his credibility,
or the Company's, with the general public or the employees, customers or
suppliers of the Company; (iii) Employee's failure or refusal to perform (after
reasonable notice, warning and an opportunity for corrective action) the duties
assigned to him pursuant to this Agreement; or (iv) Employee's breach of any
covenant or obligation required of him under this Agreement (including, without
limitation, the Exhibits attached hereto).
-2-
<PAGE> 3
Upon termination of Employee's employment (whether voluntary on the
part of Employee or the Company, or for just cause), the obligations of
Employee pursuant to Sections 7 (including Exhibit "A") and 8 hereof shall
survive and remain in effect.
6. Compensation and Benefits. During the term of Employee's
employment with the Company hereunder after May 31, 1994, Employee shall
receive the following compensation and benefits:
(a) Salary. The Company shall pay Employee an initial base salary
at the rate of $175,000 per year, payable in equal monthly installments.
(b) Bonus. Employee shall be eligible to receive an annual bonus in
accordance with the Company's bonus program, as in effect from time to time.
Employee's bonus potential will be 75% of base salary. Employee acknowledges
and agrees that the determination to pay any bonus (and the amount of any bonus
paid) is entirely within the discretion of the Company and is not guaranteed.
(c) Car Allowance. Company shall provide Employee a leased
automobile. The automobile shall not have a list price in excess of $32,000,
which amount may be modified by the Company from time to time. The automobile
shall be of a make and model commensurate with the automobiles provided to
other employees of the Company. Employee is responsible for maintaining any
and all records and information required by the Internal Revenue Service to
demonstrate the business and personal use of any automobile provided to
Employee by the Company.
(d) Housing Expenses. The Company shall pay Employee's brokerage
fee (up to 6% of the net sale price thereof) incurred on the sale of his
current residence (the "Residence") and Employee's normal closing costs
incurred on the purchase of his new residence in Maine. In the event Employee
has not sold the Residence within six (6) months from the Effective Date
("Purchase Date"), Company agrees to purchase the Residence for a purchase
price equal to the value determined by a certified appraisal of the Residence,
such appraiser being selected and paid by Company. In the event either party
objects to the value determined by such appraiser, the purchase price shall be
the average of such certified appraisal and a second certified appraisal to be
selected and paid by the objecting party. Company, at its option, may either
proceed to the closing of the purchase of the Residence or pay Employee the
equity value (defined as the difference between the purchase price and any
existing mortgage(s) on the Residence) and maintain legal title to the
Residence in Employee's name until Company locates a third party purchaser. If
Company elects to maintain title with Employee, Company shall be responsible
for the payment of the principle and interest due on any mortgage(s) on the
Residence as well as any utilities, real estate taxes or other expenses accrued
and payable after the Purchase Date. Company shall have absolute discretion
and control of the sale of the Residence after the Purchase Date and shall
absorb any loss or receive any benefit realized between the purchase price
determined above and the actual sale price to a third party. Employee shall
cooperate with Company in performing such acts and providing
- 3 -
<PAGE> 4
such documents and information as may be necessary to facilitate the sale of
the Residence. Employee shall also be entitled to all other standard Company
relocation expense reimbursements not covered by the foregoing provisions.
(e) Expenses. The Company shall reimburse Employee for, or assume
directly, all reasonable business expenses incurred by Employee in the
performance of his duties under this Agreement, provided that Employee accounts
for such expenses in accordance with Company policy and such expenses are
ordinary and necessary business expenses of the Company.
(f) Stock Options. The Company shall promptly issue to Employee
stock options for 40,000 shares of Interface, Inc. stock under the Key Employee
Stock Option Plan (1993). Such stock options shall be governed by the terms of
the Key Employee Stock Option Plan (1993).
(g) Other Benefits. Employee shall be entitled to vacation with
pay, life insurance, health insurance and such other employee benefits as he
may be entitled to receive in accordance with the established plans and
policies of the Company, as in effect from time to time.
(h) Pro-Rated Benefits. Prior to May 31, 1994, the benefits set
forth in Paragraphs 6(a), (b), (e) and (g) shall be pro-rated or allocated, as
the case may be, on a basis proportionate with the days per week Employee works
for the Company versus the days he works for Fashion Fabrics of America.
7. Confidentiality and Work Product. Employee agrees to execute
and be bound by the terms and conditions of the Employee Agreement Regarding
Confidentiality and Work Product attached hereto as Exhibit "A", which is
hereby made a part of this Agreement.
8. Restrictions on Post-Employment Activities. Employee covenants
and agrees that, for a period of 18 months immediately following his
resignation or termination of his employment with the Company for just cause,
he will not, directly or indirectly, on his own behalf or on behalf of any
other person or entity:
(i) Solicit the patronage or business of any person or entity
which was a customer of the Company during the term of Employee's
employment, or of any of the prospective customers of the Company
solicited or called upon by the Company within two years prior to the
termination of Employee's employment, for the purpose of selling or
providing (or attempting to sell or provide) to any such customer or
prospective customer any product or service substantially similar to
or competitive with any product or service sold or offered by the
Company during the term of Employee's employment by the Company; or
(ii) Solicit for employment or hire any person who is then
employed by the Company (whether such employment is pursuant to
- 4 -
<PAGE> 5
a written contract with the Company or otherwise), or induce or
attempt to induce any such person to leave the employment of the
Company for any reason.
If Employee's employment is terminated by the Company without just
cause, the term of the covenants contained in this Paragraph 8 shall be for 12
months, rather than 18 months.
If Employee has any doubts as to whether a person or entity is a
customer or prospective customer which he is restricted from soliciting as
provided in covenant (i) above, Employee will submit a written request to an
officer of the Company for clarification and afford the Company at least 10
days (from the receipt of such request) to respond before taking any action
with respect to such person or entity. Employee agrees that any violation by
him of one or both of covenants (i) and (ii) above shall automatically toll the
24-month post-termination time period relating to such covenant(s) for the
amount of time that the violation continues. Employee further acknowledges and
agrees that the covenants contained herein are reasonable and necessary to
protect the legitimate business interests of the Company.
9. Injunctive Relief. Employee acknowledges that any breach of the
terms of Sections 7 (including Exhibit "A") and 8 would result in material
damage to the Company, although it might be difficult to establish the monetary
value of the damage. Employee therefore agrees that the Company, in addition
to any other rights and remedies available to it, shall be entitled to obtain
an immediate injunction (whether temporary or permanent) from any court of
appropriate jurisdiction in the event of any such breach or threatened breach
by Employee.
10. Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Georgia and
the federal laws of the United States of America, without regard to rules
relating to the conflict of laws.
11. Notices. All notices, consents and other communications
required or authorized to be given by either party to the other under this
Agreement shall be in writing and shall be deemed to have been given or
submitted upon actual receipt if delivered in person or by telecopy or telex,
and upon the earlier of actual receipt or the expiration of 3 days after
mailing if sent by registered or certified mail, postage prepaid to the parties
at the following addresses:
TO THE COMPANY: Guilford of Maine, Inc.
P.O. Box 179
Oak Street
Guilford, ME 04443
Fax No.: 207/876-4352
Attn: Benjamin E. Dever,
Vice President, Finance and Administration
- 5 -
<PAGE> 6
WITH A COPY TO: Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, Georgia 30339
Fax No.: 404/956-9764
Attn: David W. Porter, Vice President
and General Counsel
TO EMPLOYEE: Brian L. DeMoura
1332 Lee Boulevard
Orangeburg, South Carolina 29115
Either party may change its address (and fax number) for purposes of notices
under this Agreement by providing notice to the other party in the manner set
forth above.
12. Failure to Enforce. The failure of either party hereto at any
time, or for any period of time, to enforce any of the provisions of this
Agreement shall not be construed as a waiver of such provision(s) or of the
right of such party thereafter to enforce each and every such provision.
13. Binding Effect. This Agreement shall inure to the benefit of,
and be binding upon, the Company and its successors and assigns, and Employee
and his heirs and personal representatives.
14. Entire Agreement. This Agreement (together with the Exhibits
hereto) supersedes all prior discussions and agreements between the parties and
constitutes the sole and entire agreement between the Company and Employee with
respect to the subject matter hereof. This Agreement shall not be modified or
amended except pursuant to a written document signed by the parties hereto.
15. Severability. Employee acknowledges and agrees that the
Company's various rights and remedies referenced in this Agreement are
cumulative and nonexclusive of one another, and that Employee's covenants and
agreements contained herein are severable and independent of one another.
Employee agrees that the existence of any claim by him against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to enforcement by the Company of any or all of such covenants or
agreements of Employee hereunder. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, it is the intention of the parties that the remaining provisions
shall constitute their agreement with respect to the subject matter hereof, and
all such remaining provisions shall remain in full force and effect.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
- 6 -
<PAGE> 7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in their respective names as of the date first written above.
GUILFORD OF MAINE, INC.
By: /s/ David W. Porter [SEAL]
-------------------------
David W. Porter
Vice President
EMPLOYEE
/s/ Brian L. DeMoura [SEAL]
-----------------------------
Brian L. DeMoura
- 7 -
<PAGE> 8
EXHIBIT "A"
EMPLOYEE AGREEMENT REGARDING CONFIDENTIALITY
AND WORK PRODUCT
During the course of my employment, the Company has furnished or
disclosed (or may furnish or disclose) to me certain Confidential Information
related to its business. I also may invent, develop, produce, write or
generate Confidential Information and Work Product which might be of great
value to its competitors. I acknowledge that the continuing ability of the
Company to engage successfully in its business and provide goods and services
on a competitive basis depends, in part, upon maintenance of the secrecy of the
Confidential Information and protection of its rights in Work Product.
Therefore, as part of the consideration for the compensation paid or
to be paid me for my services during the course of my employment, and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, I covenant and agree with and in favor of the Company as
follows:
1. DEFINITIONS. The following terms, whenever used in this Agreement,
shall have the respective meanings set forth below:
Company -- Interface, Inc. and its direct and indirect subsidiaries
and affiliated companies (including, without limitation, Interface
Flooring Systems, Inc.), individually and collectively. (References
herein to EMPLOYER shall mean the particular company by which I am
employed.)
Confidential Information -- (i) All Trade Secrets (as defined below),
and (ii) any other information that is material to the Company and not
generally available to the public, including, without limitation,
information concerning the Company's methods and plans of operation,
production processes, marketing and sales strategies, research and
development, know-how, computer programming, style and design
technology and plans, non-published product specifications, patent
applications, product and raw material costs, pricing strategies,
business plans, financial data, personnel records, suppliers and
customers (whether or not such information constitutes a Trade
Secret).
Trade Secret --Information of or about the Company that would be
considered a trade secret under Georgia law; namely, that information
which (i) derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable through proper
means by, other persons who can obtain economic value from its
disclosure or use, and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Such
information constituting Trade Secrets may include, but shall not be
limited to, technical or nontechnical data, a formula, pattern,
compilation, program, device, method, technique, drawing or process,
financial data or plans, product plans, or a list of actual or
potential customers or suppliers.
Nondisclosure Period -- (i) With respect to any Trade Secret, the
period of my employment with Employer and for so long afterwards as
the pertinent information or data remains a Trade Secret; and (ii)
with respect to Confidential Information that does not constitute a
Trade Secret, the period of my employment with Employer and for a
period of two years thereafter.
Work Product -- (i) All writings, tapes, recordings, computer programs
and other works in any tangible medium of expression, regardless of
the form of medium, and (ii) all inventions or ideas in the nature of
a new design, machine, process, method of manufacture, composition of
matter or formula, or any new and useful improvements thereof, that
relate to the business conducted by the Company and have been or are
conceived, prepared or developed by me (in whole or in part, alone or
in conjunction with others) during the term of my employment with
Employer.
2. CONFIDENTIALITY. During the applicable Nondisclosure Period, I will
neither use (except as necessary to perform my obligations to Employer) nor
disclose to any other person or entity (except employees of the Company
authorized to receive such information) any Confidential Information without
the prior written consent of an executive officer of Employer to do so. The
foregoing obligations shall apply with regard to all
A-1
<PAGE> 9
Confidential Information known to me, including such Confidential Information
first disclosed to (or known by) me prior to the date of this Agreement. The
limited duration of the Nondisclosure Period shall not operate or be construed
as affording me any right or license to use any Confidential Information (or
Work Product) at the end of such Nondisclosure Period, or as a waiver by the
Company of the rights and benefits available to it under laws governing the
protection and enforceability of patents, copyrights and other intellectual
property.
3. EXCEPTIONS. The foregoing confidentiality obligations shall not apply
to: (i) any information that, through no fault of mine, shall have become
disclosed in the public domain through publications of general circulation,
(ii) any information received by me in good faith from a third party who has
the legitimate possession of and unrestricted right to disclose such
information, and (iii) any information that I can demonstrate through prior
written records to have been within my legitimate possession prior to the time
of my first employment with Employer. If I am unsure as to whether any
particular information or data constitutes Confidential Information, or as to
the applicable Nondisclosure Period, I will submit a written request to an
executive officer of Employer for clarification and afford Employer at least 20
days (from the date of receipt of such request) to respond before disclosing or
personally using such information or data.
4. RIGHTS TO WORK PRODUCT. The Work Product, and all patents, copyrights
and other rights, titles and interests whatsoever in and to the Work Product,
shall be owned solely, irrevocably and exclusively throughout the world by
Employer as works made for hire. If and to the extent any court or agency
should conclude that the Work Product (or any portion thereof) does not
constitute or qualify as "work made for hire", I hereby (without further
consideration) assign, grant and deliver unto Employer (or its designee),
solely, irrevocably and exclusively throughout the world, all rights, titles
and interests whatsoever (whether presently in existence or arising in the
future) in and to the Work Product. I will execute and deliver such additional
grants, assignments, transfer instruments and other documents as Employer from
time to time (whether during or subsequent to my employment) reasonably may
request for the purpose of evidencing, perfecting, enforcing, registering or
defending its complete, exclusive, perpetual and worldwide ownership of all
such rights, titles and interest in and to the Work Product, or to effect the
transfer of any such rights, titles and interests to designees of Employer. I
hereby irrevocably constitute and appoint Employer as my agent and
attorney-in-fact (with full power of substitution) to execute and deliver, in
my name, place and stead, any and all such assignments or other instruments
(including, without limitation, applications for U.S. and foreign patents)
which I shall fail or refuse promptly to execute and deliver, this power and
agency being coupled with an interest and being irrevocable. Without limiting
the preceding provisions of this paragraph, I acknowledge and agree that the
Company may edit, modify, use, publish and exploit the Work Product (and any
portion thereof) in all media and in such manner as the Company in its
discretion may determine.
5. RETURN OF INFORMATION. Upon request by an executive officer of
Employer at any time, and in any event upon termination of my employment for
any reason, I will deliver to an executive officer of Employer all written
materials and records and all other tangible items (such as tools and devices)
in my possession or under my control that constitute or embody Confidential
Information or Work Product, or that otherwise are the property of the Company
or relate to the affairs of the Company, and will keep no copies or duplicates
thereof except as may be expressly authorized in writing at that time by an
executive officer of Employer.
6. INJUNCTIVE RELIEF. I acknowledge that any breach of the terms of this
Agreement would result in material damage to the Company, although it might be
difficult to establish the monetary value of the damage. I therefore agree
that the Company, in addition to any other rights and remedies available to it,
shall be entitled to injunctive relief by a court of appropriate jurisdiction
in the event of my breach or threatened breach of any term of this Agreement.
7. GENERAL MATTERS. (a) All rights and restrictions contained herein may
be exercised and shall be applicable and binding only to the extent that they
do not violate applicable law. If any term of this Agreement shall be held to
be illegal, invalid or unenforceable by a court of competent jurisdiction, the
remaining terms hereof shall remain in full force and effect. (b) This
Agreement does not create in me any rights of continued employment, and
whatever rights Employer may have to terminate my employment are not affected
hereby. (c) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Georgia (USA). (d) The covenants and
agreements set forth herein shall inure to the benefit of the Company and its
successors and assigns, and shall be binding upon me and my heirs, personal
representatives and assigns.
I have executed this Agreement on the 7th day of March, 1994.
READ, UNDERSTOOD AND AGREED:
/s/ Brian L. DeMoura
-------------------------
Brian L. DeMoura
A-2
